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How would you measure the success of a loyalty program in a coffee chain's app?
How to approach it
Ask what the program should change: more visits per customer, bigger orders, or keeping customers from going to competitors.
How a strong answer opens
“I'd like to know what the program should change: more visits, bigger orders, or keeping customers from going elsewhere. I'll assume more frequent visits.”
Outline of a strong answer
Try answering out loud for a few minutes before you open this.
- State the goal: more frequent visits
- Adoption: share of customers enrolled
- Behavior: visits per member per month
- Value: spending per member versus non-members
- Cost: rewards redeemed and margin impact
- Pick a headline metric and test design
Where this question usually goes wrong
Comparing members with non-members and calling the gap the program's effect, when loyal customers were the most likely to join anyway.
Learn the method
Metric trees: breaking a goal into parts in Module 2, Metrics and execution.
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