Loyalty Program ROI: Measuring What Matters
Loyalty programs are an investment. This guide covers how to measure the real return.
The core metric: incremental revenue
Loyalty member revenue minus what they would have spent anyway. This is the only metric that proves the program is generating real lift.
Repeat purchase rate
Compare loyalty members to non-members. Loyalty members should buy 30-50% more frequently.
Average order value lift
Loyalty members typically spend 10-25% more per transaction.
Retention rate
What percentage of loyalty members are still active 12 months in? Strong programs maintain 60-70% year-one retention.
Cost analysis
Total program cost (software + reward fulfillment + management) divided by incremental revenue. Healthy programs return 5-10x.
Tools to help
Social Perks reports incremental revenue, retention, and AOV lift automatically per loyalty member.
Related topics
See also: Loyalty program design, Points vs perks, Loyalty tiers, Loyalty program software comparison, Customer retention strategies.
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