Connect with us


Building a Magento Loyalty Program: Strategies for Customer Retention

Modern e-commerce merchants thrive in a stiffly competitive environment. Brands strive for repeat customers, and customer loyalty is the most sought-after trait in the e-commerce market. In a brick-and-mortar era, shoppers have limited options to explore due to physical constraints, but their options become infinitive and nurture comparison shopping in the online era.

If your products and services are comparatively attractive, you still need some more to keep your customers returning for each new shopping decision. Therefore, marketers rely on various loyalty programs from the best Magento development services to keep their customer base intact and growing.

What Is a Loyalty Program for E-commerce Business?

Loyalty programs convert e-commerce visitors to repeat shoppers by encouraging certain activities, such as signup, placing an order, writing a review, social sharing, etc., to grab rewards from e-commerce.

Types of Loyalty Programs for E-commerce

An e-commerce business can offer the following types of loyalty programs.

  • Points: An e-commerce merchant can set points against customers. When customers reach a threshold, they receive rewards in the form of gifts or products. It keeps customers coming back and accomplishes intended activities on the e-commerce site.
  • Tiers: It’s based on discounts for frequent visits the percentage of discounts increases in a tiered manner with increased frequency of visits with buying.
  • Appreciation: An e-commerce appreciates its customers’ visits by offering some services free of cost that are not free of cost in normal conditions.
  • Rebate: An e-commerce merchant aspires to buy bulk by offering hefty discounts on bulk orders.

How Does Magento 2 Support Loyalty Programs?

Magento 2 offers the following loyalty features and functionality either through built-in or third-party extension modules.

  • Shopping Statistics: Magento 2 keeps the buying history for each customer and churn statistics for them to compare their purchase in the previous period with the current period/month. It helps buyers know how much purchase remains to achieve targeted discounts/points/rewards.
  • Product Reviews: Magento provides an opportunity to write product reviews by their buyers and publishes reviews on relevant product pages. Through a loyalty program, the platform offers appropriate rewards for writing reviews, such as points or discounts, and lets customers know their rewards through email or push notifications.
  • Point System: Magento supports a point system. It lets merchants write rules for earning, redeeming, and forming tiers for points. It also lets Magento owners decide loyalty rules for behavior and catalog.
  • Marketing Push Notifications: Magento supports a push notification feature for loyalty programs. Thus, beneficiary customers receive mobile push notifications for marketing incentives to keep loyalty programs running on Magento 2.
  • Email Notifications: The Magento platform issues the current status of the rewards and points they earn through email notifications.
  • Exchange Rate for Reward Points: Magento 2 lets merchants set exchange rates for declared reward points.

What Are the Benefits of Magento 2 Loyalty Programs?

Magento 2 loyalty programs offer the following advantages to the Magento merchants.

  • High Customer Retention Rate: Magento 2 loyalty programs encourage e-commerce visitors to return frequently to the website to accumulate points or rewards. It increases their loyalty to the brand, cuts the churn rate, and boosts customer lifetime value.
  • High Customer Engagement Rate: Loyalty programs encourage customer interactions with e-commerce businesses, leaving valuable feedback reviews and giving insights into customer preferences.
  • High Sales Rate: With the right incentives, such as discounts, gifts, etc., a loyalty program can increase sales rates and inspire customers to make additional purchases, increasing overall order value.
  • Opportunity for Data Accumulation and Analysis: The Magento web development team helps you plan loyalty programs carefully. It offers opportunities to gather customer data, such as customer preferences, buying history, purchasing patterns, customer behavior, etc. So you can analyze them and draw meaningful conclusions.
  • Room for Personalization: Loyalty programs gather customer data to offer them highly personalized experiences in buying and marketing. Thus, it provides room for personalization and builds effective communication.
  • Boost Brand Loyalty: Loyalty programs push branding to the next level and boost brand loyalty among customers. So, they spread brand messages through word-of-mouth marketing.
  • Beat Competition: Magento development service can help you craft loyalty programs carefully. It provides an edge over market competition and sets the brand apart to draw the attention of new shoppers.
  • Cost Efficiency: We know new customer acquisition is costlier than retaining existing ones, making them repeat shoppers. Magento 2 loyalty programs increase repeat purchases and prove a more cost-effective option than acquiring new customers.
  • Opportunities for Upselling & Cross-selling: Loyalty programs can increase AOV (Average Order Value) by promoting purchases of relevant products on the Magento storefront. Incentives in loyalty programs also encourage shoppers to upgrade to high-value product buying. Thus, the programs promote upselling and cross-selling on e-commerce.
  • Customization: Magento 2 provides flexibility to customize your loyalty programs by introducing unique opportunities to incentivize your customers. Your Magento development company can design loyalty programs with intensive customization to meet your unique needs and resonate with your brand identity.

Extensions for Magento 2 Loyalty Programs

Apart from some built-in features and functionality to support loyalty programs in Magento 2, you have many extensions or add-ons to enable custom loyalty programs in your storefront.

  • Amasty Loyalty Program Extension: It uses cart and customer attributes to offer discounts. It uses customer buying history to create promotions. The extension uses 16 actions for unique prepositions. Users will access program info and buying stats in customer accounts. It encourages user registration and spending more on purchasing.
  • Mageplaza Reward Points Extension: It allows Magento merchants to give bonus points on specific actions, including repurchasing, subscriptions, or writing reviews. Merchants can set rules for each activity.
  • Aheadwork Reward Points Extension: It offers occasion-based reward points. It provides benefit points for registration, subscription, and reviews. It acknowledges customers for point expiration dates. It displays some points on each purchase.
  • Yotpo Loyalty and Referral Extension: It supports loyalty and referral programs to increase lifetime value and customer acquisition. It offers 19-point earning campaigns to drive intended actions. It provides an intuitive marketing UI for new customer acquisition. It lets you build a VIP tier to increase customer engagement. It delivers seamless redemption experiences and flexible options. It gives a comprehensive analysis of loyalty programs.
  • Swiss Up Labs Reward Point Extension: The extension allows merchants to define what can be covered with bonuses. It lets you create advanced rules and conditions for specific customer groups or store views. It also cultivates an e-commerce following.
  • Magestore Reward Point Extension: It offers flexible set exchange rates for earning and spending points. You can pay with points for orders. It allows reward point balance management and adjusts them as you wish. You can ask for a refund for each point earned.
  • Webkul Magento 2 Reward Point Extension: Merchants can create reward points based on products, categories, and cart value. You can decide the value of each point. It allows customers to make partial payments with reward points. It permits customers to invite new customers with referral links on social media.
  • Mirasvit Reward Point Extension: It increases the retention rate and gains high-quality leads. It rewards purchases and shares on social media. It lets you split the program into different tiers. You can get a refund with reward points.


Magento supports different types of loyalty programs by providing built-in features and functionality. Besides these, it has a vast ecosystem with extensions supporting customized loyalty programs meeting different business requirements. It supports points, tiers, appreciation, and rebate types of loyalty programs with desired tools and integrations.

Magento 2 loyalty programs provide vital shopping data and their statistics. Magento 2 enables shoppers to write reviews on products and offer reward points. Magento supports email and mobile push notifications. It lets you set an exchange rate for reward points, etc. Magento 2 loyalty programs provide immense benefits to storefronts, such as high customer engagement and retention rates, high sales rates, room for personalization, brand loyalty, cost efficiency, opportunities for upselling and cross-selling, and room for customization.

The Magento web development team or Magento development service can help you choose the right extension to set up a loyalty program for your store. You must find the right partner.

Author Bio

Mitul Patel Founder & CEO at Bytes Technolab Inc. with a demonstrated history of scaling up the company in the ever-competitive Software Industry. An elite mentor & problem-solver to a dev team of 120+ software experts. A growth strategist and dynamic tech consultant helping global clients to scale up their businesses.

Alice Jacqueline is a creative writer. Alice is the best article author, social media, and content marketing expert. Alice is a writer by day and ready by night. Find her on Twitter and on Facebook!

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply