Here are top five ways that will help you determine the success of your loyalty program!
Do all Loyalty Programs Provide Benefits?
According to a survey done by Bond Brand Loyalty, customers belong to 13.7 loyalty programs on an average, but are actively participating in only 6.7 programs.
Starting your loyalty program is an excellent step towards growth. However, with the intense competition, knowing whether your program is yielding results is what will help you take the required action to increase repeat customers and grow your business.
Like marketing campaigns, measuring the success of your loyalty program is also crucial. If you are stuck with understanding these metrics, read further to gain more insights into the same.
Is your Loyalty Program Working?
Now that you are running a loyalty program, it is time to think through all the metrics and ways to determine if it is a success.
1. Participation Rate
Participation rate is one of the important loyalty analytics you need to understand.
‘’Are people joining the program? Have enough customers joined your loyalty program?’’ Ask yourself these two questions to determine if the participation rate for your loyalty program is good.
Participation Rate is basically the total number of people who have joined the program out of the total customers you have.
Here’s why participation rate is important for your loyalty program!
- It tells you how easy your program is for the customers to join
- Tells you whether your rewards are relevant with your customers or not
- It helps you understand how many people actually know and love the loyalty program
Do you want your rewards program amongst the list of good loyalty programs? But your participation rate is not good enough to stand out in the crowd! Don’t worry, because we have got you covered. Here are some best ways in which you can boost the participation rate for your loyalty program:
- Inform people about your loyalty program . Remember, successful loyalty marketing programs are the ones that are popular amongst the audience.
- Make the rewards very easy to understand and keep improving the reward stages
- Make sure to add rewards that the users love and resonate with. With Reelo, a rewards program platform, you can not only easily design your own loyalty program, but even add personalised rewards that are relevant to your customers.
2. Redemption Rate
The second most powerful loyalty analytics to determine the success of your loyalty program is redemption rate. Ask yourself this question - Are customers redeeming the rewards at your store?
Redemption Rate is the number of points redeemed in the loyalty program as against the total points issued in the program. It helps in knowing about the number of people actively engaged in your loyalty program.
If people are redeeming these rewards, it clearly means that the customers are loyal to your business. It signifies that your repeat customer base is increasing and so is your retention rate.
For a business focused on creating experiences and maximizing loyal customers through these programs, this could be a good sign. If your redemption rate is high, then customers are finding value in the program. However, if the rate is low, chances are people don’t find it valuable and are moving away from the business.
3. Unattainable Rewards
Unattainable rewards are one of the main reasons for the lowered success of customer loyalty programs. Well, it’s quite simple. If customers are unable to redeem the rewards, then they will churn.
Customers think a lot before spending money to get a small discount on their next purchase. If they have to spend, say, Rs.2000 before they get a Rs.50 off on their bill, they may not enjoy it. It is also possible that they may not want to engage with the rewards program. The reason behind this is quite obvious. Such customer loyalty programs don’t provide any value to their customers. Furthermore, the irrelevant and unexciting rewards will only lead to loss in customer loyalty and hamper brand reputation.
So, how do you overcome this hurdle without hurting your bottom line? Try to make your first reward stage easy and attainable. It should be so exciting that the user will be encouraged to redeem it on his next visit. When they are able to redeem their rewards immediately, they start seeing value in the customer loyalty programs.
It will also increase the excitement towards a higher reward stage.
4. Lowered ROI
Without calculating ROI, you will not be able to analyze the effectiveness of your marketing campaigns and overall business. It is one of the important loyalty analytics you cannot afford to miss out on. For example, if your loyalty program is hurting the bottom line, you might want to analyze the same immediately. Or if your loyalty program is not increasing the revenue or adding any value to your business, it simply means that it is not performing well.
For example, imagine you are a restaurant owner who started their restaurant loyalty program. Your loyalty program has a variety of rewards for their customers; however, the restaurant customer loyalty is continuously witnessing the downfall. Wondering why? It’s because your customers are not finding your rewards exciting as compared to other restaurants. You will only be able to improve your rewards program by analyzing your business ROI!
5. Customer-Loyalty Fit
Ask yourself - Is your loyalty program aligned to your customers and their needs? Did you check what your customer prefers buying at the store, and how they interact with the products, before adding the rewards?
More often than not the customers don’t find value with the program as it doesn’t resonate with them. The rewards are not aligned to their interests. If you observe that a particular product is low selling, you cannot add it to your loyalty program. It will reduce the customer engagement and retention for your business.
Similarly, if a group of customers that are participating in the program don’t like the rewards, they will stop engaging. It is important to check the customer loyalty program fit. If this is a success, chances are your loyalty program is getting you good repeat business and improving customer loyalty.
Your rewards program is an important strategy to grow your business. It is important that you reflect on your loyalty program time and again, and evaluate its success. If you find things are not working, try and modify them.
The customers should know of the loyalty program, and should be well aware of how it works. An increase in redemption rate, and ROI will determine success for your loyalty program. Don’t hold yourself back, especially if you run a restaurant or retail business. It’s time to turn all your customers into retaining ones with a successful loyalty program. Sign up at Reelo today and start designing your own loyalty program. We bet increased customer engagement and retention is on your way.