Glossary
What is redemption rate?
Redemption rate is how much of what you gave out actually got used. It is the most useful number in a loyalty programme, because it tells you whether people think the reward is within reach.
If you track one thing, track this.
What it tells you
Whether the finish line is reachable. A low rate almost never means customers did not want the reward; it usually means they could not get to it.
Measure it against your own history
An industry benchmark encodes somebody else’s threshold, price point and visit frequency. Your own rate before and after a change is worth far more than a number from a report.
The direction it should move
If you lower the threshold and the redemption rate does not rise, the problem was never the threshold. It is more likely nobody remembers they have a card.
Common questions
What is a good redemption rate?
It depends on your threshold and your visit frequency, so treat any single published figure with suspicion. The more useful comparison is your own rate over time, and whether it moves when you change the threshold.