Home Business 5 Tips on How to Implement Loyalty Reward Points for eCommerce

5 Tips on How to Implement Loyalty Reward Points for eCommerce

by Tracy Finke

As commerce seems to have its second renaissance, customer acquisition costs keep growing. It becomes a must for brands to boost customer lifetime value by any possible means.

Implementing an attractive loyalty reward points program that makes your company stand out from the crowd can become a solution. And this is more than a speculation, as according to the stats gathered by Forbes, 57% of shoppers tend to spend more with brands they feel loyal about.

This article has been designed to help you prepare for the road ahead.

Steps to set up an eCommerce loyalty program

Starting a rewards program may seem like a complicated endeavor, but it’s not. If you do not yet have any idea of what unique value you’d like to offer to your consumers, researching your competition would help prepare for the road ahead.

Now that you know what they offer and like or dislike it, you are ready to start building your brand’s loyalty points program.

1. Know your customers

Source: vezadigital.com

There’s no sense sugarcoating it. Whatever you do when running a business must be done with your customer in mind.

What values do they have? What age are they? What are their expectations?

Make a list of questions and make sure you find answers to them, and create a number of user personas you’ll be targeting with your loyalty programs.

Use Google Analytics data, hold opinion polls, or even involve some of your team members to outreach to the users of your offerings by phone and answer the questions of your interest.

What’s next?

Divide your ideal customers into groups. Create user profiles, print them and hand them over to your team members to always have in mind who they are dealing with.

Use this data when moving to the next step.

2. Compile your rewards program

Source: forbes.com

Now that you know exactly who your customers are, it’s critical to understand which rewards could incentivize them for specific activities and boost customer loyalty in the long run.

This will help you determine the type of reward system that will fit your brand the best.

Commonly, points rewards are offered as a response for the shoppers’ completing specific activities. It can be writing a review, making an order, or even as a birthday gift. Such points get awarded automatically and can be used to cover a specific percentage from the next purchase’s cost. Some merchants even let buyers cover shipping and taxes with such points.

Alternatively, there are also tier-based loyalty programs. The acquired points or the overall spend in dollars gives shoppers access to a specific tier that comes with its unique benefits. The higher the tier, the more beneficial conditions are.

These are surely not the only available types of loyalty reward points systems you can come across in eCommerce.

Besides, change is vital to succeeding today. If you already have some innovative ideas of what your brand’s loyalty program should be like, go for it!

3. Write down your metrics

Source: forbes.com

Gone are the days when decisions about the campaigns’ success were based on a gut feeling. We are living in a data-driven world, and you’ll need to come up with metrics that will be used to judge the effectiveness of an implemented rewards program.

The following metrics generally help measure how loyal your customers are:

  • Net promoter score
  • Repurchase ratio
  • Customer lifetime value
  • Customer loyalty index
  • Customer engagement score

Nonetheless, you are the one to decide which metrics your team should rely on when reporting on the effectiveness of an introduced program.

4. Decide on your budget

Source: corporatefinanceinstitute.com

Make sure you have a budget to launch and run your rewards program.

Investment might be required already at the stage of implementing such a program, as some commerce platforms are missing out on the functionality to launch one.

Besides, make sure to calculate and allocate your budget accordingly.

How are you planning to communicate info about the program’s benefits to your audience? Will it require extra spending?

5. Evaluate and adjust

Source: eda.europa.eu

Don’t fear Amazon!

Joking aside, it’s okay to make mistakes. It’s not okay to ignore them.

You know the metrics. You see the reports and the outcomes.

If you feel like you are not making the most out of your loyalty reward points program, then it’s time to study it once again, find the pain points, and make improvements.

Even if you are happy with your program, consider reviewing it every, say, six months. Customers’ expectations evolve continuously; so should your loyalty program.


If you seek new ways to build a community around your business, a thought-out reward points program can assist. Besides, such programs help improve customer retention, loyalty and even make sure your regulars do not go over to the competition.

The five basic steps described in this article will help you launch and run a program that resonates positively with your customer base.

The only thing left to do is to make sure your platform supports the required functionality. Otherwise, there is must be an app, extension (like the Reward Points extension from Mageworx), or plugin to help you integrate the missing features.