Ruler - Measure

Marketers know that an effective loyalty program can earn and keep customers while boosting profits, but they often don’t know how they stack up. Many years advising top name clients in loyalty marketing have shown us what works, what doesn’t and how to check how you’re doing. With a smart loyalty self-assessment, businesses can evaluate their loyalty program’s health, see where they stand, and discover how to boost results.

The first goal is to ask yourself the right questions to discover where you stand and get ready to decide on next steps. Are you in the 1. Challenged, 2. Middle of the Pack or 3. Best in Class key categories in the loyalty marketing continuum?

  1. Your program is still young, and customers are still getting acquainted with it.
  1. Your program has now reached a level of maturity, and most of the operational kinks have been worked out.
  1. Your program has now reached maturity, and your biggest challenge is keeping it fresh

Let’s say that your self-assessment places you in category #1—your program is still young and customers are getting acquainted with it. What put you there and what’s next?

Get Ready to Gear up

You should expect to see big changes over the next 24 months as more members join and a greater percentage of your transactions are represented by loyalty members. You may still be faced with a few kinks in operationalizing your program and that’s par for the course.

Total Store Transactions that are Loyalty Transactions

So your loyalty transactions are 0% – 25% of your total store transactions — that’s a decent start, especially if you are still within the first year of the program. However, if your program is closer to two years old, you may need to reevaluate the program value proposition and benefits to ensure they are relevant and enticing to your customers.

The Top 25%

Many retailers report that the top 25% of their customers represent around 70% of total sales — that’s a lot of revenue tied to a comparatively small group of customers. Smart move having a strategy in place to recognize them.

Reach Out Harder & Smarter

You may want to consider what additional customer-facing communications — such as FSIs, promotional emails and social media — you can use to incorporate at least a simple description of the program. The point is that you always want to reinforce to customers that if they do X (e.g., spend $200) they will get Y (earn a $10 reward and receive invitations to members-only sales events). Whenever feasible, include customers’ account status (e.g., you have 195 points, you are only 5 points away from earning your next reward!).

You cannot over-communicate your value proposition and your members’ individual status.

Be Ready to Change Gears

Let’s say that 0% – 10% of your members earn the program’s primary reward within a 12-month period. If your program is brand new this may not be a concern. However, if your program is closer to two years old, members may consider it too restrictive and, as a result, many may have disengaged out of frustration.

Whether it’s time to anticipate negative ROI, recognize best customers, adjust customer communications, or reevaluate program value propositions for customer impact, an honest self-assessment can make the difference between success and failure in the fluid, dynamic world of loyalty marketing.

Is your loyalty program best in class or merely so-so? How does it stack up to other retail loyalty programs? Discover strategies and steps to build loyalty specifically for your business and boost the bottom line, Take the CCG Loyalty Marketing Self-Assessment Here.