Key Metrics to Track the Loyalty of Your Members

By Melania Armento

Published 28 October 2020

Nowadays, customer experiences have a massive effect on customer loyalty. The cause of that is the increasing amount of possibilities for brands to connect with their customers, which leads to expectations. Customers want to be wowed every time, and anywhere they interact with your brand.

And rightfully so, because now more than ever brands can create multiple touchpoints to interact with customers in numerous ways. A Facebook page or a fancy website can benefit your business a lot, but keep in mind that your members might expect more from you.

Therefore, try to be connected with your members at all times and make every interaction count. What do I mean with this last statement? Great question! Interaction by itself isn’t enough, I can tell you that much. Make sure that any type of contact is personal. Simply put: act human!

Be everywhere

A recent example of this development is the use of ‘Whappcare’, the corporate use of Whatsapp towards customers, which is just a new and refreshing way to connect.

It also means that a brands omnipresence gets a boost, because now there’s an umpteenth touchpoint for customers to interact with the brand. Keep an eye on the quality though, because with every touchpoint expectations arise. Customers expect nothing less than experiences that surpass those expectations. An unexpected discount, free delivery or another surprising benefit can boost the customer loyalty and ultimately their lifetime value for your business.

Companies like Nike, Zappos or KLM are aware of the importance of creating (unforgettable) experiences and lasting memories. They know that these moments (eventually) will turn into loyal customers. I hear you thinking: You can not compare Nike with my business. Actually, I can.

Creating customer experiences isn’t about money. Sure, they can come up with outrageous campaigns, knowing that their budget allows it, but it isn’t about the dollars as much as it is about the idea. An idea that you know will have a positive impact on their loyalty. No matter the size of your business, there’s plenty of small gestures you can perform – you just have to find out what triggers your members. Never advertise your gestures though. You want to keep wowing your members, right?

So, now you can immediately make the jump and start spending that money, though you’ll be taking the risk that you’ll be filling a leaking bucket. Or, you can take one step back and ask yourself: What do my customers think of my brand and what can I do to find out what they expect from it?

Quality Over Quantity

So, put that wallet back in your pocket and let me help you to understand where you stand as a brand. In order to grow your business, shouldn’t it be better to start at zero and find out how you’re performing in the loyalty department? You could send out a survey asking your members what they like and what they dislike about your business. But ask yourself this: Are these questions really going to help me improve my business?

What your goal should be is to find out what it is that drives their loyalty, how well you perform in that area and to make that quantitative. Admitted, an extensive Q&A about their likes and dislikes will provide you with great insights.

But think about it, do you really want to bore your members with an endless stream of questions? Therefore, in the past few years, some great minds have come up with clever metrics and easy-to-use tools which will set you well on your way to increasing your member’s loyalty, without coming across pushy.

Metrics Even Your Grandmother Gets

Okay, maybe not your grandmother, but take it from me: it’s hard to go wrong with these. I will discuss four different metrics that have similar characteristics and one shared goal: measuring customer loyalty. However, depending on the topic you want to address you might prefer one over the other. But we’ll get to that later.

You’ll be happy to know that the metrics have one particular thing in common: they exist out of just one survey question. So, which metrics am I talking about? Glad you asked! We will be discussing the following four:

  • Customer Satisfaction Score
  • Customer Effort Score
  • Repurchasing Intentions
  • Net Promoter Score

CSAT: Satisfying Services

Does your business has some kind of service that interacts with your member, whether that’s you by yourself or a whole department? Okay, well you might be interested in considering the Customer Satisfaction score (CSAT) as the mandatory metric for your business.

Having a good read on the overall quality of your service means you need to collect feedback in a large volume across an extended period of time. Making it easy to collect is the only way to go; the easier you make it to give feedback, the more feedback you’ll get.

What CSAT does is measure how your members rate the quality of your support, or service. The better you score, the higher the chance this might influence your customer’s loyalty positively. Easy.[1]

So what should you ask them is: “How would you rate your experience with your recent support requirement?” They can answer with either Very Unsatisfied, Unsatisfied, Neutral, Satisfied or Very Satisfied. This might relate to a query at the reception, but you could also think about applying it to a recent coaching session or group class, for example.

CES: Think Plug & Play, But Better

Earlier, we talked about creating experiences for your members. Well, it’s only fair to highlight another perspective. A few years back, Matthew Dixon published the book The Effortless Experience in which he states that experiences are only getting you so far. Instead, customer effort drives disloyalty. Dixon said that extra effort spent on delight was overrated, and that true loyalty comes from reducing customer effort.

Moments of wow” do add a bit of delight, but extra (perceived) effort severely sabotages how loyal customers are to a company. If dealing with you feels like a pain, satisfaction and loyalty take a nosedive, and no amount of delight can save you.

The CEB, a best practice insight and technology company, now recommends gauging your customer effort score by asking customers how easy they felt it was to get the answer they wanted.[2]

But if you wanted to measure effort, it’d be better to ask: “How easy was it to get the instructions for exercises?” or “How easy was it to find the exercises in our mobile app?” Very Easy, Okay, and Not Easy should work.

When a customer responds with “Not Easy,” you now have an opportunity to follow up and ask why: “Because I followed your documentation step-by-step and still had to contact you! It was incredibly confusing!” That’s feedback you can dig into and act on.

RPI: Can We Get An Encore?

Now, if you would like to know if you can count on your existing members coming back, the repurchasing intentions (RPI) metric is your weapon of choice. The RPI metric indicates the degree to which customers consider a repeat purchase. The RPI therefore say more about the financial perspectives for an organization.

You can measure the RPI by using a scale based on likelihood. “How likely is it that you will be doing a repeat purchase with organization X?” For gyms, this might better be phrased as: “How likely is it that you will continue to use our services?” An important metric since it affects, for example, a member’s decision to renew their membership. As for follow-up questions, you may want to find out the frequency of their gym visits. These insights provide you with more financial certainty in a specific period.

NPS: The Most Popular Kid In Class

The Net Promoter Score (NPS) is by far the most commonly known metric in the field of marketing. NPS is a metric that indicates the extent to which your services are worth talking about to others. In recent years, the metric gained popularity because of its simplicity and the direct link with the prediction of profitable growth. Although, you could argue that the new-kid-on-the-block RPI metric provides you with more certainty about the financial future. On the contrary, RPI is fairly new to a lot of companies. NPS is understandable to employees at all levels of an organization. The NPS is based on the basic principle that customers of organizations can be divided into three categories:

NPS

Based on one simple question – “On a scale of 0 to 10, how likely is it that you will recommend organization X’s services to family, friends or colleagues?” – these groups can be identified. The two extremes are self-explanatory, but you should pay close attention to the Passives, as they are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. It suffices to say that the Promotors are those members who drag their friends to your gym because they love it there.

Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score. NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is good, and an NPS of +50 is excellent. 3

Although NPS is very popular, it can also count on criticism. NPS would use a scale of low predictive validity, which isn’t helpful if you want predict future earnings. Others suggest that it does not add anything compared to other loyalty-related questions. Whether that’s true or not, it is a fact that companies worldwide trust NPS. It is up to you to decide if NPS provides you with enough certainty.[3]

How To Start Using These Metrics Right Away

So, which metrics should you use for your business? It’s pretty much all up to you, actually. The first thing that you have to do is define your goals. Determine what you want to know and then decide on which metric is going to help you achieve that goal. But rather than using the metric by itself, just asking one survey question, you should always try to give context to your metrics. This means you follow-up with questions to understand why members scored you a certain way. In the end, isn’t that actually what you want to know? So, let’s have a closer look at what your survey could look like.

Let’s say you’re unsure whether your members will be considering a repeat purchase in the (near) future. The repurchase intentions metric is going to help you find out whether they will be coming back or not. Is that good enough? I hope not, because you might want to know why they are coming back, or aren’t. Finally, it might be good to know when you can expect your members to be coming back because the last thing you want is a one-way ticket to Neverland.

Word-of-mouth advertising is extremely powerful, so the last thing you want is members talking trash about your brand against their colleagues, friends or family. NPS is going to help you find out what people think of your brand and if they are prepared to recommend it to their environment. But to get there, you should add some follow-up questions to get some context why they score you in a certain way, whether that’s good or bad. For example, if a customer ends up being passive, ask them what could be improved.

Improvement takes effort, which brings me to the Customer Effort Score. Do you really want to make it impossible for your members to find the FAQ on your website, or force them to fill out a whole survey to send a simple email? Great! So, it might be handy to ask them to rank the amount of effort they have to do when it comes to your brand and all that goes with it. Don’t forget to find out how you could do a better job, by following-up!

Finally, I can imagine you want to make a head start when it comes to the Customer Satisfaction Score. Rightfully so, because when it comes to your support or your service, good isn’t good enough. Try to optimize a specific interaction (support event or service) by asking your members about their satisfaction with your brand. To provide their answer with context, you might want to ask what it was that made the interaction a good or a bad experience, and maybe even ask what they expected.

So, there you go! If you know why people act and react in a certain way, you have the tools to optimize and grow your business to its full potential!

 

Melania Armento

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