Customer Loyalty Analytics: Your 8 Must-Measure Metrics | Blings.io
yonatan | Dec 9, 2024
yonatan | Dec 9, 2024
Unless you’re a loan provider, your customers don’t owe you anything. It’s excellent news for them and bad news for you—while they can shop around for other brands, you must go above and beyond to keep them interested in yours.
52% of customers go out of their way to buy from brands they’re loyal to. When you unlock the key to their hearts, your side of the deal does get sweeter in the form of increased revenue, lower acquisition costs, and stronger customer advocacy.
But how do you measure a sentiment towards your brand? Customer loyalty analytics will help you establish your weaknesses and strengths in nurturing customers so you can optimize your relationship-building efforts.
The Role of Customer Loyalty Analytics in Marketing Strategies
Customer loyalty is the long-term commitment existing customers have to your brand. Customers who feel your brand represents their values and aspirations tend to buy more, but you can’t get their devotion by simply having a cool brand.
Customer loyalty analytics involves gathering and analyzing various customer data, including the number and frequency of purchases and their engagement with you across digital channels. Essentially, every customer touchpoint signifies a person’s level of interest in your brand. Metrics will help your marketing team identify areas to enhance the customer experience and develop targeted campaigns for long-term engagement.
How to Accurately Measure Customer Loyalty Analytics
1. Define Your Priorities
Firstly, it’s essential to know your marketing priorities so you can choose the most relevant metrics to analyze. If the push is to drive revenue through existing customers, financial metrics give you the picture you need. To drive engagement, measuring customer interaction metrics may prove more useful.
2. Gather Customer Data
To track these metrics, you need to get all your data first. Yourautomated CRM system already stores many of these data points, such as customer purchase history and frequency of repeat purchases. However, on other occasions, you may need to approach customers directly.
For example, to calculate a Net Promoter Score, ask your customers questions such as “How likely are you to recommend us to your friends/family?” via an email with a link to the survey.
3. Track Loyalty Program-specific Data
There are several ways to track metrics for a specific loyalty program. First, if you have an app, it may integrate with your CRM system so all data (sign-ups, redemption rates, or app activity) feeds into it. You can also use platforms designed to measure loyalty program performance. Lastly, your app host may provide some valuable data.
4. Action Findings
Once you have all the data you need, it’s time to review it carefully and take action. For example, do you see plenty of loyalty app sign-ups but a low reward redemption rate? You may need to adjust your rewards system to make it easier for customers to get their rewards.
Why Customer Loyalty Analytics Give Your Business an Edge
Customer loyalty analytics give you crucial insight into your customers’ purchasing habits, preferences, and engagement with your brand. Such insight can inform strategy, marketing campaigns, and customer service efforts so you canboost product usage and drive engagement efficiently.
For example, suppose you notice your repeated customers continuously choose your almond croissant over the chocolate one. In that case, you can adjust your strategy: drive more marketing towards the chocolate croissant, improve your recipe, or remove it from the menu.
On a deeper level, these analytics enable you to understand what’s stopping your customers from bonding with your brand. Say they are subscribing but not reading your emails—embedding a personalized video can get their undivided attention, or you may need to review your tone of voice and messaging. By understanding your gaps and improving your loyalty-building activities, you can solidify customer relationships and continuously build a stronger and more stable revenue stream.
A group of brand advocates also proves invaluable in changing market conditions. 77% of consumers say they’ve remained loyal to a specific brand for ten years or more. With more players wanting to steal your customers, the more loyalty you can build in the long term, the less you worry about your competitors’ next moves.
Loyal customers can also supercharge your marketing efforts with word-of-mouth and UGC content. Genuine and unpaid endorsements reduce acquisition costs and help build trust, as user content can be more impactful than brand posts.
8 Must-Measure Customer Loyalty Analytics by Category
Financial
Financial metrics help you calculate the money you make from loyal customers, which is critical for understanding their long-term value and impact on revenue growth.
1. Customer Lifetime Value (CLV)
CLV calculates the total revenue a business expects to earn from a customer throughout their relationship with you, also called the customer lifecycle. It helps you assess the long-term value of acquiring and retaining customers. The formula to calculate it is pretty straightforward:
CLV = Average Purchase Value × Purchase Frequency × Customer Lifespan
2. Customer Retention Rate (CRR)
CRR measures the percentage of customers you can retain over a specific period, with high retention indicating stronger customer loyalty and satisfaction. The period you use to calculate this metric depends on the nature of your business and your sales cycle length, but most B2C businesses can calculate this metric quarterly, where
E = Number of customers at the end of the period N = Number of new customers acquired during the period S = Number of customers at the start of the period
Here is the formula:
CRR = [(E – N) / S] × 100
3. Repeat Purchase Rate (RPR)
RPR tells you the percentage of customers who make more than one purchase. This metric is vital to understanding the effectiveness of your customer loyalty efforts, as a low RPR suggests your customers may not be as committed and are possibly shopping around. You can calculate it using the below formula:
RPR = (Number of customers who made multiple purchases / Total number of customers) × 100
Engagement
Customer engagement analytics measure how active your customers are in interacting with your brand. They may not translate directly into revenue, but they are crucial to establishing long-term customer bonds and encouraging repeat purchases (which do impact your bottom line).
1. Net Promoter Score (NPS)
NPS measures how satisfied your customers are with your brand overall and how likely they are to recommend it (truly gauging their loyalty). Start by asking your customers to rate, on a scale of 0 to 10, how likely they are to recommend your product or service to others.
Then, based on their scores, you categorize them as promoters, passives, and detractors. You then need to calculate the percentages of promoters and detractors (ignore the passives) and subtract the percentage of detractors from the percentage of promoters. A higher NPS score indicates stronger customer loyalty and satisfaction.
CES measures your customers’ effort to solve an issue or achieve a goal when interacting with your brand (think logging in to an app or requesting a refund). With this metric, you can identify touchpoints causing friction and work to provide more seamless user experiences.
A low effort score suggests customers find it easy to do business with you, linked to higher satisfaction and loyalty. To calculate CES, you must ask your customers to rate their experience on a scale from 1 (very difficult) to 7 (very easy) and average the score.
CES = (Sum of all customer ratings / Total number of customers surveyed)
6. Online Engagement
Online engagement measures customers’ interaction and participation with your brand through digital channels such as social media, websites, and email campaigns. It includes actions like likes, shares, comments, clicks, and time spent on the site.
You can’t use a single formula because it covers many channels and types of interactions. Instead, consider your most active digital channels and use the below formula across each:
High engagement indicates a stronger connection with your audience. In contrast, low engagement may mean a disconnect between the content you’re pushing out and the values you’re conveying.
Behavioral
Behavioral metrics focus on customer actions that indicate preferences or habits, such as app logins or page views. They can reveal patterns in how customers navigate and interact with your offerings.
1. Loyalty Program Sign-ups
Tracking sign-ups is essential to gauge initial interest in your loyalty program. Results will show interest in your brand’s rewards system and the potential for long-term engagement.
Loyalty Program Sign-ups = Total number of loyalty program registrations / Total customers × 100
A high percentage of sign-ups suggests strong customer interest in building a deeper relationship with your brand.
2. Redemption Rate for Points
The redemption rate measures how often customers redeem the points they earn through your loyalty program. It reflects the effectiveness of your rewards system and how well it incentivizes engagement.
Keep Customers Engaged for a Good Time and a Long Time With Blings
Building customer loyalty requires more than great products and services—it hinges on meaningful, personalized interactions that keep customers engaged and coming back. Though this is a long-term strategy, you need real-time visibility and access to the right metrics to ensure that your efforts are relevant and your decisions are evidence-based.
Blings transforms brands’ loyalty programs with hyper-personalized, interactive video experiences. Blings’ patented MP5 technology and AI customization features enable you to create fully tailored and dynamic videos and distribute them at scale, effortlessly building one-on-one connections with thousands or millions of customers.
Blings doesn’t just foster loyalty; it measures it, too. With real-time performance tracking via a user-friendly Blings dashboard, you get instant user behavior and performance metrics (like those we discussed above) to inform your next steps.
Multinationals like MacDonald’s and Mercedes use Blings to supercharge their loyalty programs.
