A Reward Point System is one of the best ways for businesses to entertain their new and old customers. It not only helps you attract more new customers and provide them with strong incentives to come back to your store but also ensures thạt loyal customers feeling of being valued by your business and willing to introduce your products to their family and friends. Before building your own reward point system, you should understand clearly this system. Let’s explore everything you need to know more in this article.

What is a reward point System?

A reward point system is that your customers can earn points from various actions on your website such as create a new account, buy a product, refer a friend, write a review… everything your store needs. After reward points, your customers can exchange those points for discounts or gifts on the next purchases. 

A reward point system is often used to encourage your customers to make more purchases and engage with your store.  Some loyalty programs allow users to switch to higher membership and come with special offers when they reach a specific level. To be honest, attracting new customers is always a higher cost than retaining current ones. Creating a reward point system can be one of the most effective ways to strengthen customer loyalty. This way can retain customers and turn them into your loyal customers.

More information 6 Useful Ways to Create the Best Point Reward System for Customers

8 reasons to have at least one reward point program

#1 Retain existing customers

As above, it spends more money on acquiring new customers than retaining existing ones. Thus, it is a cost-effective choice when your store creates a reward point system to maintain relationships with current customers and encourage repeat purchases. Even if you don’t receive benefits through a reward point system that may not have any influence on the products and services they purchase from you, it still makes your customers feel like they have a strong connection to your brand and receive more value than just your products.

#2 Attract new customers

Reward Point System

A great reward point system can assist you to attract more customers. When you give your customers to earn reward points after registering their account in your store, you will have your customer's data to support future marketing campaigns. Besides, your loyal customers can be willing to refer their family and friends to your store if they are satisfied with your reward point system. According to research, over 90% of customers said that they trust the recommendation from their friends rather than advertisements.  Also, you can encourage your customer to refer by earning reward points. 

#3 Strengthen customer loyalty

One of the big benefits of a reward point system is that it can convert first-time shoppers into loyal customers. Providing reward points in your store will keep them coming back and making more purchases.  A personalized reward point system can make customers have a strong emotional connection with your brand. Thus, you should be understanding for yourself in case of mishaps. You could consider surprising gifts for special occasions such as birthdays to delight them and strengthen their loyalty to your brand.

#4 Gather valuable data

Research shows that more than half of Generation Z and Millennials consumers don’t want to publicize their information. So you can collect valuable customer data to personalize your content by encouraging them to fill in personal information as a part of your reward program. Also, those data can be used to design targeted marketing campaigns that help you deliver the right message to the right audience.

#5 Boost your revenue

Because loyal customers trust your brand name, they tend to buy more and spend more products at your store. Thus, increasing customer retention means boosting your sales. 

What’s more, you can use data gathered from the loyalty program's register steps to provide personalized product suggestions for your customers. This increases the chance they will add suggested products to their shopping cart cause those items are really close to their need and interest, generating more conversions for your store.

#6 Increase customer lifetime value

Reward Point System

Customer lifetime value is the net profit attributed to the overall relationship you maintain with a customer. Because the reward point system encourages customers to buy your product more frequently and spend more money, the lifetime value of your customers will increase. It means that you grow customer lifetime value and generate more revenue. If you can optimize your customer acquisition cost, your benefits will also witness a considerable rise accordingly.

#7 Identify the best customers of your store

A reward point program can help you capture the profile of your best customers who spend the most on your products. After identifying who they are, you can start observing their behaviors and use them for better merchandising, advertising, and customer services.

In addition, knowing your best customers allows you to create more personalized programs to express your gratefulness to them. This gives them the feeling of being a potential part of the development of your business, strengthening their loyalty towards your brand.

#8 Reduce advertising costs

 

As you know, a reward point system is a marketing tool to find out who your best customers are. You can create targeted advertising campaigns to attract more new customers whose profiles are the most similar to the profile of your best customers.  As a result, those new ones will quickly become repeat customers and build loyalty to your brand. It is clear that you can attract new customers more effectively with lower advertising costs. It saves your time and money on mediums that only bring one-time shoppers who are maybe not to make repeat purchases

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Conclusion

Creating a reward point system is one of the most important ways to build customer loyalty to your brand. This has lots of benefits for your store. Don't hesitate anymore, use our Reward Points - Multistore Marketplace Magento 2 would be a perfect choice. Let's see demo