As many retailers will agree, getting an existing customer to shop with you again is much easier than winning a brand new customer. Finding ways to increase repeat sales should be on every retailer’s agenda, in order to make the maximum sales from the minimum marketing spend and effort. We’re all familiar with loyalty cards in the offline world, be it high-profile reward cards like Tesco’s Club Card or a simple stamped card in your local coffee shop. Independent online retailers often overlook the possibilities for running their own loyalty programme, but with the help of the Loyalty Booster extension from Mageworx, Magento store owners can easily set up a customer rewards system to encourage those repeat sales.
Installation and Configuration
Installation of the extension is straightforward and well-documented in the user guide. If you’re not comfortable installing Magento extensions, Mageworx offers a professional installation service for an additional $49.
If you’re running a custom theme, as most stores are, there is an additional installation step to ensure that all layouts, templates and skin files are placed in the correct place. Again, this is clearly explained in the user guide.
Once installed, the extension’s configuration settings need to be completed, to ensure it works exactly as you require.
Perhaps the most important setting in the configuration panel is the ‘Credit Exchange Rate’, which defines how much in base currency a single reward point is worth. The minimum amount here is 1, and decimal points are not allowed. That means, for a store with a base currency of GBP, and a Credit Exchange Rate of 1, each reward point is equal to £1.00.
In an ideal world, it would be nice to be able to define reward points that were equal to pennies rather than pounds, and then give out larger rewards. That’s the model that the big firms use, as anyone with thousands of Club Card points will agree. There’s sound marketing logic in this, as customers like receiving a large number of points for even a modest spend – even if those points don’t actually add up to a huge amount in cash terms. However, with the Loyalty Booster extension set to a Credit Exchange Rate of 1, retailers can still get creative with their custom rules in order to achieve the level of reward that suits their business.
Most of the other general configuration settings are self-explanatory and take just a minute to complete. One option that stands out is the ability to ‘share’ reward points with others, effectively giving away your own reward points to a friend or family member. This seems like it could be a clever idea, so long as care is taken to explain carefully to customers how that facility works and what they need to do to share their reward points. Too much complication generally turns customers away, so it’s good to see that this option can be switched off if not required.
Also within the configuration settings are options for automatically creating reward points for actions such as submitting a product review, subscribing to the store’s newsletter and tagging a product. Again, it’s important to monitor rewards given via these automated rules to prevent any abuse of the system.
The flexibility in how to set up credit rules is what really sets this extension apart. The name might be a little misleading but ‘credit rules’ define the loyalty rewards that a customer can earn for a variety of actions or events. Each rule is set up to include the conditions under which the loyalty reward is given, and the details of exactly how much is given.
Example rules suggested by Mageworx are rewards for the customer placing his or her first order, and for the customer’s birthday. If using the customer birthday rule, do bear in mind that birthday will need to be enabled as a field in Magento’s customer account creation form – otherwise no birthday information will ever be recorded in Magento, and the rule will never be triggered. If using the first order rule, it might be wise to specify a minimum order amount for that first order, to prevent customers placing an order whose value is actually lower than the reward value. For example, you might choose to offer a £10.00 reward for an initial order of £100 or more.
As well as customer-related conditions for credit rules, it is also possible to set up rules that are triggered by specific product attributes. As an example, you might promote an individual product category or product type by offering reward points on all matching orders. Alternatively, you could offer a ‘cash-back’ incentive on items that are already reduced, by using the ‘special price’ attribute – so that only products that are already marked down trigger the further reward points incentive. The possibilities here are really only limited by the product attributes you have configured, and your imagination.
Moving on from the conditions that trigger the credit rules you set up, it’s important to configure the actions for each rule carefully. The actions tab has three fields:
One-time defines whether or not a reward is only applied to the first qualifying purchase of a particular item. For example, with ‘Yes’ set in the One-time field, if a customer buys a qualifying item one week and then returns a few days later and buys the same item again, he or she will only receive a reward for the first order.
The Qty Dependent setting is used to control what happens if a customer buys more than one of an item that triggers a reward rule. For example, if you set up a rule to apply a reward for the purchase of a sweater, if ‘Qty Dependent’ is set to Yes, then if the customer purchased three sweaters he or she would receive three rewards, one for each sweater purchased.
The credit amount field can be used as a fixed amount or as a percentage of the order total, offering further flexibility. So for example, you could offer a 1% reward on all purchases, regardless of order value. This field supports decimal points, so you can offer reward amounts of £2.50 or 3.5%, for example.
It’s perhaps an unusual choice of name for this piece of functionality, but recharge codes are admin-generated codes that can be sent to customers to give them a loyalty reward. The customer uses the code to apply the reward (credit) to their account.
Recharge Codes can be generated automatically, in whatever quantity is required. Once generated, these codes could be exported for use in a newsletter mail merge for example, giving each recipient a unique code entitling them to a specified cash amount to spend in store. Putting an expiration date on the reward code would provide further incentive to spend the cash reward as soon as possible. A well-written newsletter can be one of the most powerful sales drivers in the retailer’s toolkit, so anything that boosts the incentive to follow through from a newsletter is of real value.
If there is one minor with this extension, it is the naming of components. Store Credit is used throughout the extension, which could cause confusion with Magento’s in-built Credit Memos. However, this isn’t a big problem, as it could always be overcome by using the locale files to rename to something else, such as ‘Reward Points’ or ‘Loyalty Points’.
All in all, the Loyalty Booster extension could be a powerful addition to a retail store, in particular a store where repeat buying was the norm. By using this extension to keep customers coming back, rather than shopping around for the best deal, retailers could drive up repeat order numbers over time, to produce a significant cumulative boost. With any programme of this sort, care needs to be taken to prevent abuse and to ensure that rewards are commensurate with spend and not overly generous. With planning and careful monitoring however, a comprehensive reward program could be developed that appeals to both the retailer and his or her customers.