Attracting new customers is expensive. Over the last five years, organic customer acquisition costs have risen close to 50%, with paid acquisition costs rising even more. For eCommerce brands especially, driving existing customer engagement and growth is imperative to maintaining a healthy business across every channel — and a loyalty program is a key to that sustained success.
Whether you’re evaluating how to launch a new loyalty program or enhancing how your current program drives ROI, there are many factors to consider to ensure your program is driving revenue. Among point-earning campaigns, personalized discounts, member perks, tech stack integrations, and more, the most important factor to consider — and the most often misunderstood — is loyalty performance measurement.
Where (and why) brands go wrong when analyzing loyalty performance
Historically, brands that want to understand the value of their loyalty program focus on basic metrics, like points earned, points spent, referrals made, and average amount spent. Plus, they often fail to measure their program’s success based on their industry-specific benchmarks and how the program was initially designed to achieve business goals.
While baseline metrics are important in evaluating engagement, it doesn’t provide brands with the information that really matters: whether their loyalty program is actively influencing their customers’ purchasing decisions.
When evaluating their program, brands should be asking: Does this loyalty program hit the targeted metrics it was designed to achieve? How much revenue is the program generating? How have customer behaviors changed over time? And how is it driving higher lifetime value from each of my customer segments?
But, analyzing the impact of your brand’s loyalty program really means quantifying incremental shifts in customer intent — and without the right tools, reporting on that human data can be challenging. Brands often fall into the trap of assuming that customers would continue to shop with them without a loyalty program in place, and they fail to interrogate exactly how much their program does impact customer behavior.
Typically, a loyalty program member’s journey consists of making a purchase, earning points for that purchase, returning to redeem those points for a discount, and then returning again to make another purchase. It seems simple, but here’s the catch: How much of the second purchase was influenced by their loyalty program engagement, and how much was because they simply wanted to purchase again?
Now, we’re giving you the tools to start answering that challenging question. We’re thrilled to share our new comprehensive loyalty performance dashboards, designed to overcome confirmation bias and give our customers clear and actionable insight into how their loyalty and referral programs are generating ROI.
Moving toward smarter loyalty performance measurement
Yotpo’s Loyalty and Referrals solution includes four new, comprehensive methods of studying loyalty program performance and measuring ROI. Yotpo only reports on active members, showing you precisely how your program has influenced redeeming customers’ behavior. Other solutions report on all users that have signed up for the program but may not be actively participating.
With access to these new dashboards, your brand can make better business decisions that incorporate loyalty and referrals more intelligently — and ultimately drive lifetime value.
Here are the new dashboards, plus a few examples of insights you might derive from them:
Loyalty Performance Dashboard
The Loyalty Performance Dashboard evaluates changes in customer behavior within the program, giving brands real and actionable insights into how those loyalty-driven changes are driving revenue — like measuring added revenue per customer.
Use Case: Your active customers are making repeat purchases less frequently, so you might run a double points campaign to re-engage those shoppers.
VIP Tiers Dashboard
The VIP Tiers Dashboard provides the first detailed look into how many customers are in each VIP tier — and analyzes the differences in behavior and engagement between tiers.
Use Case: Your customers might be reaching the first VIP tier, but they’re rarely making the follow-up purchase that will take them to the second tier. You might reward customers who’ve just earned the first tier with a bonus reward to encourage their next purchase.
Referrals Performance Dashboard
The Referrals Performance Dashboard displays comprehensive analytics on how the referral program brings in revenue for your brand by studying both the behavior of newly referred customers and existing customers who successfully refer the brand to their friends, providing real insight into potential areas of improvement.
Use Case: Your referral acquisition rate has been falling over time, so you might refresh the rewards options available to referring customers to keep them excited to share your brand with more friends.
ROI Dashboard
The ROI Dashboard compiles key health metrics to help brands easily understand the top-line revenue impact from both loyalty and referral programs.
Use Case: Your program participation rate and overall resulting engagement is low, so you might send an email to those customers who’ve earned points but haven’t yet made any redemptions.
How to start using our new dashboards
Login to your Loyalty & Referrals account now to get started with the new dashboards. For more insights into how you can best optimize your program using this additional data, reach out to your Client Success Manager.