Turning Customer Loyalty Into Customer Lifetime Value
It is with great pleasure that I have been asked to write a forward for this eBook by The Loyalty People and Marigold. It’s never been more critical to consider customer loyalty in a brand proposition. But, interestingly, the struggle to prove positive return on loyalty investment never really seems to get easier for loyalty professionals.
How a brand sets its loyalty KPls will obviously depend on many variants, like programme strategy and structure, company priorities and sector to name a few. First and foremost, the lifestage of the loyalty programme must be considered. If it’s a newly launched loyalty programme, customer/member acquisition will always be top of the agenda. If it’s a mature and well-established programme, more insightful KPls need to be interrogated. One of my absolute favourite KPls which shows a company’s commitment to its loyalty strategy is % of sales through the programme. If a retailer is achieving a low score of 15%, it proves that it is not taking loyalty seriously enough; loyalty is sitting low in its priorities. If the brand achieves 80% of total sales through the loyalty programme (which so many of the world’s best loyalty brands are tracking), it is evident that loyalty is front and entre in its strategy, with appropriate investment and compelling results.
Last but not least, loyalty professionals must be aware of member self-selection when gathering performance insight to prove the value of the programme. The best customers will join the loyalty programme and will skew to higher tiers or segments. The ROI calculation needs to extract incrementality rather than ACV (average customer value) metrics. I believe this is one of the most challenging proof points and yet the most important.
Good luck!
Amanda Cromhout
CEO & Founder TRUTH
”One of my absolute favourite KPls which shows a company's commitment to its loyalty strategy is % of sales through the programme.
