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The 4 KPIs you Need to Track for a Successful Modern Loyalty Program

Today’s successful loyalty programs are not the same as they were even 10 years ago. Dead are the days of mass offers and earn-and-burn tactics, and here to stay are programs that span across an entire organization, that are a revenue driver for the brand.

As you modernize your loyalty program, it’s necessary to know which data points to track so you understand the impact your program is having on customers. These data points also influence any future strategies your team may make surrounding your loyalty program and its various components.

That means brands must shift away from traditional loyalty KPIs. By switching from current metrics like average basket size, which is transactional-based, to long-term strategy metrics like the ones we’ve outlined below, brands can track and make decisions based on metrics that align with a modern mindset on customer loyalty.

KPIs for Modern Loyalty Program

Customer Lifetime Value

According to today's loyalty leaders, Customer Lifetime Value (CLV) is one of the most important KPIs to track for modern loyalty programs. CLV measures how much a customer spends with your brand over their lifetime.

Monitoring CLV allows you to see the sustainable revenue your current customers are bringing to your brand, which brings predictability to the brand’s long-term revenue.

Knowing which customers are the most valuable lets you tailor offers and experiences inside your loyalty program to meet and maximize those customers' expectations and needs. Coincidentally, increasing CLV will also improve your other loyalty metrics.

Customer Retention Rate

Growing your program and acquiring new loyalty members is essential, but brands can forget how critical current members are to revenue and overall loyalty program success.

It costs 5x as much to acquire a new customer than to retain the ones you already have, and those existing customers spend 67% more on average than a new customer. Seeing an increase in your Customer Retention Rate means your current customers value your product or service. This means, it's an opportune time to convert customers into loyalty program members since they are already pleased with your brand, open to spending more, and find you valuable and relevant.

Tracking this loyalty KPI lets you see where customers might be disengaged, allowing your team to pivot and push new strategies that increase retention rates and build customer loyalty.

If you're trying to improve customer retention rates, it's important to ask yourself if the program is clearly laid out, is the program engaging, and is the program meeting my customers personal wants and needs.

Reward Redemption Rate

Knowing if your loyalty members are engaging in your program is key to understanding the value your program provides to customers. Tracking this metric shows you which benefits your members are incentivized by, and how often they’re engaging with your brand to redeem the rewards.

You can discover:

  • If members find value in your program to work towards rewards

  • If you’ve given members enough time to use their rewards

  • If you’re offering certain reward types that move the needle more than others

  • If there're pain points within your program that can be resolved in order to allow customers to redeem rewards easier- perhaps they lack value or personalization

The backbone of your loyalty program is your rewards. They can incentivize a consumer to establish a pattern of interactions with the brand and build a habit around engaging with offers and redeeming rewards. That consumer will then be more willing to store value with the brand – either by keeping money in an account available for use only at that brand’s store or by accumulating points or miles – because of that longer-term habit.

Consumers are more likely to form purchase habits with a particular brand when the rewards they receive feel incredibly relevant. The more customers engage and use, the more loyalty they build with your brand.

Member Acquisition

We're saving this KPI for last because it's important to make sure all the aspects of your program are successful before you focus on the number of new members you're bringing in.

That said, bringing in new members is clearly vital to your program's success. This loyalty program KPI shows you how many new members are joining your program and can give you an insight into how customers perceive the value of your program - is it worth joining?

Your customer loyalty program should be a focus across your entire brand. From marketing to sales and IT - don't make it hard for customers to hear about the program, and don't make it hard for them to sign up for and then engage with the program.


Tracking and reporting on what is genuinely working (or not working) can get overwhelming with the excess of data points available from the millions of customer transactions and touch points that are happening. It's important to remember that your strategy and the foundational pillars supporting the program must evolve past earn-and-burn tactics to build a successful modern loyalty program. Focusing on the KPIs above will enable you to make the right decisions for your loyalty program and turn it into a predictable, sustainable revenue driver for your brand.

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