You launched your loyalty program. Customers are scanning. Stamps are being given. Rewards are being claimed.
But is it actually working?
That's the question every business owner asks after a few weeks. You want to know if the program is worth the effort, if it's driving real results, or if you should change something.
The good news? You don't need complicated analytics to answer this. A few simple metrics tell you everything you need to know.
Here's what to track, how to read the numbers, and what to do with what you learn.
Why Measuring Matters
Most business owners launch a loyalty program and hope for the best. They see customers using it and assume it's working.
But hope isn't a strategy.
If you're not measuring, you're guessing. And guessing means you might be giving away rewards without seeing results, missing opportunities to improve, or running a program that's actually hurting your margins.
Measuring doesn't have to be complicated. You just need to know what to look for.
The Metrics That Actually Matter
Here are the numbers that tell you if your loyalty program is working. You don't need all of them. Start with the basics and add more as you go.
This is simple: how many customers have joined your program?
If only 10% of your customers join, the program isn't reaching people. If 80% join, you're doing something right.
Track this weekly. Is it growing? If membership stalls, you might need to promote it more or make it easier to join.
Good number: Aim for 40-60% of regular customers joining within the first month. That's a healthy adoption rate.
How often do loyalty members visit compared to non-members?
This is the whole point. If members visit more often, the program is working. If they visit the same amount, something needs to change.
Members should visit 30-50% more often than non-members. If you see that, you're on the right track.
How to calculate: Look at your data over a month. Compare average visits for members vs. non-members. The difference is your program's impact.
What percentage of members actually claim their rewards?
If people earn rewards but never claim them, they're not getting value. That means they might stop participating.
A healthy redemption rate is 60-80%. If it's lower, rewards might be too hard to claim or not valuable enough.
What to do: If redemption is low, make claiming rewards easier. Or adjust your reward structure to make it more appealing.
How long does it take customers to earn their first reward?
If it takes six months, people lose interest. If it takes two weeks, they stay engaged.
Aim for 4-8 weeks for the first reward. That's long enough to build habits, short enough to maintain motivation.
What to do: If it's taking too long, shorten the path. "Buy 8, get 1 free" works better than "Buy 20, get 1 free" for most businesses.
How much do loyalty members spend compared to non-members?
This tells you if the program is actually driving more revenue, not just more visits.
Members should spend 20-40% more per month than non-members. That's the real win.
How to calculate: Total revenue from members divided by number of members, compared to the same for non-members.
What does the program cost you, and what does it bring in?
You need to know if you're making money or losing money on the program.
The program should pay for itself. If you're giving away $100 in rewards but only seeing $80 in extra revenue, you need to adjust.
How to calculate: Cost = value of rewards given. Revenue = extra spending from members. If revenue > cost, you're winning.
How to Read Your Data
Numbers are just numbers until you know what they mean. Here's how to interpret what you're seeing.
Problem: Not enough people are joining.
- Program is too hard to find
- Staff aren't promoting it
- Reward doesn't feel valuable
- Setup is too complicated
- Make the QR code more visible
- Train staff to mention it at checkout
- Adjust the reward to be more appealing
- Simplify the sign-up process
Problem: Members visit just as often as non-members.
- Reward takes too long to earn
- Program isn't top of mind
- No urgency or motivation
- Shorten the path to reward
- Send reminders when customers are close
- Add time-based bonuses or streaks
Problem: People earn rewards but don't claim them.
- Claiming is too complicated
- Rewards aren't valuable enough
- People forget they have rewards
- Make redemption automatic or one-click
- Increase reward value
- Send reminders about earned rewards
Problem: You're giving away more than you're getting back.
- Reward value is too high
- Too many people are redeeming
- Program isn't driving extra visits
- Adjust reward structure
- Increase visits required for reward
- Focus on driving more visits before rewards
What to Do With Your Insights
Measuring is useless if you don't act on what you learn. Here's how to use your data.
Test One Change at a Time
Don't change everything at once. Pick one metric that's low, make one adjustment, and see what happens.
Example: If redemption is low, try making rewards easier to claim. Wait two weeks, check the numbers again. Did it improve? If yes, keep it. If no, try something else.
Focus on What Matters
You don't need perfect numbers on every metric. Focus on the ones that drive revenue:
- Visit frequency
- Revenue per member
- Program cost vs. revenue
If those are good, you're winning. The other metrics are nice to have, but not critical.
Review Monthly
Check your numbers once a month. That's often enough to spot trends, but not so often that you're constantly tweaking.
What to look for:
- Is membership growing?
- Are visits increasing?
- Is revenue going up?
If all three are trending up, you're on the right track.
The Simple Dashboard
You don't need a complicated dashboard. Here's what to track in a simple spreadsheet or your loyalty system:
Weekly:
Track how many people join each week
Current number of people in your program
Monthly:
How often members visit compared to non-members
Percentage of earned rewards that get claimed
Average spending of members vs. non-members
Total value of rewards given
Revenue from members minus program cost
That's it. Six numbers. If those look good, your program is working.
Red Flags to Watch For
Some numbers tell you the program needs immediate attention:
People are leaving. Find out why.
No one is claiming rewards. Something's broken.
You're losing money. Adjust immediately.
Program isn't working. Time to change strategy.
If you see any of these, don't wait. Fix it now.
The Bottom Line
Measuring loyalty program success isn't about having perfect data. It's about knowing enough to make good decisions.
Track the basics. Look for trends. Make small adjustments. That's it.
If your members visit more often and spend more money, the program is working. Everything else is just details.
The best loyalty programs are simple to use and simple to measure. If you're spending more time analyzing than acting, you're overthinking it.
Keep it simple. Track what matters. Act on what you learn. That's how you build a program that actually drives results.
Quick Measurement Checklist
Before you check your numbers, make sure you're tracking:
- Active members (weekly)
- Visit frequency (monthly)
- Redemption rate (monthly)
- Revenue per member (monthly)
- Program cost vs. revenue (monthly)
If you're tracking these five, you have everything you need to know if your program is working.