Competing on price alone or using fly-by-night sales tactics won't ensure sustainable business growth in a relationship economy. If you're one of the 82% of companies that recognises customer retention as a more cost-effective strategy, then you're likely to be considering the implementation of a customer loyalty programme. Statistically, existing customers make up 65% of a company's business – it makes sense to keep them happy.
However, as with all infrastructural investments, your customer loyalty programme software needs to yield measurable results to validate its share of the budget and demonstrate how it contributes to the organisation's ability to meet targets.
The challenge lies in understanding how the qualitative aspects of customer loyalty and satisfaction can fit into a quantitative report that outlines the programme’s ability to improve sales and retention.
The key is to take advantage of the analytics tools in your programme and understand the critical data generated from customer interactions. To help you report on the ROI from your customer loyalty software, we're going to take a look at customer satisfaction and engagement, churn rate and product knowledge. You should observe how these factors rank for customers who are enrolled in your loyalty programme and those that aren't. In this context, you can truly determine the impact of your reward programme.
There are several ways that your customer loyalty software could help you track satisfaction.
You can start by measuring the number of referrals you receive from your customers. It’s natural that a customer who is happy with your service will rave about it to their friends and family; having a platform that lets you easily introduce new people to it and captures this data is a way of proving ROI on this source.
Repeat purchases are another indicator of customer satisfaction. A returning customer should, in theory, be a person who is pleased with your product or service. Your customer loyalty software will enable you to track the frequency of transactions according to demographics or other segments of your target audience.
Having a loyalty platform that lets you gather feedback or brand interactions from your customers on it–or through integrated platforms such as social media–is another way to monitor the success of customer satisfaction. If customers are sharing your content, reviewing your products and services, or engaging in online promotions, they are your brand evangelists. The more momentum your business builds in this sphere, the higher the satisfaction level indicators.
Another method is to ask your loyalty club members straight up how they are feeling through surveys. Using a loyalty software that allows you to carry out quick polls, NPS surveys or interactive quizzes you can email to your customers and receive responses from, enables you to quantify the data and analyse if the statistics are improving.
If customers are indifferent about your brand, it means you are not conveying your brand’s story effectively enough. Customers won't engage with a business that doesn't come across as authentic or invested in prioritising their needs. And, in the current digital era, it's not too difficult to discern between who looks after their customers and who doesn't.
75% of customers prefer to shop from businesses that offer rewards. So, if you're providing customers with the opportunity to claim and redeem rewards, your software will track whether they are continuously clocking up their loyalty points and making use of the benefits. This means you can gauge which rewards are of more value to your customers and if you have a winning programme.
You can dive even deeper into reporting on engagement by studying a/b test results that show your customers' email opening and click-through rates. Other metrics, such as the number of customer logins and inactive versus active platform users, will provide even more engagement KPIs.
If there's a high cost to customer acquisition, yet you're struggling to keep new customers on board for the long haul, churn may be a particularly sore point for your business.
A high turnover of customers is a symptom of dissatisfaction. For many organisations, it's difficult to spot the causes and symptoms without a system in place to track engagement and satisfaction. If you're just looking at footfall or website traffic, you may not have the necessary insights to understand what may be putting customers off from making a long term commitment to your brand.
Customer loyalty programme software allows you to study consumer behaviour. You can investigate their purchasing habits, encourage feedback, and ask pertinent questions about what you can do to improve your service. All of these actions make a huge difference to retention.
By comparing churn rates between customers who actively use your reward system and those who don't, you can show stakeholders how the reward scheme is succeeding in winning over trust and commitment from clients.
Perhaps one of the most significant contributions that customer loyalty programme software can make to your business is the provision of invaluable information. The software should allow your sales network to refer to it as a knowledge base for products to help their training in selling to customers. Because we all know, the more knowledgeable you are as a sales rep, the more customers you are going to convert and the closer you will be to hitting your sales target.
You can use tools in the software such as eflyers to notify your sales channels of any information regarding new product launches and communicate out to those who are using the platform relevant information.
How Incentivesmart offers measurable results
At the heart of your customer loyalty programme is the commitment to better understanding your customer so that you can deliver a more personalised service. 56% of customers remain loyal to brands that put in the work to simply "get them".
Thanks to the features offered by a sophisticated customer loyalty programme software, you can customise your rewards and customer experiences through collecting valid, applicable data. This information easily converts into metrics which can be used to establish ROI and make sure that your customer retention efforts are always heading in the right direction.
With Incentivesmart, you can use our intuitive dashboard to access all the analysis tools you need to track and measure the progress of your customer loyalty efforts. You can segment customers to gain more granular insights into purchasing behaviours and pull up customised reports to share with colleagues.
The software provides excellent visuals and easy-to-understand performance charts, enabling you to set targets and interpret the monetary value that your campaigns generate. You can even conduct pilot tests which allow you to compare your metrics between participating loyalty programme members and those that haven't yet signed up.
To find out more or schedule a demo, get in touch with us today. We help businesses build stronger, mutually rewarding relationships with their customers. To start achieving tangible results, make Incentivesmart your first choice for customer loyalty programme software.