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The 7 Premium Loyalty Program KPIs You Need to be Measuring

Moving to a premium loyalty program can feel overwhelming. There are so many questions to consider. That’s why tracking premium loyalty program KPIs is so important.

Will my customers be receptive? How do I know if it’s working’? Is a single customer more valuable now than they were a year ago?

Is premium loyalty the right choice for me?

The answers to all these questions lie in the Key Performance Indicators (KPIs) of the program. There are seven easy metrics in three distinct groups that answer the overarching question, ‘Is my premium loyalty program successful?’

These are the metrics we look at on a regular basis for all of the premium loyalty programs we build and manage.


Premium Loyalty KPI Group 1: Acquisition

Before you can start measuring how a program affects your core business, you need customers to join the program!

Monitoring each touch point from the initial presentation of the offer all the way through a customer joining is paramount to successful optimization. There are two acquisition metrics within the funnel that are most telling to set up a successful premium loyalty program from the start.


KPI 1: Eligible Orders

How many people are seeing the offer?

The key to premium loyalty is to fill the top of the funnel, so you must make sure that as many eligible people as you have are actually seeing the offer

The more customers that see your value proposition, the more potential for maximizing joins. If the customers don’t know about the program or don’t have access to the offer, they can’t join.

Here’s everything you need to know about premium loyalty at a high level.


KPI 2: Conversion

This is the most important one, in my opinion, and it’s plain and simple. It’s the number of people who say YES!

Throughout the purchase path there are many conversions that can be measured, but overall, the most important metric is the number of people who said yes divided by the total people who saw the offer. It provides a key benchmark around how people understand the offer and are they interested!

Let’s face it. You can’t demonstrate the value of your premium loyalty program to your members if you haven’t convinced them to sign up in the first place.

That’s why it’s so important to optimize for the maximum amount of conversions. Once you do that, you’ll have members (yay!), but how do you keep them?


Premium Loyalty KPI Group 2: Persistency

Persistency, like acquisition, has many touch points to measure throughout a member lifecycle. Understanding how persistent, or ‘sticky’, your member base is allows for greater insight into success. It really tells you how long people are staying in the program.

Among the many metrics that can be analyzed throughout the persistency funnel, the two most important ones combined represent an early indicator of program health and overall member value.


KPI 3: Trial Stick Rate

This is what we refer to internally as our “early warning indicator”.

Most programs allow customers to try the program before they are ever charged, so this is an important indicator as to how long they’ll stay in the program once the trial ends.

There will be customers who change their minds and cancel before they are charged, but the number of members who ‘stick’ past the trial period is the first step to understanding overall bill rates, health of the program, and the value an individual member will generate.


KPI 4: Lifetime Value

In addition to the improvement in core metrics that a premium loyalty program can provide, there is also revenue generated which can help offset benefit costs or go right to the bottom line.

But, it’s important to understand how much each member is worth over the lifetime of his or her membership. Combining the average number of months a customer stays in the program with the cost per month provides your total lifetime value of each member.

Customers are staying in the program (yay again!) … is the program improving core metrics?


Premium Loyalty KPI Group 3: Engagement

Engagement and persistency go hand in hand.

The more members that use the program, the more value they see, and the longer they stay with the program. This cycle continues over and over creating the premium loyalty sweet spot: Value for customers AND retailers at the same time.

See how brands build emotional connections with premium loyalty.


KPI 5: Average Order Value

One of the biggest benefits of premium loyalty programs for retailers is an increase in average order value.

We’ve seen this time and time again.

When members earn rewards back to your brand for engaging with the program, it is proven that they will spend above and beyond the reward dollar amount and above a retailer’s current AOV.


KPI 6: Frequency of Purchase

Likewise, as members use the program more and generate rewards back to the brand, they are more likely to shop more frequently.

That’s why Amazon Prime members spend $600 more per year on average than non-Prime members. When a member has invested in a premium loyalty program, he or she wants to make sure they’re getting the most out of it.

By monitoring AOV and frequency of purchase of a strong active member base, the premium loyalty program’s success is confirmed.


KPI 7: Gross Merchandise Value

In addition to the revenue generated from the program, with increased AOV and frequency of purchase there is a direct correlation to an increase in gross merchandise value driven from a premium loyalty program.

Data analytics and strong, clear KPIs are at the heart of any successful premium loyalty program.

Most importantly, no one metric or category can be viewed in isolation. Each piece is tied together and results in an endless cycle of testing, analyzing, tweaking, analyzing, and testing … well you get the picture!


Premium Loyalty KPIs Prove Your Success

Answering the question, “Is my premium loyalty program successful” might seem difficult, but it all comes down to looking at these seven KPI’s.

  • Eligibility
  • Conversion
  • Trial Stick Rate
  • Lifetime Value
  • Average Order Value
  • Frequency of Purchase
  • Gross Merchandise Value

If your premium loyalty is missing the mark in any of these areas, then it’s time to re-evaluate. At the end of the day, that sweet spot is when both you and your customer are getting a lot of value out of the program.

See how a premium loyalty program can play a part in the daily lives of your customers.

If you’re offering great benefits that are easy to understand and making them very visible to your customers, the above KPIs should keep trending in the right direction.

Beth Weiner

Beth is our VP, Client Services. She focuses on ensuring the Client Services team provides excellent service while balancing the needs of clients and Clarus. In her spare time, Beth loves to cook and can be found meal prepping and making dinner in the kitchen. She has a love / hate relationship with her garden and spends all her downtime with her husband and two boys.

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ebbo™ is an all-in-one loyalty company. With our data driven strategy, full-service approach, and the unwavering support of the people behind the platform, our dedicated team will work with you to understand your loyalty goals, innovate solutions and help you build customer engagement on repeat.

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