Episode 60 – 5 Loyalty Program Metrics That Matter

Welcome Loyal listeners to episode 60 of the loyalty minute. Today we’re going to be talking about 5 Loyalty Program Metrics That Matter.

This article was written by Brittney Brown, Consultant on the Aimia Strategy & Consulting Team

Metric 1 – MEMBER ACQUISITION
Simply put, member acquisition is how many new members are joining your program over a specific time period. This KPI is important because without hitting your membership targets, it can often be challenging to meet many of your overall financial goals. You would be surprised to know how many loyalty program managers do not know this metric.
Metric #2 – MEMBER LIFT IN SPEND
Your member lift in spend KPI is the percent increase in spend for active members versus non-members. Your loyalty program should increase overall member spend if you want to drive incremental revenue and increase profits.
Metric #3 – REWARD REDEMPTION RATE
Your reward redemption rate is the percent of your currency earned (i.e. points, vouchers, etc.) that are being redeemed.
Metric #4 – CHURN RATE REDUCTION
Your churn rate is the percentage of “at-risk” members that you can save from leaving the program, and potentially your brand. It’s vital to know this KPI because it directly impacts your total company revenue.
Metric #5 – INCREMENTAL MARGIN
This KPI is the increase or decrease in profit [ (incremental revenue x margin) – program costs ]. This loyalty program KPI is vital because it determines the overall health of your loyalty program.

In the full article, Brittney goes into great detail on each metric and how to improve them all, and is well worth the read.

Tagged as: loyalty programs, loyalty metrics, loyalty KPIs.