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HOW TO: Create Effective Loyalty Programs with Magento Points & Rewards

Pure sales are no longer the only marketing goal for merchants, as the sales funnel starts far beyond the checkout or even pages of you site, and a low price is no longer the only incentive for customers. Brand awareness, retention of customers, and continued loyalty – these are the greatest values for sellers nowadays.

The Points & Rewards Magento extension by aheadWorks provides you great functionality to achieve the objectives mentioned above persuading customers to purchase more from you using their earned points. The universal nature of points is truly beneficial as they can be spent on any product, in contrast to free products or gifts.

Effectiveness of Customer Rewards


Create Clear and Exclusive Rewards
Reward programs and loyalty systems have passed a long way since their first implementations offline and today are used almost by each and every retailer. As the competition is great and customers usually have plentiful options to choose, the rewards you offer should not only be beneficial, but original as well.

It may come either from exclusive rewards or unique approach to offer the loyalty program. Originally designed and arranged rewards attract customers and make them feel your high-quality service and appreciative attitude.

The same time, a rewarding policy should be clear and simple without any confusing issues or potentially unfair clauses. Merchants should place their Reward System Statements in a close access for each customer and the main or a most popular landing page, perhaps, is the best location for the link to it.

Announce and Promote Your Reward Policy
Since you have an advantageous and original reward program you should promote it among your customers any way you can: on site, while customer service rendering, via emails, etc. Customers should know about it, evaluate its benefits, and get involved, which is especially required when customers just not redeem the points or coupons they already have.

Reward Consistent Loyalty
Attracting new customers is of high importance for each business and widely intensified by numerous incentives for new shoppers, but manifold studies state that existing clients are more inclined to purchase from you and worth even more attention.


Note: The possibility to sell to an existing customer is 60-70%, while to a prospect is just 5-20%. Source: Marketing Metrics


Getting Started is the Most Difficult for Customers


Shopping on a new site or entering a new reward program is always difficult for customers, and removing this psychological barrier, you are able to greatly encourage them on their way to the consistent loyalty.

According to the consumer behavior research made by professor Joseph Nunes and Xavier Dreze, people are more inclined to join your loyalty program, if they get a progress from the outset. In their research customers got two loyalty cards, which both guaranteed a free car wash as a result of eight paid ones. The first card contained eight blank slots to be stamped before getting the free service, while the second contained ten slots with two already stamped and eight blank ones. Having actually the same challenge only 19% of customers from the first group were able to feel their cards, while from the second group 34% of shoppers came to finish.

This phenomenon is explained by several findings. No need to start from scratch and having even a notionally obtained progress makes people strive harder to complete the task, while a new start is always uncomfortable.

The second finding is that people are reluctant to waste what they already have and usually try to save it.

But do not rush to give away points and discounts, or any other loyalty incentives recklessly. The same survey points out that rewards requiring efforts, but seem attainable, are motivating, while rewards acquired too easy appear gratuitous and are unsurprising.

Create Competition among Your Customers
Sometimes points have value in themselves and reflect the power of competition among customers. Even though points do not provide any purchasing power, they can represent knowledge, expertise, or other skills of the holder, which is also very important for users’ self-esteem.

Types of Reward Systems Based on Pointes


Reward Points
Reward points are the most widely used variant of a loyalty program and the most universal one applicable to any kind of business. Using points you can award customers for any useful activities on your site, including registration, newsletter signups, product reviews, polls participations, etc., and purchases, of course. Still this loyalty acquisition system can be further improved and get more value, if integrated into tire reward programs.

Tire Reward Programs
Those programs enable points to be both a single value and mean for obtaining a new status in your store. High-level customers get more and higher discounts, get primary access to limited offers, obtain free shipping options, etc. Bonuses can be infinitely different and closely meet your target shopping audience expectations.

These reward programs allow you to effectively obtain and manage customers' loyalty based on the above principles and approaches.

Points & Rewards Extension


The Points & Rewards Magento extension


But if you decided to build a reliable still flexible and sophisticated reward program you need an advanced technological solution, which would be able to implement all your ideas. The Points & Rewards extension is one of those modules combining multiple functionality features and easy integration with your Magento store.

It possesses extended reward opportunities and flexible point rules, which allow you to differentiate your rewards in various circumstances and for different customer groups.

The internal balance control and balance updates notification system make customers feel your attitude and care.

The built-in referral system allows you to reward customers for their friend invites and friends’ referral purchases.

The description of all multiple features of this extension, demo stores, relevant knowledge base articles, and the user guide of the module you will find on the product page of the extension at our store.

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