The right loyalty program for your business’ channel partners and influencers can boost the brand awareness by 71%, according to a report by Incentive Research Foundation. This goes to show how important it is to implement the right loyalty program the interests the distribution networks.
One of the best ways to track the effectiveness of any loyalty program is by tracking the loyalty program metrics. This real-time data and analytics reveal insights about the program’s performance and enhance partner engagement too.
If you are looking to implement an effective loyalty program for your business, having access to all the relevant analytics is paramount. This 1Channel guide will point out a list of the top metrics to be on the lookout for.
6 Top Loyalty Program Metrics to Keep an Eye On
If you want to keep up with the existing loyalty program or introduce changes to the existing program, being aware of the metrics is vital.
Following are some of the most important ones:
1. Partner Engagement Rate
Partner engagement is potentially the most important metric a business has to be on the lookout for. It measures the extent to which the channel partners and influencers are participating in the loyalty programs implemented by the business. From program interactions to the number of rewards claimed, this feature puts a lot of different factors into consideration.
When the loyalty program has high engagement, it indicates that the people involved in the distribution network are genuinely interested in the rewards introduced in the programs. For continued participation, a high engagement rate is quintessential since it directly impacts the sales and advocacy efforts.
The easiest way to track the engagement rate is by tracking factors like number of logins, redeeming frequency, completion of tasks, etc.
2. Redemption Rate of Rewards
The main reason why business implement loyalty programs is to keep their network feeling appreciated for their performance. One of the loyalty program KPIs to consider is the redemption rate of the rewards. How often are the channel partners and influencers “cashing” their rewards?
Not just that, you can also keep track of the specific rewards that the network is redeeming more of. This enables you to assess what kind of rewards the channel partners and influencers are more inclined towards.
When there’s a high redemption rate of the rewards, it indicates that the list of rewards that are put in place are actually valuable and worth the time for the channel partners. However, if there’s a low redemption rate, it suggests that the rewards are not appealing and it is time to make adjustments.
3. Channel Sales Lift
Every person in this world is working to reach a goal. Be it a sales target for a business or saving enough money to be able to afford a home, everyone has some kind of targets. For a business that’s implementing a loyalty program, your target is to drive sales and growth.
The best way to make that happen is by incentivising the people that are translating your services and products into successful sales. If you notice a significant lift to the channel sales, it can be directly attributed to the loyalty program. When the channel partner feels appreciated for their work, it motivates them to do more.
The easiest way to measure the channel sales lift is by calculating the pre-program and post-program sales data among participating partners. This is undoubtedly one of the most crucial loyalty program metrics to assess.
4. Reward Cost-to-Sales Ratio
While its necessary to reward sales partners, it can never be at the cost of a business’ profit margin. In short, you don’t want to reward channel partners and then accrue loses in your business due to that. So, another one of the metrics for loyalty programs to measure is the cost-to-sales ratio.
This measures the cost of rewards issued and the sales generated by partners participating in the program. By understanding how much is spent on rewards relative to the sales increase generated, companies can gauge whether their investment in the loyalty program yields a reasonable return.
If you notice a higher cost-to-sales ratio, it indicates an overspend on the rewards, which won’t be beneficial for the business in the long run.
5. Partner Retention Rate
Another key metric to consider is the loyalty program retention rate, or rather, the partner retention rate. It is simple math – “If the channel partners and influencers advocating for your business like the rewards program you have set up for them, they will most likely stay. If not, they will switch to another business.”
Retaining high-performance and loyal channel partners and influencers is beneficial for every business because it contributes to long-term growth and stability. If you see a low retention rate, it indicates that something is faulty in the reward program, especially dissatisfaction with the incentives.
So, the easiest way to assess one of these loyalty program metrics is to measure the number of partners who remain in the program month-over-month or year-over-year. This allows you to calculate how many of them stayed after the implementation of the loyalty program and for how long.
6. Time to First Redemption
This is a lot synonymous with the standard redemption rate of the rewards but a metric more refined. In this, you measure the average time it takes the channel partners and influencers in the distribution network to redeem their first reward after enrolling in the loyalty management software.
This metric indicates how quickly partners see value in the program. A shorter time to first redemption can signify that the rewards are immediately appealing and attainable, fostering early engagement and reinforcing the benefits of participation.
Access to this data also allows you to adjust the reward thresholds to keep the partners more engagement and feeling appreciated for the work they are putting into the business.
1Channel Loyalty Management Software Tracks all the Metrics
With how important loyalty program metrics is, the last thing you want is to sort out the data manually and not in real-time. If you want to simplify the task at hand and ensure that every channel partner and influencer is rewarded according to their performance, a comprehensive loyalty management platform can be the answer. 1Channel’s LMS takes care of all your data needs.
From organising and updating the channel partner and influencer KPIs to offering a simplified way to track the loyalty program metrics, 1Channel tends to all those needs.
If you are considering switching to a one-stop loyalty management solution, we are here to help. Book your free demo today.
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