The Top 5 Loyalty Program Metrics Every Ecommerce Brand Needs to Know
Aug 5, 2022

The Top 5 Loyalty Program Metrics Every Ecommerce Brand Needs to Know

Your brand’s loyalty program metrics are the best way to assess how it’s impacting your customer retention. They can highlight answers to questions like:

Is our loyalty program actually driving sales and earning us new customers?

Are shoppers eagerly signing up for and engaging with our program?

How much value are we gaining when customers redeem their rewards?

Knowing this intel will help you better tailor your loyalty program so it’s a smashing success for your bottom line and your customer engagement. 

That’s why we’re sharing the five key loyalty program metrics every brand needs to monitor and improve in this post. You’ll also learn a few loyalty program troubleshooting tips, best practices, and what our own customer data reveals on the topic.

So grab your notebook and let’s get right to it!

The Top 5 Loyalty Program Metrics To Watch & Improve

Tracking these five loyalty program metrics will help you see whether your brand’s hard work is paying off. If your loyalty program isn’t generating revenue and snatching up customers, one of these data points may help you see why.

That’s why it pays to keep your eyes on your:

1. Redemption Rate

Your redemption rate tells you how many points your customers are earning versus how many they are cashing in and redeeming.

It’s great if your customers are racking up points. But the excitement (for them) will soon fade if there’s nothing worth redeeming them for.

So if you notice customers sitting on their points, that’s a red flag that your rewards need work. We’ll show you how to address this later.

2. Participation Rate

Your participation rate tracks how appealing and engaging shoppers find your loyalty program

This metric tells you everything from how many people are signing up for your program to whether they’re referring others to do the same.

Just like with social media and email marketing, high participation rates signal healthy engagement levels between your brand and your core audience.

Low participation rates may mean you’re not showing shoppers enough value in signing up for your loyalty program. And if they don’t see the point in signing up, they won’t go out of their way to do so.

3. Customer Retention

A loyalty program is designed to foster bonds between your customers and your brand. Higher customer loyalty leads to higher customer retention rates, which should be apparent with this metric.

However, if you’re seeing just the opposite, your loyalty program needs an upgrade. You’ll need to brainstorm ways you can keep your customers happy long-term.

Consider improving your points-accumulation process, offering better rewards, giving higher discounts (only if your profit margins can support this), or a combination of those ideas.

Sometimes it takes a bit of trial and error to learn what really motivates your customers to stick around and keep spending.

4. Customer Feedback

While it’s not technically a metric, customer feedback is one of the most illuminating stats to help evaluate your loyalty program.

So what are your customers saying?

Are you receiving positive remarks? Complaints? 

No feedback?

Those answers can tell you right away how you’re doing.

Pro Tip: To snag more well-rounded feedback, send customer surveys to different segments of your audience. You may learn that things are working well for regular high-spenders, but aren’t as successful with infrequent or budget-conscious shoppers.

Try to hear everyone’s thoughts, take their feedback to heart, and come up with ways to improve your loyalty program for everyone (including your brand).

5. Repurchase Rate

A repurchase rate (or repeat purchase rate) shows how many customers placed more than one order in a given time frame.

Most loyalty programs have an expiration date on their points. This encourages customers to spend their points (i.e., make a purchase) before they lose them.

A solid loyalty program has phenomenal repurchase rates, as customers are eager to keep earning and redeeming their rewards during these windows.

So if your repurchase rate isn’t trending in a positive direction, your loyalty program could use a bit of troubleshooting and upgrading.

Loyalty Program Metrics: Troubleshooting and Best Practices

Loyalty programs can help your brand generate more sales, boost average order values, and increase its customer base. But that’s only if they’re done right.

💡 Try our Loyalty ROI Calculator to see the additional revenue a loyalty program can potentially contribute to your bottom line annually.

Use these best practices and tips to troubleshoot negative performance and get your loyalty program on the right track:

Focus On Your Brand’s Ultimate Goals

Are you hoping your loyalty program brings in more customers? Helps your brand make more money? Encourages existing customers to purchase more?

A loyalty program can accomplish all those goals and more. But you’ll need to monitor, tweak, and iterate different aspects of your program to reach those targets.

So just like you do with your social media and email marketing, you should start with a solid plan for your loyalty program that aligns with your brand’s goals and mission.

Don’t Take a Set it-and-Forget It Approach 

You should look at your loyalty program like any other form of marketing, because they’re essentially the same. And just like your marketing, it’s crucial that you track how your program is doing and make necessary tweaks if it’s not reaching the targets you set. 

That’s where your loyalty program metrics come in. Any decisions you make regarding your loyalty program should be data-driven and backed by those five metrics.

You’ll then need to continue this cycle of monitoring, iterating, and improving often (don’t worry, it’s not difficult to do) to ensure your loyalty program reaches its full revenue-generating potential. 

To sum up: You can’t put your loyalty program on complete autopilot and forget about it. What you put into your loyalty program is what you’ll get out of it.

Build Up Your Loyalty Program Over Time (& As You Capture More Data)

Don’t try to build a multi-layered loyalty program right out the gate. To build up your loyalty program over time:

Start small and simple with a referral program. Encourage your customers to share your brand with their friends and family in exchange for a discount or reward.

Once that’s off to a good start and rolling along, you can then build out a points system and eventually VIP tiers that reward your best customers.

As you tackle each phase, your goal should be to incentivize people enough to get involved and take action. So make sure doing so is worth their time.

Pay attention to user behavior in each phase so you can see if that’s actually happening.

Keep Experimenting with Your Rewards Until You Find the Sweet Spot with Customers

If you launched your loyalty program close to six months ago and you’re not seeing any action, don’t jump ship yet. Same goes if your metrics are giving off poor performance vibes. 

Turn to your rewards instead.

If people are generating points and not redeeming them, it’s a surefire sign that the rewards you’re offering aren’t valuable enough. Customers would rather hold on to their hard-earned points than “waste” them on something they’re not interested in.

Improve your rewards by offering percentage or dollar-based discounts. These tend to work well when it comes to incentivizing points redemption and repeat purchases. Check your data to discover which one performs better.

Look to your top-selling items for potential rewards. Customers may be more inclined to take action if your brand offers travel sizes of its bestsellers, add-on gifts that go with the items in their cart, or free samples.

Loyalty Program Pro Tips: What Our Own Data Revealed

After helping so many of our customers build and run successful loyalty programs, we jumped into our data to see what we could learn from our metrics. Two striking points quickly surfaced:

1. A Dollar Amount Off a Purchase Is The Most Redeemed Reward

Earning a $5 off credit for a future purchase may feel more tangible for customers. They see the money come off their bill right away, so it immediately feels like a reward. And that’s exactly what people are looking for.

2. The Most Rewarded Activity is Making a Purchase

This point also makes a ton of sense. 

No matter your goals, every brand wants customers to make a purchase. So it’s no surprise that points are typically higher to reward shoppers for doing that. Higher point values for this activity also encourage repeat purchases.

You may want to experiment with these two nuggets of intel with your own loyalty program.

Use These Loyalty Program Metrics to Your Advantage Now

We hope you have a much better understanding of which loyalty program metrics matter most for your brand. Now you know exactly which metrics to watch, plus some helpful troubleshooting tips. 

We’re confident you’ll make meaningful strides with your loyalty program once you implement these strategies. Just keep it simple, don’t think too far outside the box, and strive for continual improvement.

Before you know it, you’ll be rolling in sales, customers, and referrals.
🌟 Psst! Stamped is the reviews and loyalty platform for ecommerce. We’ll help you acquire new customers through reviews and retain those customers with a loyalty program. See why brands love our top-rated Loyalty software now!

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