This article is brought to you by Stuzo.
PHILADELPHIA—Measuring how your loyalty/payments program performs goes beyond vanity metrics. “Retailers should tap into an array of key performance indicators (KPIs) when looking at how effective their programs are,” said Jake Kiser, chief customer officer for Stuzo. “All too often, convenience retailers only focus on a small set of metrics that may or may not be indicative of program success.”
What KPIs should convenience stores track? Kiser pointed out five essential metrics to help evaluate customer engagement programs—and why they matter.
New member acquisition rate. Measure the percentage of new members joining the program over a specific time, for example, per month. “This matters because retailers need consistent growth to continue increasing revenue, and if new member acquisition rates falter, they might need to tweak their marketing or onboarding efforts,” he said.
Purchase behavior. This includes the number of transactions per member, how often the member shops, and the size and makeup of the basket.
Engagement, retention and visit frequency rate. This measures how active members are with checking points balance or available offers, responding to texts and visiting your store, among other things. “Having active, engaged members typically correlates with increased visits and transaction volume, while inactive members are a leading indicator for churn,” he said.
Share of wallet and incremental wallet growth. “Grabbing a larger share of your customer’s wallet means the member is demonstrating more loyal behavior to your store,” Kiser said.
Customer lifetime value (CLV). This is a current calculation and projection of the total revenue earned from a customer over the lifetime of that customer doing business with the retailer.
“KPIs help align all stakeholders on measuring the things that matter most to the overall health of your customer engagement, loyalty and payments program,” Kiser said. “KPIs provide a blueprint for retailers to know where to invest more funds, where to sustain investments and where to decrease or stop investing.”
This is the first installment of a two-part series about how key performance indicators can help retailers increase loyalty. Click here for more information on Stuzo’s 1.5X performance guarantee for retailers who make the switch from their current loyalty/payments technology supplier to Stuzo.