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How to Evaluate and Measure the Effectiveness of Your Loyalty Program

A well-done loyalty program can boost repeat business and help customer satisfaction, therefore it's important to regularly measure and evaluate your program to ensure you are getting the desired results.

1) Understand Your Audience

When building or reviewing your customer loyalty program, you need to fully understand what your audience's needs, habits and favourite products and services are.

2)Automated Reporting

Once your program is set up, use regular reports and analytics in order to understand the effects your efforts are having. You will be able to better understand the revenue generated, where it comes from and why.

3) Customer Effort Score

The Customer Effort Score (CES) measures your businesses' customer service based on actual experiences customers have had with your company. CES asks customers how much effort was required in order to resolve their issue, with one single question. The idea is that service organisations create loyal customers by reducing customer effort.

Web analytics

4) Net Promoter Score

The Net Promoter Score is a promoter score between 1 and 10 that allows you to understand how well your organisation is performing, from your customer's perspective.

A score of 1 – 6 is given by Detractors, who are unhappy customers who intend to leave.

A score of 6 – 8 is given by Passives, who are unenthusiastic and open to competitor offers.

A score of 8 – 10 is given by Promoters, who are enthusiasts, and loyal to your organisation.

The overall score is found by subtracting the percentage of detractors from the percentage of promoters. Measure it before, during and after implementing your loyalty scheme to understand the impact it has on customer satisfaction levels.

5) Customer Retention Rate

Measure how long customers stay with you with this equation.

Retention rate = ((E-N/S)x100

S - The number of customers at the start of the program

N - The number of customers acquired during the program

E - The number of customers at the end of the program

You can use this formula to work out retention over any period of time


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