Point of View

Measuring Results of Your Loyalty Program Investment

Remember Department Store pioneer John Wanamaker's famous quotation, " I know I waste half the money I spend on advertising. The problem is I don't know which half." One of the problems with advertising is that it is difficult to measure the results beyond traditional advertising measures such as awareness and purchase intent. There is clearly a big difference between those measures and actual sales increases.

Loyalty programs on the other hand are one of the most measurable forms of marketing expenditure. However, many program managers and CFOs struggle to measure the results of a loyalty program.

"Does the program work. and is it driving sales?" "How much does the program cost?" "What's the ROI?"

While these are fundamental questions for management to ask of any program, many companies struggle to answer these questions about their loyalty programs.

Ask Yourself:
Is there a true and consolidated accounting of the cost of the program: one that includes the staff, the technology, communications and the cost of the rewards? Do we have a way to measure the incremental sales the program generates? Does the program have a P&L?

With any loyalty program, a P&L of expenses and incremental revenues can be developed.

Armed with this P&L, a Loyalty Program Manager knows if the program is working and how much money the program is dropping to the company's bottom-line. The Loyalty P&L allows a Program Manager to demonstrate that the program works, and supports an incremental budget, or if it isn't working, fix the program or shut it down.

To read the complete 5-page White Paper, simply click on the link below.

Measuring Results of Your Loyalty Program Investment
PDF File (291 KB)

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