For every online store, fascinating customers is a crucial mission which helps them to pursue the ultimate profit target.
A customer who shops at a store; then, is offered an adorable benefit for later purchases can be willing to come back. This customer might continue contributing to the revenues of that store.
As a store owner or marketer, how can you motivate that to happen?
The answer is creating an effective “loyalty program,” like a reward point strategy, for example.
This term might not be unfamiliar to many people. It means a marketing strategy designed by you, a merchant, to stimulate shoppers to consume your products and services.
Some of the incentives may include advanced access to new products, additional discounts, or sometimes free merchandise. Customers register their personal information with a company and receive a unique identifier, such as a numerical ID, and use that identifier to make purchases.
I – Why Does Your Store Need a Reward Point Strategy?
Reward Point Strategy is the most common loyalty program usually applied in many e-commerce stores. It encourages customers to “spend more to get more.”
To perform a reward point program, you give customers points on their actions such as creating an account, ordering, submitting reviews, referring your business, etc.
Of course, those actions are defined to generate more orders.
For example, every dollar spent earns shoppers five points. They can use those reward points on later purchases to exchange for a discount or get promotions.
So, why is a reward points strategy necessary in every store?
First, you might be surprised to know:
- 80% of your revenue comes from your repeat customers
- The cost to take care of a repeat customer occupies only 20% percent of the cost to attain a prospective customer
A reward point strategy builds up and nurtures customers’ loyalty.
Second, once you implement a reward point strategy, you are more likely to increase the likelihood of shopping at your store inside customers. Reward points help you to delight customers when they spend their money on your products. As a result, it makes them more satisfied with the shopping experience.
Finally, a reward points program is simple to understand and easy to maintain. It helps customers see their benefits immediately after having actions specified by you without waiting.
If you have already created a reward point program, that’s good! You have appreciated its importance in the development of your business.
However, are you sure your program works effectively?
An ideal reward points strategy should help you minimize the liability of the program but still be attractive enough. Not only retain old customers, but it also can engage prospects as well.
Let BSS Commerce introduce seven reward point strategies to build up a successful loyalty program.
II – 7+ Fascinating Reward Point Strategies to Boost Your Sales
#1. Set up a validity period for reward points
Setting up a fixed amount of time that reward points are valid and applicable is necessary. Not only give customers points, but you also need to offer a condition. Why? Because those points only make sense if they motivate customers to come back to your store soon. An expiry date can urge purchases to happen sooner.
For example, points are valid within six months from the date they earned. Consumers in each industry have different shopping habits. Thus, they have different shopping frequency. You should understand your customers to set up a suitable validity period for reward points.
Remember that never give anything to customers unconditionally. You give away to receive back.
#2. Redeem points for coupon codes
This is an attractive strategy that cannot be ignored. In which, you can redeem points and convert those into coupon codes. Whenever points of customers reach a threshold, they can use those to create a relevant code. Of course, this code must be expirable.
To be clearer, if you set up 1000 points to be redeemed into a $35 coupon. It means when a customer accumulates enough 1000 points, they receive a $35 coupon code for the next in-store purchase.
#3. Create a tiered program
In this strategy, you classify your customers into different levels or types based on points earned. Each type (tier) has special privileges for shopping at your store. Tier programs are commonly realized at banks, hotels, and many services.
Look at the example below. Shoppers are classified into three levels. Shoppers at higher levels get more privileges with bigger discounts on birthday and anniversary. Reward points are valid within twelve months, which simultaneously stimulate shoppers to spend more and reduce the liability of the store owner.
An outstanding advantage of this program is giving customers a sense of belonging when they reach a tier.
#4. Exchange points for products
This strategy allows customers to exchange their points for a product.
In many cases, the exchanged product is usually highly perceived. For example, customers can use 5000 points to receive a product at $500, but the actual cost is only $300. Thanks to it, store owners still ensure an expected profit.
Besides, this strategy is also suitable to apply to promote consuming some products at the end of their season. You can offer customers to exchange for those, which benefits both two sides.
#5. Exchange points for sweepstakes entries
How to create a fascinating reward points program?
Try this strategy right now. Instead of using coupon codes, giving them a sweepstakes entry might make them more excited. It allows customers to buy sweepstakes entries by their points at any quantities they want.
Why? Many people love waiting for surprising things to happen and hope for luck. Let’s interest them with adorable presents for which they have an opportunity to obtain. In this way, you can effectively reduce the liability without offering a substantial cash value per point.
#6. Redeem points for a credit
Besides coupon codes and products, you can allow customers to exchange points for a credit. It offers customers the ability to pay for a part or all of their purchases with reward points. This program helps them save money and make the most of their rewards.
#7. Hybrid reward points strategy
A hybrid strategy is a combination of multiple individuals. If necessary, let’s use two or even three out of six options above at suitable periods. However, never layer so many strategies as it can complicate your reward system and management tasks.
One more note, components of the combination cannot affect the effectiveness of each other.
In business practice, online stores usually design their reward points program flexibly for different contexts of the market. It can be affected by actions from competitors and competing trends, for example.
Case study: Google’s Play points program rewards
We are going to show you a case study with Google to explore how they designed a loyalty program to entice people to download more paid apps.
Nobody is unfamiliar with Google Play Store. The business owns a vast number of apps downloaded every year. For Android users, can you count how many times you have downloaded an application from there?
Google is bringing its Play Store rewards program to the U.S. after its first launch in Japan last year. In this program, customers have a free chance to earn rewards when they use the company’s digital marketplace.
By purchasing any apps in the Play Store, including in-app purchases and subscriptions, you will get points. The program allows you to redeem those for Play Store credit, in addition to in-app purchases, which might make that secret Candy Crush Saga addiction a tad more affordable. Finally, you can donate the points to a variety of nonprofits.
The more dollars you spend, the closer you get to a higher reward tier. Each one among four tiers has its own perks. Customers in a higher tier receive more points per dollar spent than in the previous category.
For example, individuals in the premium tier get 1,4 points per dollar. However, those who belong to the bronze tier get only 1 point.
Do you like this loyalty program of Google Play Store?
III – Rewards Points Magento Tool by BSS Commerce
#1. What is Reward Points Magento?
Understanding the importance of loyalty programs to stores, BSS Commerce has launched Reward Points Magento Extension. The module, also known as Magento Customer Rewards, helps online stores build up a Magento 2 loyalty program with ease.
By installing this module, the admin (store owner) can
- Reward customers for several actions such as signing in, creating an account, placing orders, submitting reviews, etc.
- Allow them to use those points to pay for orders
- Set up an expiry period for reward points
- Refund customers with points
- Add or subtract reward points manually from the backend to customer accounts
- Send emails to customers to inform the expiry date of reward points
- Import/export reward points and transactions
Covering those outstanding features, Reward Points Magento Extension by BSS Commerce has received positive comments from users for the quality and support.
Keep reading this blog to understand why it’s been highly appreciated.
#2. 5+ Benefits of Reward Points Magento by BSS Commerce
Delight customers by reward points
When you give points to customers for their actions in your favor, they can feel appreciated by you. It makes them find it worth the money and more satisfied with the shopping experience.
With Magento Customer Rewards, you own a tool to do that in these cases by setting up earning rules:
- Customers create an order
- Sustainable quantity purchases
- Customers sign up
- Customers place their first order
- Customers submit their reviews
- Customers subscribe for newsletters
- On their birthday
Engage customers and stimulate their interaction
Reward points will be wasted if not used. Once customers get points, there is an invisible thing appealing to them to turn back. Many customers might consider those as the property that they have accumulated on the money spent. Therefore, they will more likely continue to enrich and exploit this property.
That is the way Magento Customer Rewards stimulate your customers. It allows you to treat them better in each step of their journey in your store. As a result, you can encourage their interaction, which helps generate more valuable leads and develop a rich customer database.
A store that maintains a high interaction of customers is usually a trustworthy place for shopping. Both you and your customers believe that, right?
Urge purchases to take place sooner
Don’t forget you can set up an expiry period for reward points in Magento Customer Rewards. It means customers can use their points within this validity period, no more. To make use of all points, they have to turn back to your store shopping during that period.
Thanks to the config “Expiry period’, it’s easy to urge purchases to take place sooner than the natural frequency. The module includes functions that help you follow the rule to reduce the liability but still optimize your loyalty program.
To notify expiry dates of points, Reward Points Magento supports email notifications sent to customers. No longer worry about whether they can miss the dates.
Keep money stay at your store
As a store owner, you surely don’t want the revenue from an order to be blown away. Reward Points Magento helps you keep money stay at your store by refunding customers with points.
In this smart way, you give customers a reason to create later orders using refunded points. You can simultaneously maintain a smooth cash flow for your store and trigger further orders.
Easily track Magento 2 loyalty points information
How can your customers track their points?
Magento Customer Rewards provides you with many options to display reward points in the frontend. Customers can update and track reward information comfortably in one place, such as balance information, exchange rate, transactions.
IV – Conclusion
If you still read the blog, you might have understood seven reward points strategies clear. It’s time to practice with your store. Let’s try with the one appropriate with your business and seek a tool to support you.
Magento 2 Reward Point extension, for example, is a useful tool that we have already explored.
Besides, you can combine with other tools such as Magento 2 Admin Product Grid With Category to optimize your management tasks in the backend.
A right strategy with proper implementation will take you a significant step to success.
If interested, have a look at our collection of Magento 2 Administrator extensions for another surprise.