What Can Loyalty Programs Learn from Baseball? How to Measure “Home Runs” and “Strikeouts”

Apr 9, 2013

Leave it to professional baseball to help metrics and data go mainstream. While all sports live and die by statistics (e.g., NCAA basketball’s March Madness), as America’s oldest professional game, baseball holds a special place. As the most stat rich sport, baseball even receives its own specialized analysis based on statistics called sabermetrics.

Yet as good as baseball statisticians are at creating a player’s data snapshot, additional information is always essential to determining where true fan loyalty comes in. Often what’s needed is more subjective.

For brands, measuring true loyalty program success should be equally nuanced – and was a topic of discussion in a recent 1to1 media article, “5 Winning Moves to Improve Loyalty Program Effectiveness,” which featured Kobie’s Vice President of Loyalty Strategy, David Andreadakis.

As the article points out, quantitative statistics are just the beginning. Increasingly, thanks to social media as well as the collection and analysis of Big Data, subjective human behaviors are being turned from qualitative musings into actionable quantitative results, yielding more relevant loyalty offerings and rewards.

Social media sites like Facebook and Twitter are particularly effective, as they provide outlets for users to vent daily frustrations or broadcast successes. Often these ups and downs include various brand interactions that speak to the brand’s success with customer engagement, driving experience and executing its loyalty program – three of what Kobie calls the “Five Es” (The others are enterprise and economics).

Just as baseball’s sabermetrics tries to derive player insight from deep-dive analytics, loyalty providers should consider measuring these additional data points:

  • What is the membership growth rate? When does membership spike or decline? Is there a time of year or holiday that sparks greatest interest?
  • Are the numbers of high-value members increasing or decreasing? Can membership levels be correlated to real-time social media commentary?
  • Have purchases changed from necessities to luxuries or vice versa?
  • Has the customer’s in-store presence dropped? This could be an early warning sign that they’re beginning to view their loyalty membership as unimportant; going through the motions for discounts and deals and not for genuine experiences.

The subtle perceptual changes loyalty program members undergo may not land on the front page of business magazines. But considering that companies spend $50 billion on loyalty programs each year, measuring those changes is vital to increase the odds of a truly great program that boosts ROI.

Has your brand made sense of its loyalty numbers? And how is your brand engaging customers differently to inspire loyalty?