Nowadays, one of the good measurements of success in e-commerce is the loyalty of your customers. I’m not saying that attracting new customers is not important anymore, far from it, but those customers who frequently come back to your store are the ones that pay you the most.

One good way to build loyalty out of your customers is to use an effective loyalty program. Our extension, Magento 2 Reward Points will help you with that.

Magento 2 Reward Points highlight features

Customizable module to set earning/spending rules
Free to reward points via a variety of customer behaviors
Allow using reward points as a payment method
Drive new traffic to Magento 2 store by reward points
Track loyalty program via advanced report

The above list is just some of the helpful features that our extension has. If you want to learn more about it, click here. Now, we’re going to talk about the benefits of a great loyalty program.

Benefits of a Loyalty Customer System

Regardless of the type of business that you’re in, a good system to create customer loyalty will surely be beneficial. That said, let’s look at some of the biggest benefits…

1. Retain existing customers

According to Invesp, the probability of selling to an existing customer is 60 – 70% while the probability of selling to a new prospect is 5-20%. A customer loyalty program is designed to encourage your customers in returning more times to do actions (purchase, sharing, refer friends, etc) which promote your business most effectively.

2. Build relationships

At the end of the day, a major part of doing business is dealing with people, building relationships. If a person doesn’t trust you, you have zero chance of him doing business with you. That’s a fact. A loyalty program can be one of the ways you can use to show that you care about your customers and they are way more than numbers on paper to you.

3. Get new customers

When your program provides great benefit to your existing customers, naturally, people will appreciate what you did for them and referring their friends to you. Not only that will raise your brand awareness, but you will also get many new customers as well. And since they already have some trust in you thanks to their friends, your existing customers, you will have a better chance of converting them into loyal customers.

4. Save money

Attracting a new customer costs five times as much as keeping an existing one. That’s a fact. So why not double down on your old customers and keep them for your business? Having a good loyalty program certain will help with that.

Loyalty Program Tips for Beginner

1. Think about your most loyal customers

There are some of your customers that are spending way more than the rest. Use your data, figuring out who they are and then design a program to keep them coming back to your store in the future. When thinking about creating a loyalty program, these are the people that you have to think about first.

2. Learn from your competition

Chances are you’re not the first one to think of creating a loyalty program, especially if the market you’re in is competitive. Don’t worry, that’s good news! Now you have the chance to learn from your competition, see what they did right, what they did wrong and do better than them.

3. Keep it simple, stupid

Even though everyone likes rewards, no one likes to go through 9 complicated steps to get his discounts. I don’t care if you have the most attractive reward on the market, if your customers are not sure how they can get it, it’s no use. So be clear about the rewards that you offer and the requirements to get them.

4. Tell customers about the program

This is such a simple thing that people might forget that they need to do it. You don’t need a big marketing campaign for this, but let your customers know that you have some gifts for them if they keep supporting your business. A beautiful notification banner and an email should do the trick.

5. Keep working on your business

In the rush of creating an attractive loyalty program, you might forget about other basics to keep your customers around. Good customer service, quality products, eager to receive feedback, those are the things that if you do them badly, no matter how good your loyalty program is, it will never work.

9 Steps to Create an Effective Customer Loyalty Program

Step 1: Define your business and customers

You can satisfy your customer’s needs by understanding what drives them. Furthermore, understanding your business to make smart decisions about your goals of customer loyalty and long-term strategy of business. First of all, every company should be fully evaluated the product. Some question as suggestions:

Is my product’s quality good enough?
Does my product have outstanding features?
Does my product have competitive advantages?

Next, study your customers. This is an essential step. Your customer’s value can be viewed as not only the value they receive from your products but also emotional payoff and achievement of a goal or desire. Analyzing customers’ data to determine purchasers who are the most valuable to their business:

The amount of money they buy in a year
Types of products they buy
How frequent purchases are
How they satisfied with your company
How you can improve your relationship with them
etc.

Step 2: Create customer segments

Assess customers’ loyal level through analyzing database like the amount of money they spend on your products or services, the number of prospects they refer to you, the length of time they’ve been with you, etc. You can identify groups of customers based on data such as:

Recency: the time between customer’s last visits and visits before that
Frequency: show how many repeat visits on your site what based on visits to our website over time, showing how many times just one visit is tracked, then two visits on the same device, then three etc.
Monetary: which customers have high spending, medium spending or low spending.

You are recommended some common analytical techniques for using in your loyalty program. They also are the most highly capable.

Additionally, your loyalty customer program can deselect unprofitable customers. While no business wants to lose customers, losing a bad one is nothing to stress about.

Step 3: Identify the goals of the program

Set your goals, then assign a real number to them. With each of your goals, you should focus on the choice of target groups. Mainly, the last purpose is to build a relationship with customers is to turn them into long-term loyal customers. Goals can be divided into core, primary and secondary loyalty program goals

For example, if your customers purchase on average 3 times per year, set a goal of 3.3 times a year, this will increase your sales by 10% without few additional expenses.

Step 4: Determine budget

The cost of your program will be different from case to case, depended on the industry, the customer structure, the competitive situation, the setup of the program, etc.

You should consider some main costs:
Technical, organization and personnel infrastructure
Program service center
Development, storage and shipping of the rewards
Communication measures
Initial development and constant improvement of the program concept

Step 5: Choose the right reward

There are many industries or customer-types in the world, which have different motivations for choosing to remain loyal to a business. Benefits aren’t benefits if your customers don’t see them by your way and they must meet the expectations of the target groups. For instance, if you’re a food online store, you might consider creating program whereby your customers have many points for each food, they can be got free shipping and free food in their birthday or big order, etc. Using your analytics to make your customers be satisfied. Some features that will set your program special:

Breadth of offering: more offer to be more effective
Focus on reward points: this is the top attractor
Exclusive sales or discounts: your customers feel that they are part of a special group.

Step 6: Prepare customer loyalty program

Research technology to choose one which allows you to extend your reach perfectly, take some time to explore the full range technology and app. Many retailers choose Reward Points extension, which is easy to use and had brought results to many customers.

Step 7: Implement the loyalty program

Set up rules and guidelines for your customer loyalty program

Rules should focus on customer’s benefit over company sales and be matched with your goals. You can use your analytics before to choose the right target customer groups for each rule in your campaign. For example, you can create a promotional campaign that: ‘Get 100 points if subtotal is $500’ during 2 weeks from 1st May to 15th May 2015.

Discount based on customer behaviors

Deliver discounts based on analyzing customer behaviors which can be purchasing habits or buying behavior. Focus on some ways that relevant to your goals. For example, you can reward 5 points instead of 3 points to encourage customer to refer friends or use social actions.

Behaviors can be registering on website, Facebook like or share, signing up newsletter, inviting friends via email, posting a new product review, sharing a referral link on a forum or blog, sharing you store with friends via social network (facebook, twitter), etc Example, if you are focusing on optimizing your site on Google (SEO, SEM), you should encourage customer to do action which is +1’s a page with Google+ by reward 10 points to this customer’s action.

Step 8: Communicate with customers

In many cases, creating opportunities to communicate is one of the main goals of a customer loyalty program because it is the key to any relationship. Be sure that your customer is easy for sharing their thoughts about your loyalty program. You can allow them to leave feedback by having a link or support email, another way that allow customers to share their feedback in a section.

Step 9: Track contributors, reward process and ROI

This step has responsibility to make sure that your process works smoothly, therefore you can achieve the maximum profitability. You will be able to adapt your program by tracking its ROI which compare the investment gain to investment cost to shows the benefits from your investment. Nurturing the communication between you and your customers by adjusting some rules of program or making special something for your customers.

Magento Loyalty Program - Magento 2 Loyalty Program Extension