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Tracking Customer Loyalty Programs & Analyzing Results

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  • 0:03 What is a Customer…
  • 0:55 Tracking Customer…
  • 2:30 Analysis of Loyalty Programs
  • 3:31 Lesson Summary
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Lesson Transcript
Instructor: Savannah Samoszuk

Savannah has over eight years of hotel management experience and has a master's degree in leadership.

Companies have created customer loyalty programs to try to increase returning customers and profits. This lesson will take a look at tracking loyalty programs and analyzing the results.

What Is a Customer Loyalty Program?

Companies are always trying to find new ways to keep their current customers and attract new customers. What better way to do both than to offer incentives for coming back over and over again? Customer loyalty programs are programs offered by a company that rewards customers for making frequent purchases with their company. For example, Jojo's coffee shop offers a free cup of coffee to their customers after they have purchased 8 cups of coffee. This entices the customer to return to receive the reward. There are different types of customer loyalty programs that companies use. These programs can provide many benefits to the companies, but it's important to track and analyze the customer loyalty programs to see if that particular program is working for the company.

We will now take a look at different ways to track customer loyalty programs as well as analyzing the success of the program.

Tracking Customer Loyalty Programs

There are many benefits to using customer loyalty programs. However, companies need to track the program to determine if this program is working for them. The first way to track a customer loyalty program is by offering a punch card or frequency program. These types of programs offer an incentive after making a certain amount of purchases. The example of Jojo's coffee shop is an example of a frequency program. If the company is using an older punch card version, it could be hard to track the success of the program. However, with technology taking over it's much easier to track. Many companies use apps to track their customers' rewards and are able to track how many times a customer receives a reward from the program. The company can track the amount of purchases made with the program and determine if it is helping.

Companies also use points for reward programs. The company gives the customer points for purchases that they make and then they are able to use the points for prizes or discounts. For example, grocery stores have started offering points for every dollar spent. Then the customer is able to receive discounts on purchasing gas with their points. This program makes it easy for the company to track the points earned and essentially the money spent by customers.

Another way to track loyalty programs is through the use of metrics. For example, companies can track to see if customers who use the programs come more frequently than customers who do not. They can also track whether the loyalty programs have increased their overall profit, or they can track if the loyalty programs help increase the customer's overall purchase. We will now take a look at some of these metrics that are used to analyze the results of customer loyalty programs.

Analysis of Loyalty Programs

Similar to tracking the results of customer loyalty programs, it's also crucial for companies to analyze their customer loyalty programs. Not every loyalty program is the right fit for a company. This is why it's important for companies to analyze their programs to make sure it is successful. Here are a few ways to analyze the results of customer loyalty programs:

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