Is your loyalty program actually impacting revenue?

Thanx Impact Report

There are many ways that you can measure your loyalty program. At Thanx, we believe in three key areas of focus that many legacy platforms neglect to measure. They are reach, impact and cost. In a previous post, we explained why reach and the associated metric, Capture Rate, is so vital. In this post, we will highlight impact.

When examining the importance of reach and impact on a loyalty program, it is easy to see why brands like Starbucks, Chipotle, and Panera have been so successful with their loyalty programs. Instead of just focusing on vanity metrics like check average and frequency, these loyalty powerhouses ensured the foundational framework of their loyalty programs and digital ordering experiences were designed for effortless enrollment and engagement, in order to capture as many known customers as possible.

Why is this so important? Because the more customers you are able to reach through relationships built by your loyalty program, the bigger the impact your marketing will have on overall revenue. 

Brands stuck on legacy loyalty platforms can invest in creating the most fun and interactive loyalty program in their category, but unfortunately, these investments often yield little to no improvement on the bottom line when a loyalty program lacks reach and therefore, can have little impact on revenue as a whole.

When examining impact, there are many ways you can measure and benchmark. At Thanx, we start with fundamental, yet often ignored, impact metrics by tracking customer activation, engagement, and retention. Why would loyalty platforms and restaurants neglect to measure these key areas? Because most loyalty platforms lack the capabilities necessary, such as CRM-integrated online ordering and credit card integrations, to grow these impact metrics while complex dashboards and convoluted reporting fail to make data that is available actionable to restaurant marketers. 


Having actionable data is vital to growing customer lifetime value and creating more activated customers. We define Activation based on how many new guests your program is turning into repeat customers. Measuring impact through activation tells you how effective your program is at converting newly acquired customers into engaged ones. 

This is critical because many customers naturally won’t return on their own, which means you end up paying to re-acquire them. Or if your new customers are coming back and those transactions fail to be captured, often due to gaps in digital versus in-store purchase tracking or perceived customer friction, you can end up over-discounting. For example, consider a customer who enrolls in your loyalty program through a digital purchase and then returns several times for on-premise dining. If staff forget to ask the customer if they are a program member or the customer does not identify themself, those visits might be missed. That customer may fall into a segment of customers who receive a $5 off coupon to return for a second visit even though they already have. Loyalty platforms offering credit card integrations help close the gap between digital and in-store purchase data, mitigating the over-discounting risk. 

Looking at impact in terms of how quickly you can get a customer to make a 3rd purchase is a powerful benchmark. It essentially measures how effective your marketing was in influencing a new behavior for that guest. Thanx data shows customers who get to a 3rd purchase are 10x more likely to make a subsequent purchase. 


And for those customers who do reach 3 purchases within a predetermined amount of time, their impact can then be examined in terms of continued engagement. One way to increase the impact of these super-engaged customers is through challenges. Offering an on-brand perk for achieving elevated spend or visit thresholds is how many sophisticated brands have gamified their loyalty experience. Engagement evaluates the quality of interaction between your customers and your business. 


Focusing on impact can also aid in customer retention. Loyalty programs can prevent existing customers from churning by increasing the impact of their program among these segments of at-risk customers. Tracking how many known customers continue to return month over month exposes opportunities for marketers to re-engage with potentially lapsed customers. Brands can analyze the optimum time to message these customers if the impact of the program is tracked across different stages of the customer journey.

Unlock impact optimizations by creating hypotheses and A/B testing variables such as the timing of these communications or the incentive value. Is it best to send an email after 7 or 10 days to drive a repeat visit? Does a free drink or early access to a new menu item work best to drive a subsequent purchase? Sophisticated loyalty platforms, like Thanx, can A/B/C/D multivariate test and even add a control group, giving an even more complete picture of the impact of marketing efforts within your program. For both maximum impact and ROI, create multiple touch points with a range of incentives, including non-discount rewards to avoid discount-seekers and brand erosion. Within 14 days of a visit, light touches like an email reminder to visit or redeem a reward can be effective. Alternative channels like SMS along with higher value incentives like free items or VIP parking might be required after 45 days since the last visit.

Having a loyalty platform that can measure and improve reach gives your loyalty program a huge advantage. When you can also measure the impact of that program across the customer lifecycle and scale improvements through A/B testing and marketing automation, brands of any size can achieve Starbucks-level activation, engagement, and retention. 

Want to learn more about Thanx’s impact reporting? Request a demo here.