Loyalty and Engagement Programs Can Be Easier to Measure Than What Drives Sales

The Master Measurement Model and EEA Enterprise Engagement Index challenge the assumption that sales efforts are inherently more measurable than other stakeholder investments.

By Bruce Bolger

Counting Sales Does Not Explain Their Causes
The Master Measurement Model Makes the Case Concrete
Focused Programs Produce Observable Responses
The Enterprise Engagement Index Connects Measurement With Financial Results

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There is an irony in how organizations evaluate engagement investments: focused customer loyalty, sales incentive and non-sales employee programs can produce more directly measurable responses than broad advertising or social media campaigns. Revenue is readily counted, but establishing what caused it is another matter.

The Master Measurement Model provides a framework for measuring performance across job functions, while the EEA Enterprise Engagement Index uses financial figures to compare organizational value creation. As investors and CFOs better understand these connections and other impact measurement tools, the discussion should shift toward improving human capital returns and employee and customer profitability sustainably.

Counting Sales Does Not Explain Their Causes

An invoice establishes that a purchase occurred. It does not establish how much credit belongs to advertising, an influencer, a salesperson, product quality, customer service or a friend’s recommendation. Even a promotional code can capture someone who already intended to buy.

This problem extends across marketing. Nielsen’s 2024 Annual Marketing Report found that only 38% of surveyed marketers, all managing budgets of at least $1 million, evaluated the combined return on traditional and digital marketing. What is more immediately measurable is the top-line result; explaining individual investments’ contributions requires additional analysis, regardless of the stakeholder involved.

The Master Measurement Model Makes the Case Concrete

A compelling response to claims that non-sales performance cannot be measured is the Master Measurement Model of Employee Performance. Developed by American Productivity & Quality Center executives Carl Thor and Don McAdams for the predecessor of the Incentive Research Foundation, it provides models for 10 occupations, including engineers, customer service representatives, accountants, nurses and hotel employees.

The framework involves employees in selecting productivity and quality measures, establishing baselines, weighting priorities and tracking changes. It explains how to translate improvements into dollar values and develop incentive budgets, while accounting for work complexity and price changes that can distort comparisons.

Non-sales work produces identifiable services and outcomes with economic consequences. Measurement requires defining them. A weighted performance score is not itself proof of program ROI; financial valuation and credible assessment of the program’s contribution remain necessary.

Focused Programs Produce Observable Responses

Customer loyalty programs can track purchase frequency, retention, referrals and contribution margin. Sales incentives can track conversion, margin and repeat business. Non-sales initiatives can track errors, rework, service resolution and implemented savings. These responses can be more directly observable than the influence of a social media impression.

Philipp Schmitt, Bernd Skiera and Christophe Van den Bulte’s “Referral Programs and Customer Value,”published in the Journal of Marketing in 2011, followed approximately 10,000 German bank customers for almost three years. Referred customers had higher retention and an average value at least 16% greater than comparable nonreferred customers. Results varied by segment, but the research measured economic value beyond the initial sale.

Similarly, Gallup’s 2024 research reports 23% higher profitability among business units in the top quartile of employee engagement than those in the bottom quartile. This association does not establish a particular recognition program’s return, but demonstrates that engagement and financial performance belong in the same analysis. Attribution requires suitable controls or comparisons, just as in marketing.

The Enterprise Engagement Index Connects Measurement With Financial Results

The EEA Enterprise Engagement Index report takes the argument to investors and management. Using companies’ own financial figures, it combines revenue and profit per employee, human capital ROI, profitability and three-year revenue growth to compare how efficiently organizations create value through employees and customer relationships.

The EEA reports that, in preliminary testing, the highest-scoring company also delivered the strongest shareholder performance in seven of 11 industries examined. Those AI-assisted findings await independent verification. The Index is an operating diagnostic, not proof that engagement caused the results or that a specific program worked.

Together, the Index and Master Measurement Model connect enterprise outcomes with measurable operating improvements. The Impact Council’s recommended metrics extend that analysis to customer profitability, lifetime value and cost to serve.

As investors and CFOs focus on these connections, engagement should increasingly be evaluated as an investment in operating performance. Sustainable gains require protecting service, quality and workforce capabilities rather than relying on understaffing or excessive discounts. For incentive, recognition and loyalty suppliers, the opportunity is to demonstrate additional financial value after costs. The measurement frameworks already exist; the challenge is applying them consistently.

Enterprise Engagement Alliance Services

Celebrating our 17^th year, the Enterprise Engagement Alliance helps organizations enhance performance through:

1. Information and marketing opportunities on stakeholder management and total rewards:

ESM Weekly on stakeholder management since 2009. Click here to subscribe; click here for media kit.
RRN Weekly on total rewards since 1996. Click here to subscribe; click here for media kit.
EEA YouTube channel on enterprise engagement, human capital, and total rewards since 2020

2. Learning: Purpose Leadership and Stakeholder

Management Academy to enhance future equity value for your organization.

3. Books on implementation: Enterprise Engagement for CEOs and Enterprise Engagement: The Roadmap.

4. Advisory services and research: Strategic guidance, learning and certification on stakeholder management, measurement, metrics, and corporate sustainability reporting.

5. Permission-based targeted business development to identify and build relationships with the people most likely to buy.

Contact: Bruce Bolger at TheICEE.org; 914-591-7600, ext. 230.