9 Simple Steps to Making Loyalty Rewards Programs Work


Written by Sara Cabral

If you’ve already started your online store, you have probably learned that it takes some effort and money to acquire a new customer. So how does one KEEP a customer, get him or her to return often, and even better, spread the word about your store to others?

Needless to say, a customer’s experience with your store, the products you have on offer and your pricing are big factors in driving repeat purchase. But there is one more important business tactic you should have – a Customer Rewards Program.

Here are some tips on how you can implement a points-based Loyalty Rewards Program and how to make it truly effective, especially for small retailers.

1. Make it worthwhile to collect points

The points have to be redeemed for the customer to enjoy her rewards. So make it possible for her to earn enough points from two or three average value purchases to get a tangible saving on the third or fourth purchase. For a low value item 10% savings don’t work, it should be at least 20%. But for a Rs. 1000 item, a saving of Rs. 100 is sweet.

2. Make it easy to figure out the value of points earned

Keep the maths simple. Each point is worth Rs. 10, or 10 points are worth Rs. 1. Don’t have complicated formulas.

3. Offer starter points for customer registration

You want customers to register for your store for many reasons – that allows you to add them to your email mailing list, collect data on their purchases and track repeat visits.  So you can encourage them to register by offering points on registration.  It also gives them a nice balance of points right from the beginning, which will excite them to return to your site to earn more points and to redeem their points.

4. Play with the points values to drive purchases of specific products

If you want to specifically promote select merchandise, give a higher number of points as compared to similarly priced products. And don’t forget to advertise the offer, alongside the promoted product or even on your homepage.

5. Reward customers for helping promote your store

Customers who like your Facebook page or recommend your store to others are friends you don’t want to lose. So reward them for every friendly action with bonus points.

6. Have seasons or days when you run Points Multipliers

Instead of giving discounts away, give points away on special days and festivals. For example, earn 50% more points on Women’s Day and for the fortnight leading up to Deepawali.

7. Give away bonus points on special occasions

Present a customer with some bonus points on her birthday, or even on your store’s birthday. Send her a nice email on that day to announce it. The unexpectedness of such a gift usually works well to build a special bond which can lead to a repeat purchase.

8. Give your points a name that links to your store

Suppose your store is called The Baby Store and sells things for babies. You can call your points Baby Steps. So when a momma earns 10 points for her purchase she gets a message saying "Congratulations, you earned 10 Baby Steps for your last purchase!" It helps in standing out from the many loyalty programs that are running.

9. Talk about your rewards program!

Remember, the sense of reward is felt when the points are redeemed. So remind your customers that the points are there!  Notify customers who have a certain number of points by sending them reminder emails, and suggest purchases they can make using their points. Communicate when points are earned. Build it into the invoice and the confirmation email you send. Display “points earned” and “points required to purchase” on your product pages.

Using a points-based Loyalty Program is a great way to keep customers coming back to your store and to encourage behaviours you want, like member registration and more.  Think of all the places where you’re enrolled in Loyalty Programs – airlines, credit cards, supermarkets, the local coffee shop – and how it influences your purchase decisions.  If you could make your online store a place where people want to keep coming back, why wouldn’t you?

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