KPIs for loyalty programs

    If you are running loyalty/VIP program in your shop here are some KPIs, I recommend that you look to get and in my experience KPIs even vague figures are better than none.

    Membership

    Examine your membership, how big is it, is it growing, declining? Where are the members coming from, existing customers or new customers?

    Usage

    How many are using it and in what frequency.

    Member spending vs non-member spending

    The primary purpose of a loyalty program is to get you more customers and get them to spend more. Is it? So check the sales totals, basket size, profitability etc.

    Pre-membership vs post-membership spending

    Are you just giving away a discount to existing customers, what you need to know is it working?

    Program cost vs profit

    A professional marketer will budget a loyalty program cost at about 1% of sales. Sometimes they take it to 2%, but anything higher without suppliers help is too much so if you are doing a million turnover in your shop, you are looking at about $10,000 cost. Well, in this case, are you getting $10,000 back in profit?

    Net promoter score

    Anyone in marketing wants to know this figure first. You can read about it here in the Wikipedia.

    Whatever the problems with it, it is a standard figure that everyone in marketing can relate too. It is used today by almost every large organisation in Australia both private and public. I believe every organisation should get its NPS and measure it over time. We measure it every year. We also look at it against our competitors too, and ours is better HeHeHe.

    I have put together an information sheet here showing you how to get your figures.

    Published
    2018-03-02T03:11:46.397919Z