Introduction
A loyalty program isn’t just about rewarding customers. It’s about driving real business growth by increasing repurchase rates. But how do you know if your program is truly working? Measuring performance is key to optimizing your strategy, and with Stamped, you don’t have to do it alone.
Chances are, your loyalty program has room for improvement. Many top-performing brands only have about 4% of their highest impact features enabled, meaning there’s a lot of untapped opportunity.
In this post, we'll explore the critical metrics that matter—from redemption rates and repeat purchase frequency to customer lifetime value—and share proven strategies like A/B testing, analytics implementation, and customer feedback collection that can transform your loyalty program's effectiveness. Here's how you can assess and improve your loyalty program's impact.
The power of testing
A/B testing and holdout testing allow you to measure the effectiveness of different strategies within your loyalty program. A/B testing compares two variations of a program feature, such as different point structures or reward offerings, to determine which performs better. Holdout testing, on the other hand, involves withholding the loyalty program from a small segment of customers to see how they behave without incentives.
Before running any tests, strategizing is key. Here are some things you should consider:
- Define measurable objectives for your test (e.g., increase redemption rate, boost repeat purchases)
- Ensure your test groups are statistically significant—typically at least 1,000 customers per group
- Run tests for an adequate duration (usually 2-4 weeks for most retail businesses)
- Control for external variables like seasonal promotions or marketing campaigns
Keep in mind that testing isn’t just about finding data. You need to understand what strategies will actually help you improve your performance. Over the next couple of months, Stamped will release resources to help you turn your analytics into actionable insights, so stay tuned.
💡 If you want to run A/B or holdout testing for your loyalty program, reach out to us at support@stamped.io. We’ll help you through the process and ensure you get actionable insights.
Brand examples
Dr. Squatch, known for its high-quality natural soaps, wanted to improve its retention and customer engagement. By partnering with Repeat, they ran a direct mail retargeting test to determine if postcard reminders using the Replenishment Moment could drive repeat purchases. The test showed that customers who received direct mail reminders had a significantly higher reorder rate compared to those who only received digital follow-ups. This reinforced the power of combining digital and physical marketing efforts. Read more here.
PEScience, a leading sports nutrition brand, needed a way to maximize the effectiveness of its loyalty program while protecting profit margins. Working with Stamped, they switched from dollar-based discounts to percentage-based discounts and found that a shift in their reward strategy led to a 45% increase in AOV. This strategic change not only increased customer spending but also optimized their cost per acquisition, ensuring long-term profitability. Learn how they did it.
Leveraging your Loyalty Analytics
Your loyalty program generates valuable data, but are you using it to its full potential?
Stamped’s Loyalty Analytics Dashboard provides an in-depth look at how your program is performing. This powerful tool tracks key metrics such as:
- Redemption Rates: Understand how often customers are redeeming points and which rewards are the most popular.
- Repeat Purchase Frequency: Measure how effective your program is at bringing customers back.
- Customer Lifetime Value (CLV): See how loyalty members compare to non-members in terms of spending habits.
- Engagement Trends: Identify which parts of your program drive the most customer interactions.
With this data at your fingertips, you can refine your approach, test new strategies, and continuously optimize your loyalty program for maximum results.
Customer feedback
Numbers tell part of the story, but customer feedback fills in the gaps. Surveys, reviews, and engagement trends help you understand how customers perceive your program. Are they excited about rewards? Do they feel the value justifies their engagement? Stamped makes it easy to collect and analyze customer feedback so you can continuously improve.
Notably, 77% of customers view brands more favorably if they proactively seek and apply their feedback. And it’s no surprise that brands that incorporate feedback-driven optimizations see significant improvements in their repeat purchase rate.
Effective feedback collection methods
- Post-Redemption Surveys: Short, targeted questions sent immediately after a customer redeems a reward
- Sample question: "On a scale of 1-10, how satisfied were you with this reward?"
- Sample question: "How likely are you to work toward another reward in our program?"
- Loyalty Program Satisfaction Surveys: Comprehensive surveys sent quarterly to program members
- Sample question: "Which aspects of our loyalty program do you find most valuable?"
- Sample question: "What additional rewards would motivate you to engage more with our program?"
- Social Listening: Monitor mentions of your loyalty program across social media platforms to capture organic feedback
- Customer Support Analysis: Track and respond to common questions or complaints related to your loyalty program
Revamp your loyalty program with Stamped
Measuring and improving your loyalty program requires a strategic, data-driven approach. A/B testing, holdout testing, customer feedback, and analytics are all essential tools in ensuring your program drives real value for your business.
Stamped makes it easy to take the guesswork out of loyalty optimization. Whether you need to test new strategies, analyze performance, or refine your program based on customer insights, we’re here to help.
Ready to take your loyalty program to the next level? Book a demo with our team and discover how Stamped’s data-driven solutions can help you boost retention, increase AOV, and maximize customer lifetime value.
