For most retailers with some form of recognition and reward program in place, daily, weekly and monthly reporting on program performance is enough to know whether the program is driving successfully business metrics – as defined by pre-established measures or Key Performance Indicators (KPIs). A quarterly audit with your service providers is also highly recommended to assess how well you are doing to support program objectives, identify areas for improvement and determine what the near-term priorities are in order to meet/exceed commitments to the enterprise in terms of delivering incremental return from your most valued customers. 

To help facilitate that dialogue, here is a Q&A. It is certainly not exhaustive, but if you haven’t performed a formal audit since you launched the program or had working sessions with your service providers – agency, strategic advisors, technology platform, data management or CRM platform teams – you owe it to yourself to do so now. 

Program KPI Status 

• Enrollment as a % of foot traffic
• Enrollment as a % of conversion – paid transactions
• Active members past 3, 6, 9 and 12 months
• Member lifetime value – increasing, decreasing
• Member value profile – how are the deciles performing?
• Incremental sales lift from promotions, from the program overall – meeting or exceeding plan
• Reward redemption rate and the characteristics of the reward transaction
• Any changes you’ve noticed in your e-mail delivery and open rates?
• Are you meeting your goals/objectives based on web analytics and social measurements from your investment in SEO, SEM and Social Sites?

Senior Management 

• What are their questions/concerns/initiatives that may impact the program
• Who is the biggest advocate for your program at the company? Why?
• Who is the biggest detractor/negative influence on the program? Why?
• What is senior management focused on these days (generally and loyalty-specific)?
• What does the program Operating Committee or Advisory Board think of the program’s performance to-date? 

Program Management – 360 Degree Assessment

• Forget about internal thoughts about the program. What is keeping you at night? What is needed to address/solve for those problems/issues and how can you best source solutions now vs. continuing to “kick the can” down the road?
• Where is the biggest gap right now in your resources model? What would you like to get done that you just can’t seem to get to?
• Have you taken a look lately at your program proforma? How is the program performing vs. your measurable/defined objectives? Where is your greatest strength at present? Biggest weakness? Biggest surprise? 
• Based on ROI projections for the calendar year, are you going to meet goals on incremental lift? EBITDA contribution?
• Do you have enough resources to support your business needs? Where are the weaknesses in your support model? Are you getting enough analytical support? Is your data delivery success acceptable? 

Loyalty Vision

• What’s on the horizon for loyalty next month? Next quarter? Next year? 
• Are you looking for best practices and “what’s new” to assist with your plans?
• Is there benefit in reaching out to non-competing companies to learn from them to inform plans, strategies and tactics for the coming quarter or year?
• Competitive review – What are your direct competitors doing right and wrong? Any threats? Have you noticed something from the competition, either in offers or communications or ways they are merchandising in-store or online that has surprised you?

Loyalty Offers 

• What is working and not working?
• Are testing methodologies still valid and reliable?
• Is incremental lift from offers meeting goals/objectives?
• Member profile differences – who is or is not responding?
• Triggers? Inactives? Bonus Tied to Rewards? 

Loyalty Benefits

• Is it time to review or refresh? 
• What about a social program as a complement to the existing design?
• What about member tiers – need to re-fresh benefit structures?
• Need to add tiers – make them private or public?
• What changes have you seen in terms of credit card performance and how might that be influencing your rewards program? 
• Have you seen a downturn in use of your proprietary credit card? Do you think that the program running off the credit back-end is slowing down in terms of delivering incremental return? Are you considering a tender neutral program? What timeframe? 
• Is it time to do research and create new benchmarks in satisfaction, learn of member attitudes, understanding and advocacy for the program? When was the last time you fielded focus groups, store intercepts or an online study?

Loyalty Communications

• Any new components or features in-store or online to be considered that the program can leverage? 
• Lifecycle driven communications?
• New content and from where it is sourced?
• Level of relevance/degree of personalization is this being optimized? If not, what can be done about it?
• Coordinated with brand/non-loyalty communications?

Loyalty Technology

• How are vendor solutions performing against SLAs?
• Where are the gaps in feature/functionality?
• What is on their proactive roadmap and what implications are there for your internal resources if you migrated to the updated platform and took on these enhancements?

Customer Insights/Merchandising

• Which customers are actively participating? Redeeming? Increasing spend, etc.?
• How has marketing used these insights?
• Is Merchandising Planning and Analysis using customer insights effectively?
• How is the rest of the company using insights? 
• How has your latest floor set performed vs. plan?
• What areas of the store are under- or over-performing?

Customer Data/Loss Prevention

• Issues with data hygiene? Data management?
• Issues with undeliverable email?
• Issues with opt-outs in Mobile?
• Issues with duplicates on the database?
• Issues with “gaming” the program?

By conducting a thorough examination today, you can absolutely expect to achieve better results in the next year. In addition, you can count on fewer sleepless nights worrying about problems/issues and not having a plan to solve for them.

Posted by David Slavick, Co-founder & Partner at Ascendant Loyalty Marketing. For assistance in conducting a loyalty program audit, please contact us at Ascendant Loyalty.