Measure for Measure - How to Refresh Your Loyalty Marketing Metrics
Ko de Ruyter, Debbie Keeling and David Cox
“Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance”, by Paul Farris, Neil Bendle, Phillip Pfeifer and David Reibstein (4th ed., Pearson Education)
As an FYI, this is not a book review. It is a reflection on the importance of keeping-up with the latest insights and being able to apply them when called upon.
Much like one of the world’s most skilful jazz musicians, alto-saxophonist Charlie Parker. As the legend goes, Parker, was famous for falling asleep during Big Band concerts. But all it took was a not-so-subtle nudge from another band member to wake him up and he would come up with the most incredible solos. This is how the mind-blowing interlude in Night-in-Tunisia was created.
Give your marketing metrics a nudge
As loyalty marketers it is hard to not fall asleep at the wheel and lose sight of the bigger picture. But if you sometimes do, be prepared to make the business case for your program when you hear the call from the C-suite. That is why we present you with a nudge - a marketing metrics refresh. One that you suddenly may need to explain that your program is still offering enough bang for the company’s buck. It is based on an interview with one of the book’s authors, David Reibstein, published by the Marketing Science Institute.
Don’t focus on fading metrics
Looking back on metrics that have been introduced in the last decade, David Reibstein concludes that the metric most commonly used by firms was customer satisfaction. However, this has been gradually replaced by measures of customer retention, repeat purchases and loyalty.
In the interview, Reibstein concludes that as far as metrics go, the well-known NPS (Net Promoter Score) is not as pervasive anymore. Similarly, the customer effort metric, or how easy it is for customers to do business with you, has lost ground.
What metrics should you focus on to track customer retention?
· Brand metrics
In addition to the financial value of brands, it is important to focus on capturing brand meaning or brand essence. There is a growing trend for brands to have a purpose, particularly around sustainability issues. As brands are a critical asset to firms, the meaning they represent to customers is going to be of interest in securing customer loyalty, according to Reibstein. At Motivforce, we acknowledge the importance of brand meaning for driving loyalty. Our programs are uniquely placed to offer channel partners the knowledge and skills in relation to, for instance, driving sustainability in distribution networks. We are helping program managers to define sustainable value propositions; we design incentive structures around sustainable services (promoting end-customers’ use of end-of-life cycle programs) and explore customer willingness to invest in environmentally friendly product lines.
· Electronic word-of-mouth metrics.
According to Reibstein, firms are zooming in on online sharing, such as retweeting, reposting and forwarding. It is all about how much content customers are sharing and how this increases the reach of brands on social media. As opposed to likes, brand shares are seen as a tangible measure of brand exposure. Shares typically have a tail and the potential to enjoy exponential exposure. At Motivforce, we work on the frontier of the knowledge base when it comes to social loyalty. Through our research, we know what type of visual elements are key to driving sharing. And through analysis of social media channels, we are able to predict what combination of textual and visual elements determine effective sharing of brand posts.
· Metrics that connect to financial value.
Metrics need to be connected to financial parameters. According to Reibstein, C-suite execs need to know how metrics on brand meaning and shares connect to performance measures, such as sales, profits and turnover. At Motivforce, we acknowledge that loyalty programs form a unique data eco-system that combines channel partner learning and attitudes with communication campaigns and sales performance, and we offer detailed benchmarks between program members and non-members.
So, while we continue to keep our eyes wide open to the latest trends in loyalty metrics that matter, you will be able to have access to remain completely up-to-date and ready to play when called upon.
