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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.

  1. State the goal: more frequent visits
  2. Adoption: share of customers enrolled
  3. Behavior: visits per member per month
  4. Value: spending per member versus non-members
  5. Cost: rewards redeemed and margin impact
  6. 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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