Is Your Loyalty Program Working?

We’ve been talking a lot about building loyalty lately. But what really makes a loyalty program work? How can you tell if the tools you’ve set in place for customers to intimately connect with your brand are performing well?

Here at BigDoor, we’re working to solve this problem for businesses and marketers. Although every program is different, there are a few key components you can look at today to see if your program is working well. In today’s post, we highlight those points and offer quick fixes you can implement immediately. Let’s go!

1. Growth of loyalty program users vs. overall audience

You’re customer base is growing, sales numbers are high, and you’re feeling good about your upcoming quarter. But does that success really translate over to your loyalty program?

Loyalty program success should be calculated separately from your growth. To really understand success, you need to know the total number of customers you have, along with the number of those customers who are enrolled in your loyalty program. Once you know both, it’s time to look back at your growth over the past few months. If the percentage of your total customers is growing, but the percentage of growth in your loyalty program isn’t keeping stride, there’s a good chance something in the program isn’t working.

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A quick way to ignite growth is making sure that the value of your program is clearly communicated to your potential subscribers. Some ways to do this is to build a standalone landing page that describes the value of your program to users, enticing them to sign up. You can even run a few A/B tests to see what language, images, and layouts best sell the value of your loyalty program. Unbounce and Optimizely are great tools to run simple tests. Check them out to get you started.

2. Retention of current program members

When it comes to retention, showcasing the value of your loyalty program is front and center. For example, providing a place on your website within the program that offers help links, FAQs, and useful, consistently updated content is a value add that gives program members instantaneous benefits. The more you can invest in your program through updated content, new rewards, and ever-changing experiences, the more intrigued you will keep your existing users. Remember that your customers are people, and people tend to get bored with information that no longer feels relevant to them.

Next, make sure you’re monitoring your loyalty funnel to locate problem areas. The closer you can pinpoint exactly where you’re losing people based on your model, the easier it will be for your marketing team to rethink the on-page experience, and to help drive customers back into the program with new incentives that fit their needs. Communicating with your existing members is a great way to test what works best for them. Whether you’re A/B testing rewards through email campaigns, providing in-program communications, or setting up drip campaigns to help tailor user experience, putting in effort to get to know what your loyal customers really want pays off.

If you do find that people are leaving your program, make sure you have a feedback loop in place to help you figure out why. Cancellation surveys are a great way to better understand what those who’ve left would have liked to see in your program. If you’re seeing a response from customers who have cancelled, it’s time to brainstorm ways to help spread the love once again.

3. Loyalty member activity vs. non-loyalty program customer activity

It’s great when customers stay in your program, but what does their activity look like? Loyalty programs are meant to incentivize and encourage increased engagement, so it’s time look at whether or not your loyalty members are more active, as active, or less active than customers that exist outside of the program.

This might seem hard, but something as simple as tagging your valuable on-site actions in GA, and then tracking how many times your loyalty program members complete them versus those outside of the program is enough to tell you if your loyalty program is driving the right actions.

BigDoor’s loyalty program has the ability to keep a control cohort of users for you to even more clearly compare the two user groups. No matter how you do it, you should be comparing the two user groups regularly to identify if your loyalty program is driving more engagement as hoped.

To reach loyalty program members that are less active, you may want to reach out to those who have “gone dark” and ask them how you can improve your program, and  hopefully re-engage them. Ask them what they would have liked to see more of, and use that feedback to drive improvements across your program and relight the fire within your members.

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4. Percentage of rewards redeemed

Rewards are critical to the success of a loyalty program (we are planning on doing a much more in depth post on best practices soon!) Rewards are enticing, but if a low percentage of qualified members are redeeming your offering(s), something is probably wrong. Keep an eye on how many users are completing your desired actions to gauge their interest in your loyalty program, and compare that with the number of rewards you’ve given away. This will tell you if you have the right rewards in place, or if you need to rethink them.

Keep in mind that the types and costs of your rewards differ, and be sure to weight them accordingly. Are your users redeeming rewards that are perceived as having high value but are low-cost to your brand, or are they redeeming rewards that are high-cost items on both sides? Does the reward give customers something that they really wanted, or does it simply deepen engagement with your brand?

Answering these questions will help shed light on the motivations behind your users’ redemptions. For example, a discount coupon or a shout out on Twitter both help deepen engagement with your brand; a non-branded mug or hat does not. A combination of dollar backed and non-dollar backed rewards offers something for everyone in your program; does your loyalty program have the ability to provide both options?

If the number(s) of customers redeeming rewards is low, you may want to go back to the drawing board when structuring your rewards and redemption process. That neon orange bumper sticker you’re giving away might not be a big enough incentive for everyone to redeem it.

Screen Shot 2013-09-18 at 9.57.22 PM Image credit to Ian Watkins.

5. Referrals into your program

One of the best ways to grow your loyalty program is to leverage your current loyalty program members and have them refer in from their social circles. The key is to reward your members for taking that action, and reward those that have been referred in for completing the task.

Before you dive into your referral numbers, take a look at the tools you have in place for current members to share your program. If current members don’t have an easy opportunity to spread the word to their networks, the likelihood of them taking the action is low. Tools like a refer-a-friend program (part of the BigDoor product) and recruitment widgets make sharing simple, fun, and seamless for your existing members.

Once new members are sent your way through a referral, you want to make sure you greet them right! Make the onboarding process for the new member easy, streamlined, and polished. Providing your advocates with a simple experience that is generously appreciated on both sides causes the best kind of snowball effect.

6. Shares from the program

A strong indicator of how loyal your customers and fans are is through monitoring social engagement. Are people using social media to brag about their interactions with your brand and the rewards they are redeeming, or are they only using it as a communication channel between themselves and your brand? Are they discovering and sharing your incentivized content? What is the tone when program members talk about your brand, and what does your reciprocal interaction look like?

Sharing content on social networks could require it’s own blog post, but for now, I’ll leave you with this: people (both loyalty members and prospective customers) are talking about you online, whether you are present or not. As a marketer, it is your job to keep tabs on the community pulse, and to help move the conversation forward whenever possible, encouraging loyalty and driving fans to engage with your brand further through your loyalty program.

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 Image credit to Lee Traupel

Each social network has its own set of relevant insights, so whether you’re Tweeting, Facebooking, Pinteresting, or LinkedIning (is that a thing?), you’ll need to get your hands on some hard data. SimplyMeasured’s free reports do this really well. Give them a try!

Hopefully these tips will encourage you to take a look at your existing loyalty program, and begin to think about whether it’s working as well as it could be.

This list is only the tip of the iceberg when it comes to loyalty. What other pieces of the loyalty puzzle do you focus on when gauging success? I’d love to hear your thoughts in the comments below!

About Ashley Tate

Ashley is the Director of Marketing at BigDoor. A content marketing and startup enthusiast, she blogs about loyalty, customer retention, content strategy, inbound marketing, and her dog, Darwin. Follow Ashley on Twitter @ashtate.

  • Brian Hansford

    Loyalty Programs only work if there is clear value for the customers to engage. And a loyalty program assumes customers are happy with what they bought to begin with. Think about Comcast. They have a captive customer base that mostly hates them. (I do.) And I talk about that openly. All of these items are great but unless the value is emphasized, and supported, loyalty programs won’t take off.

    Brian Hansford

    • Ashley Tate

      I agree 100%, Brian. Being cognizant of your customers’ time and rewarding them for interaction accordingly is key to loyalty program success. If the incentive and value behind engagement doesn’t match the effort spent, it’s not likely that customers will engage as hoped.

      Thanks for sharing your thoughts. It’s great to see so many people thinking about loyalty!