Retention of Members in a Loyalty Program

One of the important Loyalty Program metrics we look at on behalf of our clients is the customer retention rate in the program from one period to the next. One of the benefits of a loyalty program is having the ability to “see” when a customer appears to have stopped visiting your brand. It’s essential to monitor this and act quickly when things seem to be moving in the wrong direction.

With period-to-period defection intelligence in hand, the next step is to separate the controllable reasons for the apparent defection from the uncontrollable reasons. The controllable reasons are those that have to do with the customer’s recent usage and experience with your brand versus your competitors. Once you know who those customers are that appear to have defected for a controllable reason, act quickly. First, send an offer to the affected customers to attempt to reengage those customers with the brand. Second, survey those customers to gather insights that will help understand the driving force behind the defection.

This is one of the most important key performance indicators we look at with clients as part of the loyalty program “check-up” to keep programs on track and ensure that they’re affecting behavior.