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1、The Ultimate Guide to Loyalty Management EBOOKTable of Contents1Introduction Why is Loyalty Management a Hot Topic?2What is Loyalty Management?4How do you Choose the Right Loyalty Management Software?10When is it Time to Partner with a Loyalty Management Company?13What Loyalty Management Services Sh

2、ould You Expect from a Partner?20How Do You Choose the Right Loyalty Management Partner?23How Can You Leverage Loyalty Management Data to Increase Engagement with Your Best Customers?30Loyalty Management Doesnt Need to be Overwhelming 1ebbo The Ultimate Guide to Loyalty ManagementWhy is Loyalty Mana

3、gement a Hot Topic?If boosting customer engagement is a priority for your brand,you know loyalty management is both a necessity and a challenge.Your loyalty program touches so many parts of your customer experience.From your website to your stores to your backend resources like development,marketing

4、,customer service and finance,loyalty is complex.Do you tackle it in-house?Do you find a specialized loyalty partner to work with?With so many different platforms,consultants and vendors out there,its daunting.Not to mention,every brand is different,and your loyalty program needs to be tailored to y

5、our unique customers and goals.Whether you already have a loyalty program that needs some updating or youre thinking about launching one for the first time,there is a lot to consider and a lot of questions to ask potential partners.Whatever your companys situation,this guide will show you everything

6、 you need to know about loyalty management and help get you started on the path to building better customer relationships.A great place to start is defining loyalty management.2ebbo The Ultimate Guide to Loyalty ManagementWhat is Loyalty Management?CHAPTER 13ebbo The Ultimate Guide to Loyalty Manage

7、ment Simply defined,loyalty management is the strategy,tools and tactics your company uses to acquire,engage with and retain customers.Loyalty program construct Rewards and benefits mix Technology enhancements Creative services Member communications&marketing Member acquisition strategy Billing engi

8、ne(in the case of premium loyalty programs)Branded customer service Client services Loyalty program optimizationAside from your loyalty platform itself,comprehensive loyalty management includes numerous elements:This includes your loyalty marketing strategy,loyalty program platform itself and all th

9、e managed services required to build and run a successful program.All these pieces need to work together for a successful loyalty program.There are some brands who handle everything in-house.But managing all these pieces efficiently and effectively requires a significant number of resources,technolo

10、gy and expertise.For this reason,most retailers choose to outsource some,if not all,of their loyalty management needs to qualified loyalty management companies.So,now that you have a solid understand of loyalty management in general,its time to start thinking about platforms.How can you entice them

11、to join with the right marketing?Once theyre in,how do you keep them engaging?Is the loyalty program experience consistent with your brand?Are your in-store associates properly trained to help educate customers about the program?Are you able to upgrade your program over time?Whos running the day-to-

12、day?Do you have the internal resources to manage it all?Should you outsource it?Acquiring new program members is just the beginning retaining existing program members and maximizing your relationships with them are equally important.4ebbo The Ultimate Guide to Loyalty ManagementHow Do You Choose the

13、 Right Loyalty Management Platform?CHAPTER 25ebbo The Ultimate Guide to Loyalty Management Choosing the right loyalty management platform can be daunting.After all,your loyalty program is a huge part of your overall brand and customer experience.With so many choices,which system is the best?Will the

14、re be unexpected or hidden costs?Can it really solve your challenges?And can it do what your customers expect?There are a staggering number of features out there to consider when assessing your loyalty management platform needs.But the decision comes down to how you answer these questions.What do I

15、like and dislike about my current loyalty management software?If you currently have a loyalty program and youre looking to re-platform,its important to start here.(And even if you dont have a platform today,you should still consider what your ideal program would look like.)Whats working and what isn

16、t with your current platform today?Maybe your current platform does a good job with reporting,but its very difficult to customize or add to it over time.Perhaps you are thinking of adding a premium loyalty program that your best customers will pay to join,but your platform doesnt support billing.Or

17、maybe your annual licensing fee just feels a bit astronomical.Its important to make a list of likes and dislikes to help you narrow down your potential software vendors as you go.Then,start asking yourself more questions as you evaluate platforms.6ebbo The Ultimate Guide to Loyalty ManagementCan it

18、support the types of rewards my customers value most?At the core of most loyalty programs is some type of currency that eventually earns rewards.Points-based loyalty programs are the most common and are a great way to engage your customers.But because we live in an increasingly instant world,many co

19、nsumers have come to expect more,faster.While these customers have higher expectations,many are willing to pay for membership in a premium loyalty program,or a premium tier of a program.Recognizing the value such programs offer,these customers would invest in enhanced benefits like instant discounts

20、,free shipping and exclusive experiences.Whether its a traditional free-to-join program,a standalone premium loyalty program or a tiered program,considering which type of loyalty program would be most compelling to your customers is an important step.Next,think about the loyalty currency your softwa

21、re will need to support.For a traditional program,it will just need the ability to manage points.But if youre thinking about launching a premium loyalty program,the currency can be broader and require additional capabilities from awarding instant benefits and cash back to giving aways gift cards fro

22、m your brand.Its also a wise decision to offer points or rewards in exchange for non-purchase behavior like taking polls,filling out questionnaires,sharing on social media,viewing content and more.To be successful,ensure your potential loyalty management platform can handle the types of rewards your

23、 customers prefer.7ebbo The Ultimate Guide to Loyalty ManagementCan I use it to send personalized marketing and promotions?Personalized communications and offers are more relevant to members,so they drive higher response rates and increase program engagement.Basic personalization elements might incl

24、ude the members name,tier status,recognition of their performance in the program and the overall value to them.Targeted promotional offers based on profile,segment,program performance and tier are also possible.On the more advanced side,some loyalty management software allows for dynamic content.Thi

25、s is web content that can change based on individual members behavior,preferences and interest.If you want to engage your best customers,you can use this technology to dynamically change not only their website experience but also the email content you send them.Its all based on the data you collect

26、from your members.Its critical that your loyalty management platform can collect and analyze data on your members to offer a relevant and personalized experience.Can I use it to analyze that data for optimization?Does your loyalty management software offer the ability to provide predictive and presc

27、riptive analytical services?A loyalty program can be one of the best data collection tools available.What could be better than collecting zero-and first-party data on your best customers?There are certain KPIs your software should track to deliver deeper insights and strategies that can be used to o

28、ptimize your program.For example,member acquisition,increase in spending,reward redemption rate and churn are all important pieces of data to measure the health of your program.Product usage is also critical.It will give you insights into what benefits your members love and which ones dont get much

29、use.This is the foundation of personalization.Once you start collecting this data,your analytics team,or an external partners team,can help generate actionable customer insights through data.Remember,data collected from your loyalty program is coming directly from your best customers.Its like gold f

30、or your marketing efforts.8ebbo The Ultimate Guide to Loyalty Management How easy is it to add to my loyalty management software over time?Ideally,the loyalty management software you choose can collect a lot of great data.But once you have it,how easy is it to update your program based on your findi

31、ngs?Loyalty programs should never be“set it and forget it”because consumer tastes,habits and expectations are ever-changing.The data you collect enables you to truly listen to what your customers are saying and understand their needs,but if your platform makes it hard to update and enhance your loya

32、lty program,what good are those customer insights?Are enough customers signing up for your program?Is the value proposition compelling enough?Which benefits arent being used?Should you cut them?When members arent as active as youd like them to be,are you communicating with them enough through your p

33、latform?The right loyalty management software will empower you to optimize your program based on a wide variety of factors,such as:Remember,once your program launches,its only the beginning.Make sure whatever platform you go with is designed with optimization in mind.9ebbo The Ultimate Guide to Loya

34、lty ManagementIs the platform secure?Whenever youre collecting data from your customers,privacy and security are critical.How is the data collected?Where is it stored?Is it being used correctly based on what youre asking for from your members?If managing your loyalty program platform in-house,do you

35、 have the loyalty compliance,legal and IT security specialists on staff to handle this?State-of-the-art web application firewalls,cutting-edge user fraud systems and secure data centers that are routinely scanned for vulnerabilities are all requirements.And if youre offering a premium loyalty progra

36、m where members are paying a fee,youll need to ensure PCI compliance.When choosing loyalty platform,its important that the platform is not only secure but that you also have the necessary resources in place to manage it.How important is brand identity?From the very first customer interaction,your lo

37、yalty platform must look and feel like your brand to ensure a consistent experience across all touchpoints.That means your platform should be customizable to your brand identity standards.Beyond just logos,colors and fonts,the communications from your loyalty platform should match the tone,look and

38、feel of your brand.While a loyalty platform may be a separate system on the backend,to your customers,its all part of the same brand experience.So,ask yourself When a customer logs into their loyalty account,can they recognize if theyre taken to a different location?No two retailer programs should f

39、eel the same you must be able to tailor the structure,mechanics,rewards and experience for your customers and their specific objectives.What are my technical capabilities?Or,perhaps another question is,“How challenging will my technical integration be?”Obviously,you want your loyalty management soft

40、ware to integrate with your POS system,website and other touchpoints as easily as possible.So,make sure potential vendors have standardized APIs and an API developer portal.APIs(or Application Program Interfaces)are important for all aspects of business technology,including loyalty programs,because

41、they allow different programs to communicate.Through APIs,your internal systems connect with those of your loyalty platform seamlessly,eliminating the need for costly and time-consuming custom technical integration.In addition to the necessary APIs,an API Developer Portal is recommended to provide d

42、etailed integration documentation that gives you a clear understanding of integration preferences.The portal will give your IT team an idea of how easy or difficult technical integration can be and communicates a standard baseline process.It serves as a developer resource center that provides your t

43、eam clear instructions to hook into the loyalty platform,how to format data and more.So,ask potential loyalty vendors how much development time their platforms typically require.What would it take from your team to get their program fully integrated and up and running?Once youve considered all these

44、 questions,its time to start the search.Its important to get buy-in from your team at this point to ensure everyone is on the same page.The last thing youd want is to make a shortlist of potential vendors only to find out there is misalignment on goals,budget,resources or expectations.The important

45、thing to remember is that most vendors are going to tell you their loyalty management software is the best.Make sure you know what will work for you and your customers before making a commitment.10ebbo The Ultimate Guide to Loyalty ManagementWhen is it Time to Partner with a Loyalty Management Compa

46、ny?CHAPTER 311ebbo The Ultimate Guide to Loyalty Management Now that you know what questions to ask when looking for software,consider the benefits of partnering with a loyalty management company.While some retailers have attempted to bring everything in-house,many struggle with the complexities of

47、managing a loyalty program.Every brand is different.Each has different goals and different customers as well as different skill sets internally.When is it time to find a partner?Thats a tough one to answer.Have my best customers been engaging with my program?Have I revamped my loyalty program within

48、 the last year,or has it gotten a little stagnant?Do I have the budget to work with a partner?Can I afford to take my time with a launch or revamp?Is my program unique and not like that of my competitors?Does my ambition align with current capabilities?Are my customers evangelizing for my program?Ca

49、n I wait for changes and updates to be made?Does my program have robust data and analytics capabilities?The best place to start here is by assessing your needs.Ask yourself these questions:A loyalty program is a complex undertaking for any company.The questions above can help you understand if its t

50、he right time to look for a loyalty management company,or if you are equipped to manage and optimize your program yourself.Regardless of how you answered those questions,there are a few universal truths about working with a loyalty management company that you should consider.12ebbo The Ultimate Guid

51、e to Loyalty Management When you work with a partner you benefit from:A lighter lift on internal resources across the company.This includes marketing,marketing operations,data and IT.This includes strategy,creative&U/X,content moderation,development,program management,data&analytics,customer service

52、,legal and prize management.Reduced need for your IT to upkeep your internal system.Staffing and creating a loyalty program is hard enough.Upkeeping a program over time takes constant effort.Thats why many companies dont test enough new things with their programs their entire focus is on keeping the

53、 current program running.Continuous innovation.When you work with a partner,they will update their systems and processes over time with the learnings they receive across multiple companies.When you work with a partner here,you will have access to these updates.Loyalty management partners specialize

54、in all the above areas which takes all those responsibilities off your shoulders so you can focus on your business.We live in the age of the customer.Their expectations are changing constantly and rapidly.Thats why its so important to analyze data and be able to enhance your program nimbly over time

55、.Speed and customizability are essential.Your loyalty program should be a differentiator.Look for a partner that can build a custom program that your best customers will love,all within your budget and timeframe.13ebbo The Ultimate Guide to Loyalty ManagementWhat Loyalty Management Services Should Y

56、ou Expect from a Partner?CHAPTER 414ebbo The Ultimate Guide to Loyalty ManagementThere are a staggering number of partners out there.Not all of them are created equally.And while they all offer various loyalty management services,what matters for your brand may be different than another.Here are sev

57、en essential services you should ask any potential partner about:Client Services Loyalty Strategy Technology Services Creative Services Marketing Campaign Management Data and Analytics Privacy&Security Client ServicesThe Client Services team is at the heart of your relationship with your loyalty par

58、tner.An account manager from this team will be your day-to-day contact and is like an extension of your team.This person should be keeping in constant communication with you and working towards your KPIs.They know your brand,your customers and your goals.Want to add a new feature to your program?Loo

59、king for assistance analyzing member data?Have any questions or concerns about how your program is performing?The Client Services team is there to help with any of that.From your initial launch to ongoing support to quarterly business reviews,this team is focused on making your loyalty program a suc

60、cess.Many loyalty companies that do provide this service but be sure to ask your potential partner.If not,youll be on your own once your program launches.Loyalty StrategyA one-size-fits-all loyalty program doesnt work today.You need to figure out what your customers value and build a program to suit

61、 them.This involves a Loyalty Strategy team to make sure this process goes smoothly.Typically,holding a stakeholder alignment meeting is the first step.Key people from your finance,technology,store operations,CRM and merchandising teams must all be in alignment with your loyalty partner.15ebbo The U

62、ltimate Guide to Loyalty Management Its important for your partner to fully understand the priorities of each stakeholder,to make sure your loyalty program will help them achieve their goals.What are your goals and objectives for this program?What are you doing today,or what have you done in the pas

63、t,as it relates to loyalty?Do you have any existing metrics that indicate consumers behaving positively?Are there any loyalty tactics out there that are interesting or that you would like to explore?What are your competitors doing?Your potential partner should be asking questions like:This is also a

64、 great time to uncover any potential budget or technology constraints.Once all the above questions are explored,its time to start thinking about product construct.Should this be a free,premium or tiered program?What benefits and rewards would your customers value most?Aside from transactional benefi

65、ts like discounts,what are some exclusive experiential benefits you could offer?When you work with a loyalty management partner,they should make sure that everyone is aligned with the goals of the program.Will your potential partner work with you on loyalty strategy,stakeholder alignment and program

66、 construct to develop a program that is custom-tailored to your brand?Or are they simply selling you a standard,out-of-the-box platform and leaving the rest up to you?Its critical to gain a solid understanding of exactly the type of resources needed from your end to build and maintain your program.1

67、6ebbo The Ultimate Guide to Loyalty ManagementTechnology ServicesIts also important to understand how your loyalty partner will handle the technical aspects of your program.Are they able to integrate seamlessly with other existing systems that you have in-place like your website and POS?Is the platf

68、orm a standard,off-the-shelf solution,or will this solution be custom-built for your brand?What does the integration look like from a timing perspective and what are the costs associated with it?Your partner should first start with a gap analysis to examine current technology versus where you want y

69、our loyalty program to be.This will help identify the data sources needed for integration and the actual integration points.It will also help set a realistic timeline to launch.Ask potential partners if they have standard APIs to make hooking into your existing infrastructure easier.(A good document

70、 for your technology team to review is your partners API Developer Portal.)This will give your team an idea of how easy(or difficult)integration with their platform will be.And once your program does launch,how easy is it to update over time?Is that something your partner can do for you quickly?How

71、much will that cost?17ebbo The Ultimate Guide to Loyalty ManagementCreative ServicesYour brand is everything.More than just your name or logo or color palette,its the overall experience your customers have when they interact with your company and products.Its your customers perception of your compan

72、y across all touchpoints website,emails,social media pages,video,in-store and everything in between.And its also what makes you different from your competitors.Branding your loyalty program cannot be an afterthought.Thats why Creative Services are important to consider upfront.Your ideal loyalty man

73、agement partner will offer in-house creative services and expertise.A great loyalty management partner will start with your brand identity guidelines to make sure every element is on-brand down to the colors,fonts,image styles and tone of the copy.Whether its a digital marketing campaigns around the

74、 program or an in-store experience,all emails,promotional cards,counter mats and signage must look and feel like your brand Right down to training in-store associates on your loyalty program and how to get customers excited to join.Brand consistency is key when it comes to your loyalty program.If th

75、e customer experience feels disjointed when they interact with your program,it comes off as cobbled together and inauthentic.When looking for a loyalty partner,ask them how they would approach branding the experience.What will they do to ensure your program is consistent with all other touchpoints?1

76、8ebbo The Ultimate Guide to Loyalty ManagementMarketing Campaign ManagementOnce your loyalty program is built and in-market,how will you attract and acquire new members?And just as importantly,how will you keep them engaged?Marketing to attract customers to sign up New member welcome communications

77、Ongoing communications to keep members informed and engaged Special promotions to keep your program fresh and exciting You need to consider:Such considerations are especially important if youre thinking about a premium loyalty program because your customers are paying to belong.When youre asking som

78、eone to sign up for a free program,youre just asking for an email address.But with a premium loyalty program,its a monetary investment for your members.You need to be looking at the data and evaluating what you need to do to resonate with customers and have the right benefits to keep them engaging.C

79、onstant optimization from a marketing perspective is key.This is a key service to ensure your programs success and something your brand and loyalty management partner need to be in complete alignment on.Ask your potential partner how they can assist with both attracting members and keeping them enga

80、ged for the long run through marketing communications.Many loyalty partners can help with loyalty marketing campaign management to make sure your customers are not only aware of the program but receive regular communications to keep them coming back for more.Your partner should be able to design and

81、 execute personalized and targeted program messaging,promotions and offers through all channels(web,email,mobile and print).19ebbo The Ultimate Guide to Loyalty ManagementData and Analytics Analyzing the data generated from your loyalty program and regular reporting are crucial to understanding what

82、s working and where you may need to optimize.Make sure you know how often your loyalty management partner will provide reporting metrics,and what those metrics will be.This is a key area where your loyalty partner can offer expert advice based on the results generated in your program.Your loyalty pa

83、rtner should use the data to uncover insights that lead to strategic recommendations to enhance the member experience and evolve the program.For example,if your join count is low,you should look at whether or not customers think your programs rewards are compelling or consider whether your in-store

84、associates need more training to evangelize the program and get customers to sign up.If you have a high churn rate,it could mean that members are not getting value out of the program.In that case,it may be time to rethink some of the benefits and rewards youre offering.All this information will help

85、 you better understand your members and their expectations.Thats why its so important for your partner to be transparent with you on the successes and struggles the program is experiencing.This reporting allows for open communication with your partner and gives you the opportunity to evaluate your p

86、rogram and make changes where you see fit.So,ask your potential partner what types of data they collect,what that data means and how often theyre reporting on it to deliver strategic recommendations.How big of a concern is privacy&security?Whenever youre collecting data from your customers,privacy a

87、nd security are critical.How is the data collected?Where is it stored?Is it being used correctly based on what youre asking for from your members?If managing your loyalty program platform in-house,do you have the loyalty compliance,legal and IT security specialists on staff to handle this?State-of-t

88、he-art web application firewalls,cutting-edge user fraud systems,and secure data centers that are routinely scanned for vulnerabilities are all requirements.And if youre offering a premium loyalty program where members are paying a fee,youll need to ensure PCI compliance.All these managed services g

89、o back to a great client services team.They are your loyalty liaison and are the go-between for all the other services.They know your brand,your customers,and your goals.For your brand to offer a truly unique loyalty program,personalization and relevancy driven by customer data insights,you need to

90、focus on individual consumer journeys.And the right loyalty management partner can help you achieve that.After all,a great loyalty partner should have just as much at stake in the program as your company does.20ebbo The Ultimate Guide to Loyalty ManagementHow do You Choose the Right Loyalty Manageme

91、nt Partner?CHAPTER 521ebbo The Ultimate Guide to Loyalty ManagementAside from offering the right services,your ideal loyalty management partner should also be a good fit for your brand.Consider a few key factors:Do you need help with your loyalty strategy?Do you have the resources to undertake build

92、ing a platform internally?Do you have the personal to manage,analyze and optimize your program over time?Loyalty AgenciesLoyalty agencies offer a range of services designed to help brands with all their loyalty needs.These services include consulting,market research,building and managing loyalty pro

93、grams,measuring performance,customer relationship marketing and offering operational support.And while they can help you choose a loyalty platform most dont have their own proprietary system.They prefer to work with existing platforms.What they can do,however,is offer support by helping you set KPI(

94、Key Performance Indicator)benchmarks and leverage data and customer insights to inform optimizations over time.They evaluate and monitor your program on an ongoing basis,adjusting when necessary.If youre looking to dip your toes in the water and need help with strategy,it may be good to consult with

95、 a loyalty agency.But if youre looking for a custom loyalty program with a full suite of value-added services,along with a team to manage and optimize it,a traditional loyalty agency might not be the best fit for your needs.Three main types of loyalty management partners can fit your needs depending

96、 on how you answer.22ebbo The Ultimate Guide to Loyalty ManagementLoyalty Technology Platform VendorsThese types of vendors build and sell loyalty technology platforms,usually as SaaS solutions.Vendors selling loyalty technology platforms offer services such as implementation,integration,analytics a

97、nd support.And while some may also offer creative and design services,most outsource this to other agencies and third-party vendors.Loyalty platform vendors typically charge an annual or monthly licensing fee,as well as incremental charges for consulting and setup.Not all platforms are created equal

98、,so make sure you know what youre looking for before you seek vendor information.If you have the resources and experience to handle strategy,technology,creative,marketing,analytics and optimization plus the budget to handle the costs a technology platform vendor might be worth reaching out to.End-to

99、-End Loyalty Companies As far as the loyalty management industry goes,these vendors do it all.They offer the most comprehensive solutions because they are involved every step of the way from consulting and technology to a range of services capabilities that include everything from strategy to progra

100、m management,to loyalty measurement and analytics.They are involved with your loyalty program and accompanying strategies from Day 1 and monitor and manage your program daily after it launches.They provide end-to-end services in managing your program,so you dont have to.Find a loyalty partner that t

101、akes a holistic,data-driven approach,is forward-thinking,understands your goals and works toward achieving them and is trusted and reliable.To start,what kind of loyalty program do you want to offer your customers?Will it be a free,points-based program?Or a premium loyalty program that members pay f

102、or?Or a combined program with a free and a premium tier?What are your customers biggest pain points?How can this new program address those engagingly?How much of it do you want to manage yourself?Can your loyalty management partner build everything for you turnkey?And can they manage it from launch

103、and beyond?Choosing the right partner comes down to some big questions.23ebbo The Ultimate Guide to Loyalty ManagementHow Can You Leverage Loyalty Management DataCHAPTER 624ebbo The Ultimate Guide to Loyalty ManagementNow that you have a good understanding of loyalty management,platforms and partner

104、s,its time to consider what happens after your program launches.One of the most important factors is the data you collect on your best customers.What data matters most?What KPIs should you be working towards?Here are ten KPIs you should be thinking about to keep a pulse on your program performance s

105、o you can make further optimizations over time.Join count Conversion rate Member retention rate Churn rate Member engagement rate Purchase frequency Average order value(AOV)Incremental margin Customer lifetime value(CLTV)for premium loyalty programs Refunds for premium loyalty programs 25ebbo The Ul

106、timate Guide to Loyalty ManagementMember acquisitionNew members are the lifeblood of any loyalty program,so acquiring them is critical.While this KPI is simply the number of new members who join your program during a certain period,what it tells you goes much deeper.If this number starts to fall,or

107、your join rate is low from the get-go,it raises some questions:Healthy conversion rates elevate loyalty program engagement,retention,and encourage brand advocacy.When am I asking people to join the program?What mediums am I using to tell customers about the program and how it will benefit them?Is my

108、 message resonating?Are my associates well versed in the features and benefits?Is my program easy to understand?Are the rewards compelling to my target audience?Does the marketing around my program resonate?Do my customers find it easy to sign up?Are my in-store associates educated about the program

109、?Are they getting customers excited about it?And in a premium loyalty program that customers are paying to be in,does the value proposition make sense?Making it easy for consumers to join your program,and showing its value,is the best thing you can do to impact join count.Conversion rateConversions

110、are defined as the number of joins a loyalty program receives from its online marketing efforts.Conversion rate is an important metric because it not only reveals how effective online marketing is,but also whether the programs benefits are enticing members to join.If this KPI is low,its a good indic

111、ator that you should revisit your marketing efforts.Member retentionThe only thing more important than converting costumers into members is retaining them in the program.Retention means the length of time members stay with a loyalty program.It can cost five times as much to attract a new customer th

112、an to retain an existing one.In a traditional free loyalty program,members will simply stop using the program if they arent getting value from it.In a premium loyalty program that members are paying for,they will cancel or choose not to renew.Either way,if the retention rate is low,its time for you

113、and your loyalty partner to work together and figure out how to enhance the program and add more value.The goal is to have a long retention rate because this means the program is truly adding value to members lives.26ebbo The Ultimate Guide to Loyalty Management Churn rateChurn is a bad word as it r

114、elates to customer loyalty,especially premium loyalty its the opposite of retention.Simply put,its the percentage of members who cancel their memberships per month.While traditional loyalty program members will just stop engaging the program(which makes determining a true churn rate tricky),customer

115、s must actively cancel their membership in a premium loyalty program.And because members are paying a recurring fee to belong to a premium loyalty program,a high churn rate requires immediate action.Churn is usually a symptom of members not getting value out of your program or getting the wrong type

116、s of benefits.If this KPI is high,a good first step is to survey your members and look closely at your data to see what benefits theyre using to determine where more value could be added.Like trial cancel rate in a premium loyalty program,you want a low churn rate because that means members enjoy th

117、e programs benefits and dont have a reason to cancel.For traditional loyalty programs,it also means youre adding new members faster than youre losing current members.Therefore,its critical to continue adding to and optimizing your loyalty program to keep up with changing consumer expectations.27ebbo

118、 The Ultimate Guide to Loyalty ManagementMember engagementThis is the most important KPI for any loyalty program.If members arent engaged,they wont use the program very often,or at all.This KPI shows which program benefits are most and least popular with your members.A high figure shows members are

119、enjoying the programs benefits thoroughly.But if the rate is lower,its time to reevaluate your incentive strategy.Are there certain benefits that can be cut and replaced with others?Do members feel theyre not getting enough value of out the program?Is it taking too long to earn rewards?Program usage

120、 ties into all other KPIs.If members are actively using the program,all the KPIs should skew in a positive direction.The more members engage,the more value they see,and the longer they stay with the program.Purchase frequencySuccessful loyalty programs drive members to spend more as they shop more.A

121、s members use the program more and earn rewards more often,they are more likely to shop more frequently.For example,Amazon Prime members spend$600 more per year on average than non-Prime members.This is particularly true of premium loyalty members once they invest in joining,they become your best cu

122、stomers because they want to make sure theyre getting the most out of the program.Average order value One of the biggest benefits a loyalty program can bring is an increase in average order value.When members earn rewards back to your brand for engaging with the program,it is proven that they will s

123、pend above and beyond the reward dollar amount and above your current AOV.This KPI certainly is critical to judge the overall success of any loyalty program.If you compare it to the AOV of non-members,its easy to see how much value your program is bringing to your bottom line.28ebbo The Ultimate Gui

124、de to Loyalty ManagementIncremental marginThis KPI is vital for the long-term health and viability of any loyalty program because it focuses on profitability.If your program doesnt show a positive incremental margin by the end of its second year,you might not be driving enough top-line revenue and/o

125、r your program costs are too high.If this is the case,lower your program costs and consider adjusting the program to offer value outside of monetary rewards.While this KPI determines the attractiveness of your program and its flexibility,it also shows how your brand can personalize the program to va

126、rious members.Because if your rewards dont spark increased spending from your members,youll need to adjust.For the program to be profitable and sustainable,your members must contribute more dollars than the company invests in funding the program.The most profitable loyalty programs invest more in th

127、eir best customers which is especially true for premium loyalty programs.Once the brands best customers become members,they benefit from the program even more because they engage with the brand more frequently.29ebbo The Ultimate Guide to Loyalty Management Customer lifetime value(CLTV)Customer Life

128、time Value,or CLTV,is a comprehensive metric that shows the projected value of members in your program.Its important to understand how much each member is worth over the lifetime of his or her membership.To calculate a members CLTV,combine the average number of months a customer stays in the program

129、 with the cost per month,and that gives you the total lifetime value of each member.In premium loyalty programs,the most important component of LTV is the trial cancel rate.The lower the trial cancel rates,the better your prospects for future program success.It means your members are enjoying the pr

130、oduct and will likely stick with it.A higher CLTV signals the product is healthy and helps you build better relationships with your members.Its important to not only track these metrics but also analyze them.Your loyalty partner should act as a consultant when it comes to data.They should use this d

131、ata to determine whats working and to make recommendations as to what can be optimized.30ebbo The Ultimate Guide to Loyalty ManagementLoyalty Management Doesnt Need to be Overwhelming CHAPTER 731ebbo The Ultimate Guide to Loyalty ManagementManaging customer loyalty is a massive undertaking with many

132、 moving parts.But with the right platform and partner,it can help you build a stronger brand and a more successful company.The important thing is to put your customers at the center.What would they value the most in your loyalty program?From there,think about your biggest goals,your ambitions and yo

133、ur resources.And if you ever have any questions about loyalty management,please feel free to reach out to us at any time.ebbo The Ultimate Guide to Loyalty ManagementAbout ebboebbo is an all-in-one loyalty company that has helped leading brands build unforgettable customer experiences for over two d

134、ecades.With our data-driven strategy,full-service approach and the unwavering support of the people behind our platform,our dedicated team will work with you to understand your loyalty goals,innovate solutions and help you build customer engagement on repeat.ebbo is headquartered in Rocky Hill,CT,with offices in Michigan and team members all over the U.S.If youd like to learn more about how to increase customer engagement,visit to learn more.