Magento Reward Points System (and how to use it to increase customer loyalty)

 

The Magento Enterprise reward points system gives you the ability to implement unique programs that enhance user experience and increase customer loyalty. Reward points can be awarded from a wide range of customer transactions and activities, and can be rewarded at configurable denominations and redeemed at a set exchange rate.

 

Using Magento Reward Points System to increase customer loyalty

Introducing a strategic reward points system into your webstore can not only help build brand loyalty (or your brand for that matter - more on that below), but can also lead to both a higher frequency of conversions and higher order values. 

Building a reward points system that customers can buy into can go hand in hand with them understand what you are about (by creating incentives for them to subscribe to newsletters, to create an account, to invite friends, etc). This will not only give you increased opportunity to build an identity with your customers, 

 The naming conventions of the reward points, and design of the email notification emails can all help to build your brand identity and set you apart from other loyalty programs, and help customers to feel like they are having a personable shopping experience (the ability to create and tie unique content for individual customer groups / website can help achieve this).

Magento offers the ability to tie reward points to the following customer actions:

  • Purchase
  • Registration
  • Newsletter Signup
  • Converting Invitation to Customer
  • Converting Invitation to Order
  • Review Submission
  • New Tag Submission

The Reward Points configuration settings define the basic operating parameters, such as: the lifetime, cap limits for each of the actions and the presentation of reward points in the store.

 

How to implement and configure a Magento reward points system

Step 1 - Configure Reward Points

  1. The first step in this multi-step configuration is to enable the reward points system, and set the points to be awarded for each customer action (along with any cap limits). To do this, first navigate to System > Configuration > Reward Points (under Customers section on the left hand side).
  2. In the Reward Points tab, complete the following fields:

    • Enable Reward Points Functionality: Set to "Yes" to enable.
    • Enable Reward Points Functionality on Frontend: Set to "Yes" to allow customers to earn their own reward points on the frontend.
    • Customers May See Reward Points History: Set to "Yes" to allow customers to see a detailed history of all earned / redeemed reward points.
    • Minimum Reward Points Balance to be able to Redeem: Enter the minimum number of reward points that must be accrued before any points can be redeemed.
    • Cap Reward Points Balance At: Enter the maximum number of reward points that a customer can accrue.
    • Reward Points Expire in (days): Enter the number of days before the reward points expire (leave blank for no expiration).
    • Reward Points Expiry Calculation: Set to either Static or Dynamic. Setting this to Static will mean that if the expiration limit in the configuration changes, the expiration date of the existing points does not. Setting this to Dynamic will mean that if the expiration limit changes, the expiration date of existing points will as well.
    • Refund Reward Points Automatically: Set to "Yes" if you want to refund available reward points automatically.
    • Deduct Reward Points from Refund Amount Automatically: Set to "Yes" if you want to automatically deduct reward points from the amount of a refund.
    • Landing Page: This is where you set a CMS page that will explain your reward points program to customers. While Magento does create one of these pages by default, make sure you update it with details reflecting your own reward points program.

3. When you are happy, click Save Config.

 

Step 2 - Set the Reward Points Exchange Rate

Before configuring the individual awarded point depending on customer action, I think it is best to start thinking about what you want the reward points exchange rate to be. The reason for this, is if you set the reward points exchange rate to 1 point = £1, it then might not sense to reward 100 points for signing up to the newsletter. 

  1. You can configure the rewards points exchange rate by navigating to Customers > Reward Exchange Rates. While you can view already configured rates (and amend any accordingly), to create a new rate click +Add New Rate
  2. On the New Reward Exchange Rate screen you will then need to complete the following fields:

As you can see, different reward point exchange rates can be configured for different websites / customer groups. 

Note: When exchanging reward points to currency, currency will always be rounded down and are never divided. For example if £2.00 converts to 10 points, points will be earned in groups of £2.00. A £7.00 would therefore earn 30 point, and the remaining £1.00 would then be rounded down.

 

Step 3 - Configure Awarded Points for Customer Activities

  1. In the same System > Configuration > Reward Points screen(under Customers section on the left hand side), expand the Actions for Acquiring Reward Points by Customer tab. 
  2. Complete the following fields:
    • Purchase: To allow customers to accrue points from purchases, set to "Yes". If set to yes, the amount of points rewarded per order value will be as per the reward points exchange rate set in Step 2.
    • Registration: Enter the number of points to be rewarded to registering to the website.
    • Newsletter Signup: Enter the number of points to be rewarded for signing up for the newsletter.
    • Converting Invitation to Customer: Enter the number of points to be rewarded when a customers sent invitation is converted into the recipient registering for an account.
    • Invitation to Customer Conversions Quantity Limit: Enter the maximum number of points to be awarded for the above customer action.
    • Converting Invitation to Order: Enter the number of points to be rewarded when a customers sent invitation is then converting into an order.
    • Invitation to Order Conversion Quantity Limit: Enter the maximum number of points to be awarded for the above customer action.
    • Invitation Conversion to Order Reward: The options here are either First or Each. If set to First, the customer will only be able to accrue reward points from the first customer invitation conversion. If this option is set to Each, they will then be able to accrue reward points on every customer invitation conversion (by the amount configured).
    • Review Submission: Enter the number of points to be rewarded when a customer submits a review and it is then approved by an administrator.
    • Rewarded Reviews Submission Quantity Limit: Enter the maximum number of points to be awarded for the above customer action.
    • New Tag Submission: Enter the number of points to be rewarded when a customer submits a tag and it is then approved by an administrator.
    • Rewarded Tag Submission Quantity Limit: Enter the maximum number of points to be awarded for the above customer action.

3. Once happy, click Save Config.

 

 Step 4 - Complete the Email Notification Settings

The final step in this process is to set up the email notifications that customers will receive updates on their reward points accrual and when certain milestones are met.

  1. In the same System > Configuration > Reward Points screen(under Customers section on the left hand side), expand the Email Notification Settings.
  2. Complete the following fields:
    • Email Sender: Select from the dropdown, who you want to be the sender of the emails.
    • Subscribe Customers by Default: Set to "Yes" if you want all customers to receive these emails by default.
    • Balance Update Email: Select a transaction email from the dropdown to be used to update customers on their reward points balance.
    • Reward Points Expiry Warning Email: Select a transaction email from the dropdown to be used to warn customers about a nearing reward points expiry date.
    • Expiry Warning Before (days): Enter the number of days prior to expiry that you want to send out the Reward Points Expiry Warning Email.

3. Once happy, click Save Config.

 

How to Add Reward Points to a Shopping Cart Price Rule

Reward points can also be tied to shopping cart price rules, so that when conditions are met customers are awarded a defined number of reward points. Shopping cart price rules can then be configured to award customers with reward points, a discount or both. Awarded reward points in lieu of, or in addition to a discount can help build brand loyalty and tie a customer

  1. Navigate to Promotions > Shopping Cart Price Rules and then either search for and select or click Add a New Rule to create one from scratch.
  2. In the Actions tab, see the Add Reward Points field and enter the number of reward points you want to award the customer with when the conditions of the rule are met. Again, this can be the only award customer received when conditions of the rule are met, or can be in addition to a discount.
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