Metrics Matter: Measuring the Impact of Your Customer Loyalty Strategies
You might have all the tools in the handbook and delight your customers along their journey, but don’t let your efforts be in vain by not measuring your most important metrics.
Think of it like steering a ship: without a compass and a map, you're sailing blind. Metrics are your compass and map, guiding you towards a loyal and profitable customer base. But what do you measure exactly?
Grab a cup of tea and let’s look into the key metrics you need to keep your eyes on…
Customer Lifetime Value (CLV):
This metric tells you the total revenue a customer generates over their entire relationship with your brand. A high CLV indicates strong customer loyalty and a positive return on investment for your loyalty efforts.
Repeat Purchase Rate:
Think about the percentage of customers who make multiple purchases from you. A high repeat purchase rate suggests that your customers are satisfied with your products or services and are likely to come back for more.
Net Promoter Score (NPS):
That’s a good one! It gauges customer sentiment by asking them how likely they are to recommend your brand to others. Your goal should be a high NPS score indicating that your customers are loyal and advocates for your business.
Customer Churn Rate:
These are the customers who stop doing business with you within a specific period. You need to aim for a low churn rate which indicates strong customer retention and the effectiveness of your loyalty initiatives.
Average Order Value (AOV):
This tracks the average amount spent per purchase. If AOV is rising it can indicate loyalty leading to larger purchases or successful upselling/cross-selling strategies.
Email Open Rate:
Emails that your recipients actually open. A high open rate suggests that you have done a great job with attention-grabbing subject lines and teasers.
Email Click-Through Rate (CTR):
The percentage of email recipients who click on a link within your email. A high CTR indicates your email content is engaging and compelling enough to drive action. Well done!
Email Deliverability:
Emails sent? This metric will tell you what percentage of them actually reached your customers' inboxes. Be aware of a low deliverability rate as it can indicate issues with your sender reputation or email list hygiene.
Redemption Rate:
What is the percentage of points, rewards, or discounts redeemed within your loyalty program? The redemption rate will tell you exactly that. If you have a high redemption rate then your customers are engaged and satisfied with the program's benefits.
Beyond the Numbers:
While quantitative metrics are crucial, don't neglect qualitative feedback. Be sure to gather feedback from your customers through surveys, interviews, and social media interactions to understand their motivations, expectations, and pain points. We can’t stress enough that qualitative data can provide valuable insights to complement your quantitative metrics and shape your loyalty strategies.