Reward Points/Loyalty Points
Reward Points otherwise known as Loyalty Points can be awarded to buyers every time they sign up for an account, purchase, social promotion, refer new buyers, review a product, etc. The earned points can be redeemed to get a discount on future purchases.
When a new user makes a purchase on an e-commerce site, the possibility of that user making the second purchase depends on many factors out of which Reward Points / Loyalty Points is one of the main factors. If the Buyer receives reward points during the purchase, it is more likely that they will make their next purchase to redeem the points earned and earn more points.
Benefits of Reward Points
- Customer Retention rate will be more because users who have earned Reward Points often tend to make repeated purchases in order to earn more Reward Points or use their accumulated reward points
- Loyal Customers often refer your site to their friends and relatives which will bring new buyers to the site
- Increases your conversion rate
- Increases your average customer lifetime value
- Can reduce your Promotion cost as loyal buyers will make repeated purchases and also refer new buyers
- Helps in building a close relationship with your customers
- Makes your customers happy