Metrics that Matter is a series of posts highlighting metrics that you should consider tracking to successfully monitor and manage the health of your loyalty program.
If engagement is the heart of a rewards program, then engagement metrics can be considered the backbone. Engagement metrics provides insight into how a rewards program is performing and what aspects need an adjustment. In this ongoing Metrics That Matter series, we touch on relevant metrics that help you improve your rewards program. These engagement metrics will teach you what to look for, in addition to some examples of how to use them.
Impression tracking allows you to track when rewards are seen with your rewards catalog. Ideally, impressions tracking should be tracked on an aggregate basis, as well as for each reward. Impressions is not a metric that is typically tracked within loyalty programs, but one that we find critical to follow to monitor the real value of the rewards in your catalog.
Tracking impressions to members on an aggregate basis enables you to see how many rewards your active members are seeing. If the impression figure is low, members are clearly not looking at the catalog, so there might be some messaging that needs to be improved, or the catalog of offers might be in need of a refreshment.
Tracking impressions for individual rewards is helpful because it allows you to see what rewards are being seen by users and if people are redeeming the rewards they see in the catalog. For example, let’s say that a reward catalog is organized alphabetically and that there is a reward in the catalog from YogaWorks that seems to be performing poorly. The poor performance isn’t necessarily due to it being an undesirable reward offer, but because the catalog is organized alphabetically, and most users do not get all the way to the ‘Y’ section.
Tip: Consistently review impression data and reorganize your catalog and/or swap out rewards regularly to keep the catalog fresh.
Tracking orders and the corresponding number of points spent on those orders provides insight into how active your members are for a particular period. Tracking this information over time will allow you to look at historical data to see how the number of orders and point spend has changed over time.
For example, if you see the point spend down and the total orders significantly higher in one month it is likely that members are burning points on low-value rewards. This outcome might have been the goal for this particular program. Nonetheless, having insight into the number of orders, and the points spent on those orders will be helpful in making decisions.
Tip: Set internal goals for the number of orders or point spend during a specified time period and use your marketing messaging to drive these actions. Then, see how your members behave within the program and how their points.
Tracking the payout to the retail value of the rewards shows you the value that you are extracting from your program. The bigger the difference between the two the better.
The goal of all programs is to confer value to your members while keeping the cost of that value to you, the program, within budget or potentially driving some revenue. This metric shows you the spread, so you know where the program stands in terms of money spent or earned, and the amount of value has been given to the members.
Take a look at these two examples:
- Payout: -$2,647 | Retail Value: $14,832
- Payout: $379 | Retail Value: $8,915
In both examples, there is a nice amount of value that is given to the members. I am sure you notice the difference between the two examples. One’s payout is -$2,647 and the others is $379. The difference is that Program 1’s goal is to generate revenue from their program, and, as a result, are being paid $2,647. And Program 2’s goal was to spend no more than $500 per month on rewards. As you can see, they were under budget by 20%.
Tip: Pay close attention to the payout and how it affects the value given to your members. You can always change the catalog mix or promotional messaging to affect the payout and the amount of value given to your members.