Latest News

How to Measure the Performance of Your Customer Retention Program


Measuring the success of your customer retention program is essential to improving it. If you’re giving something away but are not seeing an increase in profits or customer loyalty, then your loyalty program may need to be adjusted.Measure Loyalty Success

Data Collection

Loyalty program software usually tracks customer behavior through a database management system, so always start there. Look at the reports to keep track of your customers’ purchases. Are customers buying more of certain products since the loyalty program was established? Are they shopping with you more often? Look through the report provided by your software to check on the percentage of return customers and overall customer satisfaction. You can also check to compare member versus non-member sales rates. Look at the revenue generated by customers who are part of your customer retention program. Then compare that to the amount of money you make from non-members. If the first group spends more money or makes purchases more frequently, then it’s easy to see the benefits of the program.

Direct Communication

Another way to check the performance of your client retention program is to evaluate the direct response you get from customers. If you’re sending out mailings in the form of coupons or discount vouchers, you should keep track of the response you get. If you’re not seeing a significant increase in sales despite the members-only special offers, you’re either not offering the right incentive or you need to adjust your marketing strategy to attract more customers to your retention program.

Retention Rate

According to the Database Marketing Institute, the customer retention rate is the single most important factor in helping determine the success of a company. Loyalty programs can help you track customer retention by checking on how long a customer has been coming to your store. Client retention programs that offer tiered rewards work the best for this. For example, a customer who shops at the store at least twice a month could unlock certain rewards that occasional shoppers don’t get. If you offer this and see a high number of “unlocks,” it means your customers are staying loyal to your product or brand. This is known as building equity and many customers appreciate it more than receiving random treats.

Participation Rate

Probably the most obvious but oft-ignored variant for measuring the success of a customer retention program is participation rate. Participation rate isn’t based on the number of people who enroll in your program – it is based on the number of people who participate in the program on a regular basis after enrolling. Most people who enroll in a customer retention program do so impulsively, so a good measure of a program’s success is looking at how many new members are active participants.


At LoyalMark, we focus on making sure your loyalty program helps your business grow. We can help you determine what your customers want and need and then benefit from their repeat business. Call us today at 1-866-233-6326 to discuss your needs or click on the chat to discuss now.

Copyright © LoyalMark 2001-2013. All Rights Reserved | Privacy Policy | View Mobile Site