Magento Development – Building a Loyalty Platform Using an Ecommerce Engine

By in Marketing, Pyxl Blog on September 30, 2016

This post originally appeared on the Pyxl Blog.

Loyalty programs come in all varieties, from loyalty cards to membership based programs, and no one type is better than the others, let alone perfect. E-commerce loyalty programs are one of the most common types that the Pyxl team deals with on a daily basis. With the average U.S. household subscribed to around 22 different programs – how can your business afford to not offer one as well?

Building an e-commerce loyalty program is often one of the most inexpensive ways to break into the loyalty market. The cost of development is usually one of the only costs involved to get the program up and running digitally.

Additionally, creating upfront goals for what you want your program to accomplish is the best way to measure future success. Some goals are obvious, while others you have to look deeper into analytics to fully formulate. Some example goals could be: total sign-ups, daily active users, and visibility to the market.

Similarly, some questions to keep in mind include: “Am I influencing better purchase behavior?” and “Am I coercing bystanders to convert to customers?”

The main goal of any loyalty platform is to create a program that simultaneously delights current customers and appears irresistible to those not engaged. As a result of your loyalty program, the two groups (current customers and bystanders) will experience the following at some point:

  • Gratitude: Appreciation for benefits received and a desire to reciprocate.
  • Status: Perception of holding an elevated position in customer hierarchy.
  • Unfairness: Ratio of received outcomes relative to inputs, as compared with other customers.

Appeasing one group can alienate the other with feelings and thoughts such as, “Why didn’t I get that feature?” In order to account for these opposing forces and help eliminate that ‘unfairness feeling’ that might be experienced, use these guiding principles:

  • Rule Clarity – How hard is it to understand rewards?
  • Reward Exclusivity – Do customers feel like this reward is unique?
  • Reward Visibility – Do others see the customer earn? Do they want to join in?

There are many methods of integrating your e-commerce platform into a loyalty program. Creating rewards based on purchase history is the most common, but can take on many forms. The first method revolves around points. Points can be converted into discounts, free items and more. The next method is cash value, such as giving cash back and offering discounts. The final is through physical items, like including extra items with a purchase.

Hooking your e-commerce loyalty program back into other types of loyalty programs creates a seamless experience that keeps customers engaged and coming back for more. Allowing customers to collect or redeem reward points in stores or in a mobile app will make sure your brand is top-of-mind no matter where they are in the buyer’s journey.

Magento has a number of tools that allow you to create an engaged, enticing experience for your customers. Numerous extensions exist that can help you implement some of the aforementioned point- and cash-based systems at a fraction of the cost of creating something custom. Magento is also extremely extensible, offering a built-in API to connect other applications to the purchasing, customer information and existing loyalty program.

Pyxl’s loyalty program experience varies widely with a range of technologies and loyalty program types. We’ve integrated technologies like Magento with existing loyalty programs that have millions of members. If you are just getting started with creating a loyalty program, or if you are a seasoned veteran in the loyalty space looking to integrate into another technology medium, Pyxl is here to help! Reach out today to see how we can help.

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