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8 Keys to Build A Successful Rewards Program that Appeals to Everyone


8 Keys to Build A Successful Rewards Program that Appeals to Everyone

The ecommerce world has become more data driven than ever as merchants gather as much information as possible about their customers.

Stores are constantly looking to learn something new about their customers to help get them ahead of the competition. Their research helps them target customers better based on their location, hobbies, purchasing habits and more.

While the data merchants look at often follows trends they can act on, most merchants will come to the realization that their customers are extremely diverse. In the ecommerce world, regardless of industry, stores attract people from all walks of life. Customers have different budgets, passions, and tastes. In order to build a successful rewards program, you'll want to accommodate ALL of your customers.

Understandably, not every customer will be motivated by the same thing, and so one of the biggest challenges in implementing a rewards program is deciding which rewards to offer.

What approach will be most effective at getting the highest percentage of your customers excited and eager to participate? Most importantly, which strategy will produce the greatest ROI?

We've compiled 8 tips that will help you answer those questions and set you up to build a successful rewards program that effectively appeals to all of your customers.

1. Identify your store's goals

Here's where we make sure to cover the basics. To determine the answers to the questions we outlined above, the first step is identifying your specific business goals. Loyalty programs can be powerful motivators for driving a number of actions. For instance, you can use an incentive program to:

  • Get more signups for your email newsletter
  • Increase store account signups
  • Encourage repeat business
  • Gain more social media followers
  • Gather more customer referrals
  • Get more positive product reviews
  • Increase social media engagement
  • Promote content readership and social sharing

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Once you’ve figured out which of these goals (likely several, if not all) you are hoping to achieve, you can then focus on developing a rewards program that will effectively get you to those goals. After establishing that your program meets your needs, you can go ahead and modify it to meet the needs of all your customers. 

2. Figure out what you’re comfortable giving away

There are plenty of options for rewarding customer loyalty and behavior. For instance, you could offer points that can be collected and cashed in as discounts for your products or services. Or, you could provide direct discounts (either $ or % off) on future purchases.

Giving away something free is also an option, and it doesn’t have to cost you too much if you’re strategic about it. For example, a store owner may decide to reward a customer who has made 5 purchases with a free t-shirt. The cost of that t-shirt to the store may be $1.50 but to the customer the value of the t-shirt is $10.00. In the end, both parties end up satisfied.

3. Think long-term

The goal of most rewards programs is to drive ongoing, repeat business and, of course, gain new customers as well.

The best way to achieve this goal is by establishing a long-term program that doesn’t give away too much too soon. For example, offering a particularly enticing reward only after a high number of visits or dollar amount spent can help keep your loyal customers coming back again and again.

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Points offered for referrals can and should be higher because they bring in new business, which saves you the time and effort of finding those new customers on their own. Customer acquisition is in fact one of the largest costs to ecommerce stores and so you should thank customers who bring in new business accordingly.

Customers who are brought to stores via referrals are also likely to have a much higher lifetime value than your average customers. 

4. Offer different prizes at varying price points

Rather than offering one reward, consider extending that reward to include several different options at various price points.

For example, redeem 25 points to earn a 5% off coupon

Redeem 50 to get a 10% off coupon.

Redeem 100 and get a 15% off coupon.

Image via Obviously Chic

This gives the customer more control while also driving repeat business. It also helps appeal to your entire customer base because each individual gets to choose their preferred reward.

Spenders will cash in early while savers will aspire for that top prize.

5. Understand what really matters to your customers

A rewards program isn’t worth much of anything if people aren’t excited about participating.

To that end, incentives should be in line with what your ideal customer wants or needs. For instance, things like discounts, samples and free shipping are all real-world rewards that not only please your customers, but also drive future purchases.

By making the right compensation an option, everyone wins.

6. Make customers feel important and special

There’s something psychological about being called a VIP or being part of an exclusive group.

Image via Kopari Beauty

Making your customers feel important by offering them exclusive rewards based on their loyalty can do wonders for repeat sales. It also solidifies the relationship between your brand and your best clientele. When people feel like they’re getting something special in return for doing business with you, they’ll respond by rewarding you with their continued patronage.

The easiest way to convey this to your customers is through your messaging. The more excited about your rewards you are in your messages, the more excited your customers will be and the more excited they'll be to work towards more rewards in the future.

Bright colors, imagery and exclamation points can go a long way to making your messaging engaging. Check out these examples from Tyra.com!

Image via Tyra Beauty Image via Tyra Beauty

Image via Tyra Beauty Image via Tyra Beauty

7. Focus on engagement

As mentioned, the true success of a rewards program should be measured in terms of participation. If nobody is redeeming your incentives, you’re missing the mark and it’s probably time to make some adjustments. A good way to measure this is by using the Swell Dashboard to look at the percentage of points redeemed as a fraction of points earned. If it's less than 3%, it may be worth looking at in more detail. 

Try and find out what customers aren't responding to. Reach out to your customers to learn more about how you can improve your program and identify changes you can make that'll get them interested in being loyal and active members.

8. Adopt a multi-faceted approach

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Remember that your loyalty program doesn’t have to be one reward or another.

It’s entirely possible – in fact, it’s highly recommended – that incentive programs are comprehensive and include a variety of different rewards options as well as various ways to participate.

When you expand your horizons to create a multi-faceted approach, you’ll have a much better chance of reaching all of your customers and providing incentives that include something for everyone.

To learn more about how our platform can help you achieve your business goals of attracting, engaging and retaining more customers, click here to schedule a free demo.

Nikhil Naidu

Nikhil Naidu

Growth Marketer at Swell


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