A points reward system is a great way to boost sales, show appreciation to regular customers, and get them to spend more. The problem is, with all these possibilities, how do you even start?
This post will guide you through 5 easy steps to create a small company points-based incentive system.
Points reward systems have a long history as an e-commerce marketing tool. Here are four major benefits of points programs that may help your Shopify store:
According to the book Marketing Metrics, loyal customers are far more likely to buy than new ones. The conversion rate for current customers rises from 60% to 70%, while the new customer acquisition rate drops from 5% to 20%.
No doubt, loyalty boosts income. Your current customers are 50% more likely to try new products and spend 31% more each transaction.
Thus, a good points reward system leverages this customer advantage. Rewarding loyal customers reduces turnover and prevents them from transferring to competitors.
Customer loyalty increases word-of-mouth advertising by 71% when people identify with your brand. A well-designed points program can be a powerful tool for doing this. Customer satisfaction and engagement lead to brand advocacy.
By rewarding more than purchases, you encourage customers to interact with your business in various ways. This might refer to their friends, customer feedback, events, or social media followers.
Customers prefer personalized experiences, with 65% prepared to provide their information for value-added customization.
You can keep an eye on what customers do inside the program, which gives you a lot of information about their buying habits and tastes. Customer insights lets you tailor your marketing to their requirements and wants.
So, marketing that resonates with your target audience improves efficiency and profitability.
Modern points reward system is more than one-dimensional transactions. They’re dynamic ecosystems that provide incentives to increase customer engagement strategies and brand loyalty.
Take a look at Starbuck’s Reward. People who join this support group can get free food and drinks, which makes things easier. It has “double star days” to thank customers and different levels of perks. It also works with mobile apps.
Luckily, building a successful rewards program does not need you to be a giant business like Starbucks. Here are the five most important things you need to do to start a points program at your brand.
Having a purposeful, engaging, and customer-value-delivering campaign is essential if you want to stand out. Here, we’ll walk you through the five essential stages of establishing a successful points reward system in 2024.
It all starts with a well-defined goal for the points reward system. Everything from the program’s structure to its features and budget will be shaped by your mission. We should think about these two shared goals:
Depending on referral success, consider welcome rewards, referral discounts, or tiered points. Also, offer points for joining your email list, following you on social media to see behind-the-scenes material, or giving positive reviews about your customer service.
Budget: Customer acquisition cost (CAC) expects to spend more money upfront to engage these new consumers with appealing offers that stimulate their first buy.
You can provide a points program that rewards customers for spending a particular amount within a specified period.
Budget: The budget for this campaign may be more flexible since it rewards current customers.
For instance, if customers could get double points for every $50 they spend, it may encourage them to purchase more and more rapidly.
Read more: How can you boost Shopify’s customer lifetime value?
After you’ve identified your company’s goals, research your target audience:
Knowing your audience’s age, gender, geography, income, and purchasing patterns helps you design relatable incentives.
For example, millennials may choose early access to new goods above free delivery, but pensioners may favor discounts on commonly bought items.
Dig deeper than merely demographics. What drives your consumers to buy from you? Do they choose convenience and quick delivery, or are they ecologically sensitive and favor sustainable practices?
By analyzing your target population and structuring your program appropriately, you may use customer reviews to boost brand loyalty, customer lifetime value (CLTV), and sales.
The next stage is to design an enticing reward system.
Now that you know who you’re trying to reach and what you want to do with your program, you can build the incentive structure that will keep people engaged. Decide what actions earn points and what exciting rewards customers may redeem them for.
You can consider offering points for
One program that does this very well is the Love Your Body Club. Loyal customers may take advantage of a 20% discount on their next purchase for every friend who places their first transaction.
Being open and honest is vital. Establish a clear conversion rate between points earned and rewards delivered. Consider aspects such as the effort required to finish an activity and the value of the reward.
Also, set up a tiered system in which earning points grants access to lucrative prizes.
Take Sephora Beauty Insider as inspiration for creating explicit point values and tiered prizes in their loyalty programs. The program has three stages (Insider, VIB, and Rouge), each with increasing perks.
Don’t be scared to be inventive with the possibilities of your reasons. Here are a few ideas:
The next stage in ensuring that your application works properly is to confirm that you are utilizing the correct technical platform and that you are following tool instructions.
After creating an appealing incentive system, choosing the right technology platform for your points program is important. Your program will rely on this platform for point tracking, redemption, and consumer communication.
Here’s what to look for while choosing the best tool for smooth management:
For Shopify stores, we recommend the BON Loyalty – The top-recommended Shopify Loyalty App. It includes all the above capabilities and extra perks, such as limitless member awards.
This Shopify user-friendly interface loyalty app lets you monitor program success and make data-driven choices.
TRY BON LOYALTY FOR FREE NOW
Additionally, you can learn more about Shopify’s top 5 loyalty program apps.
In the following stage, we’ll look at ways to promote your program and increase consumer involvement.
Effective communication is critical for program launch and ongoing promotion, ensuring that customers grasp the benefits and participate. Using our advice, you should design clear and appealing program announcements.
Look at Flag And Anthem’s email in the image below as an example.
They highlight the program’s key advantages and how they improve the customer experience (CX). Include clear images, a call to action (CTA) encouraging users to join up, and a link to a dedicated program landing page for more information.
Be like Lifestyles PH (see the striking picture below). Use captivating pictures to draw attention and mark the start of the event. Write a short, exciting summary of the program’s benefits for people who follow it.
Also, free social media products linked to program registration should be added to get Why Points Programs Remain a Marketing Powerhousemore people involved. This gets people involved and gets people who already follow the program excited to join.
Figure out what works by looking at the ZANEROBE Crew Rewards program. A large banner announcing the program’s launch stands out on their homepage and directs visitors to the landing page for the specific program, where they can see a prominent call to action (CTA).
Integrating Points Program Information into Customer Touchpoints:
Next, we’ll cover ways to boost client engagement and sustain your rewards program.
Like any marketing strategy, your program’s success depends on tracking the correct data. Here are some important key performance indicators (KPIs) to track:
For example, if your participation rate is low. This might suggest a need for more program awareness. It’s time to change your communication approach to reach more customers with program information.
Additionally, surveys show that users need help getting points. This could mean that your point structure needs to change. Provide more points for submitting reviews or engaging on social media to help.
Tracking and analyzing your points program performance for optimal results ensures its success and long-term value for you and your customer.
Now that you have your points-based reward system in place, things are going really well. Still, how can it be made better and ensure long-term success? There are three main things you can do to keep your show interesting and your fans happy:
Customers say personalized rewards make them 80% more likely to buy from a business.
Take a second look at Starbucks Rewards as an example. It’s not a tiered structure; instead, they live on customizing things to fit the needs of each customer. People can get deals on their favorite food items by changing the app’s settings.
If you want to add more game-like elements to the reward program, here are some ideas:
See how Arirang Hibachi Steakhouse uses a points multiplier to make gamification more entertaining. Points for members are doubled every Wednesday. Effective gamification is characterized by methods like this one, which engage and excite program participants.
Work with businesses that fit the lives of your buyers. For instance, a clothes store might work with a gym or a shoe store to offer deals that go well with each other’s goods or services.
You can join large loyalty networks, combined with Coalition Loyalty or Loyalty Connect, to quickly expand your reward collection.
In today’s market, customer loyalty programs are more important than ever. A good points-based reward system could increase sales. Follow the steps in this blog to make a program that works for both you and your customer.
Are you ready to upgrade your loyalty program? If you have Shopify stores, BON Loyalty may help.
To learn how to create a loyalty program that attracts and retains customers, expands your brand’s reach, and helps it thrive in the modern market, check out our blog.
Lindsey Nguyen is a Content Marketing Specialist at BON Loyalty, specializing in digital marketing and eCommerce. At BON Loyalty, she crafts content that empowers Shopify store owners to build and sustain thriving customer relationships through innovative loyalty programs. Her articles, often featured on the BON Loyalty blog, provide valuable strategies and insights that help businesses enhance customer loyalty and increase customer lifetime value.
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