- Consumer awareness of your loyalty program
- Consumer understanding of your loyalty program
- Program appeal
- Member participation
- How you compare to best-in-class retailers
How are you measuring customer loyalty?
Maybe you’re assessing whether customers have increased frequency of visits or dollars spent with you. Maybe you’re evaluating how much customer data you’re collecting. That’s all good. But if you aren’t also measuring customer engagement with your loyalty program, you aren’t getting a complete picture.
CCG’s proprietary Enrollment QuotientTM (EQ) and Active Participation QuotientTM (APQ) help fill in some important blanks. They help you understand whether customers know about your program, find it appealing enough to join and actively pursue rewards — rather than passively enjoying the benefits without altering behavior.
This kind of information can help you spot trouble brewing in your loyalty program, revitalize it and protect your margins by quantifying active member participation. These numbers provide an objective, third-party gauge that you can share with your CEO as one way to demonstrate your program’s health today and over time. That could help you win the budget to sustain or improve the program.
EQ and APQ are created from proprietary formulas developed at CCG. They are based on surveys of actual retail consumers conducted over the past two decades. We’ve used these quotients to help retailers of all sorts — from major department stores to boutique shops — improve customer engagement.
EQ and APQ are two of the loyalty program statistics that should be included as part of a loyalty program audit, effectiveness appraisal or refresh. For instance, you may notice that enrollment numbers are dropping, reward redemptions are falling off or margins are getting squeezed. Naturally, you want to know why.
EQ and APQ can help you understand where you are today on some important program aspects. If either number is low, that’s a strong signal that you need to dig deeper into that area and make some changes.
These figures also provide fuel for valuable comparisons. You can, for instance, compare your results to the perfect score, the retail norm and your competitors. You can also compare scores within your different customer segments. And you can compare to your own scores over time by repeating the calculations on an annual basis or after implementing program improvements.
Measuring Customer Engagement at Enrollment
Enrollment Quotient is a foundational metric for measuring customer engagement. Essentially, it quantifies the effectiveness of your enrollment efforts by considering people who are not members of your loyalty program and gauging their interest level in joining. The graphic below shows specific points covered when calculating a store’s EQ score.
Perfect EQ score:
Best in class:
An EQ number that is low or declines over time indicates that your program appeal at enrollment is dropping and your program isn’t as attractive to new members as it should be. This could be the result of your competition, changing customer demographics, unappealing enrollment incentives, a program value proposition that’s difficult to understand or other factors. Additional research can help determine the underlying cause and guide you toward improvements.
Measuring Customer Engagement through Active Participation
Active Participation Quotient measures customer engagement with your loyalty program based on awareness, understanding, participation and active management of their buying behavior to earn rewards and benefits from your program.
According to COLLOQUY’s annual Loyalty Census,1 an average of 54% of loyalty program members are inactive. And nearly one-third of consumers abandon a program they’ve joined without completing any form of redemption.
Yet even when program members redeem rewards, that doesn’t mean they are actively participating. Passive participants may gain rewards from your program without changing their visit or purchase behavior. In short, you reward them for actions they would take anyway and don’t reap any benefit for your company.
APQ helps you determine what portion of your existing loyalty program members are truly making behavioral changes to earn rewards. The graphic below shows the points considered when calculating a store’s APQ score.
Perfect APQ score:
Best in class:
An APQ number that is low or declines over time indicates that your program isn’t maintaining member interest. This can happen when a program gets stale and members find it boring, or when your program doesn’t keep with the times and suffers in comparison to competitor programs. It can also reflect evolving loyalty member demographics and other factors.
Measure Customer Engagement to Drive Customer Loyalty
EQ and APQ give you clear, unbiased ways to quantify and measure customer engagement with your loyalty program today, after major changes and year over year. This can set the stage for you to increase enrollment and motivate actual behavior change — leading to increased customer loyalty and profitability.
If you’re interested in learning your EQ or APQ scores, want a broader overview with a Loyalty Program Effectiveness Appraisal or desire an in-depth loyalty audit, please contact one of our retail marketing experts to get started or to learn more with a free consultation.
CCG Interactive Loyalty Assessment Tool
How does your loyalty program stack up to the competition? Spend five minutes with our interactive assessment tool to find out — and identify strengths and opportunities for improvement.