Successfully retaining customers is the cornerstone of any thriving business. Loyalty programs are one of the most powerful tools to accomplish this. However, in today’s competitive ecommerce space, simply setting up a loyalty program is not enough! To fully reap the benefits of these programs, it’s important to implement loyalty program best practices to ensure your program aligns with your business goals.
No worries, we’re here to help out! In today’s article, we’ll walk you through proven loyalty program best practices to help you engage shoppers and keep them coming back. By the end, you’ll also know how to easily set up a WooCommerce loyalty program using our powerful plugin.
Ready to dive in? Let’s get right into it!
Why Is Loyalty Program Management Important?
A successful loyalty program is not something you set then forget. It takes proper planning and continuous refinement to make sure you’re running a rewards system that truly engages your customers. In fact, according to an industry study, 58% of loyalty program members do not actively use the programs they signed up for.
There are several reasons why some loyalty programs fail to deliver. Harvard Business Review shares three key reasons:
- Failure to get the economics right: Poorly designed programs become financial burdens to businesses as they incentivize the wrong type of customer behavior. For example, offering discounts on products that shoppers would buy anyway chips away at profit margins without encouraging new behavior.
- Lack of understanding of customer behavior: Not having enough customer data results in poorly targeted rewards. Without a proper understanding of what motivates shoppers, rewards can feel irrelevant and fail to drive meaningful engagement.
- High competition and low differentiation: The average US consumer is enrolled in 12 customer loyalty programs. Programs that fail to stand out and provide real value risk fading into the background.
These pressing statistics highlight the need for efficient loyalty program management. Only by taking the time to truly know your customers and plan your rewards program strategically can you reap the benefits. So, let’s look into some best practices to guide you in the next section!
Loyalty Management Best Practices For Store Owners
A well-structured loyalty program can help retain customers and turn them into brand advocates. This is a crucial factor for the long-term success of your business. In this section, we’ll explore loyalty program best practices to help you do just that.
1. Define your goals
Before setting up your rewards program, take a moment to define what you want to achieve by implementing this strategy. Knowing your goals can help you determine what metrics to track and guide your marketing efforts. For instance, depending on where your business is at, you might want to:
- Increase customer retention: Keep your existing customer base and increase their engagement with your brand.
- Attract new shoppers: If your store is relatively new, your focus might be on growing your customer base early on. This may mean offering sign-up bonuses or rewarding referrals.
- Boost average order values: Motivate shoppers to spend more through tiered rewards that offer better perks as they unlock bigger spending levels.
- Motivate specific actions: You may want to get more customer reviews, encourage shoppers to support a new product line, or improve social media engagement.
Knowing what you’re aiming for will also help you choose the loyalty rewards that will drive results for your business.
2. Use customer insights to guide your strategy
Remember the reasons we mentioned earlier about why some loyalty programs fail? One pitfall you want to avoid is not analyzing customer behavior. Thankfully, as an ecommerce business owner, you already have a wealth of information at your fingertips to guide your loyalty program strategy. Here are some key considerations:
- Purchase patterns: How often do your customers shop, what products are they buying and what are their typical average order values? This type of data can guide your decisions when deciding which products to offer exclusive perks or setting point redemption thresholds.
- Redemption trends: If you’ve been running a loyalty program for a while, it’s important to keep track of redemption trends. Which perk motivates your shoppers the most? This can help you craft incentives that resonate and drive engagement.
- Feedback: Sometimes, the best (and most relevant) insights come directly from your customers. Leverage the power of surveys, polls, and feedback forms to find out what your customers want.
- Personalization: Use available customer insights like purchase history to provide custom product recommendations and exclusive offers.
Using customer insights to guide your strategy can help you tailor a rewards system that’s personalized and engaging for your target market.
3. Make joining easy
Here’s a golden tip: make it simple from the get-go. It’s easier to encourage participation if you have an easy, fuss-free registration process. Start by asking only for essential information (such as name and email address) and avoid overwhelming shoppers with lengthy forms.
It’s also important to communicate the value upfront. Help customers understand the benefits of joining your loyalty program, whether it means they’ll get exclusive perks, members-only access, or points they can redeem for discounts. Many brands take this a step further by creating a dedicated landing page to fully discuss the benefits of joining their loyalty program.
💡BONUS TIP: Encourage customer sign-ups by offering an immediate reward–think bonus points, free shipping, or a welcome discount. Plugins like WooCommerce Loyalty Program, for example, allow store owners to grant bonus points for new customer registrations.
4. Reward different actions to engage shoppers
This is one of the most important loyalty program best practices to remember. If you really want your rewards system to stand out, then it’s crucial to offer rewards beyond purchases. Incentivizing different actions will encourage more engagement and make your program more fun and interactive. Best part? You can align these actions to support your specific business goals.
For example, if you’re looking to build trust and credibility, you might want to incentivize leaving product reviews. Tools like WooCommerce Loyalty Program allow store owners to reward different actions from customers, including leaving reviews, reaching a set spending threshold, or shopping on certain dates. This is handy if you’re aiming to increase overall engagement and average order values.
5. Provide exclusive discounts and perks
One of the most exciting things about running a loyalty program is that you can offer a variety of different perks and incentives to make your customers feel special. Use the customer insights you already have (as well as shopper feedback) to decide what perks to offer. Depending on what drives your customers, you can consider rewards like:
- Free shipping
- Gift cards
- Members-only experiences
- Store credit
- Tier-based incentives
- Early access to products, discounts, or sales
Looking for fresh ideas? We’ve compiled loyalty incentives you can offer to make your customers feel special in this complete guide! 👉
6. Make redemption simple
Aside from making joining easy and simple, it’s just as crucial to simplify rewards redemption. If customers find your redemption process confusing or difficult, they’re less likely to stay engaged, and your efforts to encourage them to join and stay could go to waste!
To avoid this scenario, give your customers clear guidance on how they can redeem their rewards. Be transparent–offer customers a clear way to view their existing points and rewards. Seeing their available points or perks can also encourage them to take action and redeem their points.
Plugins like WooCommerce Loyalty Program, for instance, seamlessly integrate with WooCommerce’s My Accounts dashboard to show customers exactly how many points they have earned and where to redeem them as store credits:
7. Set clear points expiration rules
As we’ve discovered so far, running a successful loyalty program is about removing the guesswork and making things simple for your customers. This applies to expiration rules too. Setting timely and reasonable expiration dates on perks and points can help you engage your customers in the long run.
The key is to strike the right balance: set expiration dates that create a sense of urgency without frustrating or rushing customers. For reference, the industry standard for points expiration typically falls between 12-24 months, giving shoppers a reasonable amount of time to earn and redeem rewards.
8. Track, analyze, and adjust
Don’t be afraid to tweak your loyalty program as you move along. As you run your rewards system, you’ll gain more customer insights that can help refine your strategy. What’s more, your business priorities will likely evolve over time. It’s therefore important to ensure your loyalty program reflects these new priorities.
Thankfully, today’s loyalty program tools offer detailed insights that can help you assess how your system is doing. WooCommerce Loyalty Program, for example, gives store owners access to a dashboard that summarizes key details like top points sources, top earning customers, and points history:
As with implementing any strategy, don’t be afraid to think outside the box. Experiment with different reward structures and incentives to see what drives the most results.
How To Easily Set Up A Loyalty Program In WooCommerce
Setting up a loyalty program on WooCommerce doesn’t have to be a daunting task! Plugins like WooCommerce Loyalty Program make the entire process a breeze for store owners. With this powerful plugin, you can easily set up a points and rewards system in your store.
This plugin also makes implementing loyalty program best practices easy. For instance, you can:
- Reward multiple actions: Grant points for actions like registering as a customer, leaving product reviews, purchasing for the first time, and more!
- Gain actionable customer insights: The plugin provides an official dashboard that summarizes important information like point sources, top-earning customers, and points history.
- Set flexible expiration dates: Motivate timely redemption by setting reasonable points expiration dates and store credit percentage limits.
Want to learn more about how to set up a loyalty program in WooCommerce? Check out our full guide here. 👉
Frequently Asked Questions
How do you structure a loyalty program?
Create a loyalty program that supports your business objectives. Start by reflecting on what you want to achieve, whether it’s increasing customer retention, boosting average order values, or increasing overall customer engagement. After establishing your goals, define the earning rules for your program and what perks you’ll provide. You can choose from a wide variety of incentives, depending on what motivates your shoppers.
As you run your loyalty program, don’t be afraid to make adjustments along the way. Customer engagement and direct feedback can help you refine your strategy and keep the program relevant. Plugins like WooCommerce Loyalty Program simplify the process of setting up and managing your rewards system, allowing you to track customer activity and adjust redemption rules as needed.
How to launch a successful loyalty program?
Launching an effective loyalty program entails strategic planning and continuous refining. After defining your program’s structure, earning rules, and rewards, let your customers know about it through a marketing campaign. You can leverage email marketing, social media, website banners, and in-store promotions to encourage shoppers to join. To make it more enticing, consider offering exclusive welcome bonus points or sign-up incentives for early joiners.
Plugins like WooCommerce Loyalty Program allow you to grant bonus points on specific periods, which can be a smart move in the initial week or month of your campaign.
What are the KPIs for loyalty programs?
One of the most common key performance indicators (KPIs) tracked for loyalty programs is the customer retention rate–this measures the percentage of customers who continue to purchase at your store over time. Another crucial KPI is the rewards redemption rate, which tracks how often customers use their points or perks. Some businesses also track average order values (AOV) to assess whether program members are spending more per transaction. Increased AOV might indicate that your program is successfully incentivizing higher spending among members.
Conclusion
Launching a loyalty program is a powerful strategy to retain existing customers and support the long-term success of your business. However, it’s not a set-and-forget endeavor. To truly reap the benefits of your rewards program, it’s essential to strategize and implement the loyalty program best practices we’ve touched on in this guide:
- Define your goals
- Use customer insights to refine your strategy
- Make joining easy
- Reward different actions to engage shoppers
- Provide exclusive discounts and perks
- Make redemption simple
- Set clear points expiration rules
- Track, analyze, and adjust
WooCommerce Loyalty Program simplifies the process for you. With this powerful plugin, you can launch a loyalty program in minutes, reward customers, and engage them in meaningful ways.
We hope this article gave you valuable insights! Do you have any questions about running a loyalty program in WooCommerce? Let us know in the comments.
