Campaign Creation Tips

KISS - Keep it Sweet and Simple

Combining your marketing imagination with MageRewards is incredibly easy, but it's something that shouldn't be taken too lightly. If you can accomplish what you have in mind by setting just one rule instead of three, do it. It's simpler for you and for your customer who needs to also understand how your campaign works, especially without reading the fine printed documents that describe your reward methods.

The KISS rule (Keep it Simple, Stupid!) must be applied to avoid unnecessary confusion for you, as you are tracking points and making the system profitable and fair at the same time (this is very important), and for your customer that need to see your points system as something positive and that translates to achievable benefits - not into more thinking trouble! Always remember that your customers have different levels of technical knowledge and you should try to level your site usability difficulty to those with more difficulties. Those who already master computers, surf the web seamlessly and already shop avidly in other stores will always find a way to get what they want.

The main practical advice is: start with broader rules that affects everything and everyone, and then go narrowing your rules step by step so that you do not loose track of what you are offering. In terms of earning points you can start by creating a rule directly connected to the amount that is spend in your shop (the client spends X dollars and receive Y points), then you could add special bonus points for choosing some payment type or shipping option; after that you can add extra bonus steps (e.g. for each 1000 dollars, the client gets not only the points he/she already deserved but also an extra bunch of points); and then you can start narrowing to categories, brands, product combination, etc... MageRewards is as flexible as the standard Magento rule system, enhancing it with a kind of personal virtual economic layer that you can use to boost your sales by inciting the customer to come back.

Balance is the key

Having such a flexible way of earning and redeeming points is a tremendous advantage to any store. Having your own internal economy, with your very own currencies gives you an additional level of control that translates to more sales. The concept is simple: you have a currency that can only be spent on you store (not in the competition) and that the user can manage like if it was money. They can use them as store credit, achieve special discounts or unlock out of the ordinary sale conditions. As clients know this currency is useless outside your store, they will be compelled to spend what is rightfully theirs and make another purchase. However, in order to achieve this enthusiasm on the client, and at the same time leaving margin for your own profit, the system must be built over a fair and balanced foundation.

If you are not careful on creating your point campaigns, and start offering too much, you might end up by offering people your products without making a dime out of it. On the other hand if your campaign is too greedy, where the client takes a long time and a lot of purchases to achieve anything, it may demotivate your public and they will stop believing in your system (in some extreme cases it can even turn against you). So there must be balance - people should feel they are compensated but you should feel that your profit is not going down the drain. That's why keeping things simple here really helps out as it gives you the control you need to tame this problem.

Always put yourself in the place of the sneaky user

A sneaky user is that someone that tries to stretch out the value of his/her points to his/her benefit. And if that isn't enough he/she will be lurking for breaches to get more points and outsmart you. Many abusive situations can be detected if you have a small bunch of customers but once you reach a certain number of users you must rely on a autopilot system that's bulletproof. MageRewards can be that strong and secure, but if you do not sail it correctly, no divine intervention will save you from hitting the iceberg. Bottom line: always remember that you are in control.

If you have that friend or relative that's really good at combining promotions, coupons, discount codes, rebates and everything: you've got yourself the perfect test subject for your campaign. You'll probably see things happen in a way you have never predicted and will sure help you to fine tune your system.

Give special attention to those distribution rules that give points without a formal physical exchange. Points obtained from purchases require that the client actually spend money to get them. Signing up for content, registrations, voting, reviewing and anything that can grant points in such a simple way. MageRewards combined with already built-in Magento features can prevent a lot but the sneaky customer may find another way in. The best advice: do not exaggerate on the amount of points awarded by these special actions. Their value must be acceptibly low if you want to discourage cheating.

How much is each point worth?

While setting up normal and immediate discount rules such as "5% Off" or "$10 rebate on purchases over $100" is easy to keep track of, working with a reward program isn't exactly same thing and it becomes more complicated to control. The examples rules above start by "talking" in real world currency and have immediate effect. You, as a store owner, can calculate if offering $10 on $100 purchases is profitable or not simply by considering your lowest margin. But if we throw in some conditions like: "to be able to have the $10 rebate on $100 today I had to purchase $50 yesterday" it becomes a bit more complicated. The same concept applies when we are talking about a points and rewards system because it is always assumed that you cannot spend immediately what you've earned. For the shop owner this fact translates in more difficulty on tracking what you are you really offering at one moment. The first step to overcome this issue is to set a real conversion rate for your points.

So, how will you calculate the actual "price" of your points? Let's follow this example:

  • For each $1 the client spends, he/she earns one (1) point.
  • In order to lower the price of an item from $80 to $75 ($5 off) the client must spend 100 points (1:20 ratio)
  • For every single dollar that is being taken off from this product's price, the client had to amass 20 points, and for that he/she have already spent $20 before. In total, to have 100 points, the client spent a total of $100.
  • At this point, and considering you don't have a fixed margin of product, you must work always with your minimum margin of profit. Let's consider that it is 50% over the cost. Let's also not consider any tax whatsoever.
  • Now, the client has already spend $100 which means you've earned a minimum of $50 = 100-(100/1,5)
  • This product as a margin of 50% as well and would profit you $40. This means that with the combined purchases you would gain $90.
  • From those $90 you must take out the $5 you offered, which leaves you a total of $85 liquid. Simple, right?


And always consider that...

  • After a rebate was performed the client receives another batch of points for future redemption. It is recommended that you do some chain purchases in order to simulate these situations.
  • Points that were achieved by other means than past purchases have a greater value because their impact will not be directly be diluted in two orders but only in one - apparently they are worth the same buy they are not!
  • Use always your minimum profit margin so that you do not go negative (unless you intend to do so in your marketing strategy).
  • Simulate a lot. The more you test the less surprises you'll get in the future. Preferably, ask other people to test the system for you. This is very important as you will have many wise guys trying to drill a hole in your scheme in order to better stretch their points and get maximum from them.
  • Taxes (like VAT) should not be forgotten like in the example above.

Another advice to keep things on track and to predict how much your points will be worth in the future is to create Discount Ratios. Ratios really help to categorize all of your discounts so that you can distinguish immediately the light rebates from heavy (and risky) ones. Consider that you have three types of ratios: 1:10, 1:20 and 1:30. The means that to get one (1) dollar of rebate the client must gather 10, 20 or 30 points. The higher this last number is, the smaller the discount will be. Let's consider another example:

  • A product is tagged with a $50 price and offers two MageRewards powered rebates: the first one is a 5% discount, and the second is a 10% discount.
  • We'll follow the principle that higher discounts are more difficult to achieve than the lower. So, if the 5% option has a 1:10 ratio, the 10% should have a 1:20.
  • In order to know how much points you'll have to set in order to respect your ratios, you must calculate how much the percentage offered is. 5% of $50 is $2,5 and 10% is $5. So, we must offer $2.5 in a 1:10 rate which translates to 25 points, while in order to get 10%, the client will have to invest 200 points.

Give your points a flavour

With MageRewards you can change the total look and feel of points so that they're not even ever referred to as "points" but rather some other caption. For example, a stamps store might call them "stamp_store dollars", a pet shop could call them "bones" or you could even use the term "wheels" for an auto store.

Always beware of your creativity. Remember that metaphors, if wrongly used, can actually confuse customers and work against the purpose of your campaign. The point concept should be crystal clear to the customer. People are used to call them just points, and for that term you'll have their understanding of the whole concept for granted. The bottom line is: even though you should change the name only if you have a really good reason, MageRewards gives you that possibility.

Campaign Building Blocks

The building blocks are mostly rules or sets of rules that can be used to construct a campaign. These are isolated tips for distributing and redeeming points with MageRewards in a modern e-commerce environment.

Giving Points With Purchases

This is the most common way to give points to your customers. Here we propose a few methods you can easily incorporate in the marketing strategy of your shop by using the MageRewards Rule Creator flexibility. We present here the detailed instructions on how to achieve each method and their advantages and disadvantages.


Linear Distribution

This is the plain vanilla points distribution method and works like many fidelity card systems around the world: 1 dollar spent by the customer equals to one point. Remember that it doesn't matter if the customer gets lots of points or not, it's in the redeeming process that the true value for each point is calculated. It's also very simple to understand and the customer will have no doubts while purchasing - not too much to think! The best way to run this method this is by setting up a Catalog Distribution Rule. However, you could use a Cart Rule as well but in the first case the user would see the points right next to the product listing instead of having that information on the cart page. Also, Cart Rules are great to be used as complement (or bonuses).

How it Works
  • The customer adds a product to the cart and the points that will be earned correspond to each full currency unit (dollars or euros, for example).
  • If a product costs $99 then 99 points will be earned
  • If a product costs $30.5 then 30 points will be earned
How to Achive this Example
  1. Log-in to your Administration Panel and go to Customer Rewards > Point Rules > Distribution Rules > Catalog.
  2. Click 'Add New Catalog Distribution Rule'.
  3. Name it, set the Websites where it will be active and to which Customer Groups it is available to.
  4. Skip the 'Conditions' tab and in the 'Actions' tab:
    • Set 'For every Y dollar amount in price, give X points' in the 'Action' field
    • Set '1' in the 'Points Amount (X)' field
    • Set '1' in the 'Monetary Step (Y)' field
    • Save and Apply the rule
Strengths & Weaknesses
  • PRO: Very simple to implement and to be understood by your customers.
  • PRO: Great to start with and to build a strong and controllable campaign.
  • CON: Alone, it treats equally those who spent more with those who spent less.

Regular Step Distribution

Similar to the Linear Distribution but now you don't award points in steps. You can still have the 1:1 ratio you had in the Linear method but now customers must overtake predefined levels to get them. For example: customers only get their points if they reach multiples of 50 dollars with their sub-totals. This time, choosing between a Catalog or Cart rule isn't the same thing at all. Since we are using steps, the combination price of all articles in cart has more advantages to the customer than quoting points individually.

How it Works
  • Considering we are using a $50 step:
    • If you use a Catalog Rule
      • Adding a $100 product - 100 points will be earned
      • Adding two $125 products - 200 points will be earned (both $25 are not considered)
    • If you use a Cart Rule
      • Adding a $100 product - 100 points will be earned
      • Adding two $125 products - 250 points will be earned (the rule is applied now to the sum)
  • The best (and fair) option in the consumer perspective is the Cart Rule because it gives him/her some degree of control.
How to Achive this Example
  1. Log-in to your Administration Panel and go to Customer Rewards > Point Rules > Distribution Rules > Shopping Cart.
  2. Click 'Add New Cart Distribution Rule'.
  3. Name it, set the Websites where it will be active and to which Customer Groups it is available to.
  4. Skip the 'Conditions' tab and in the 'Actions' tab:
    • Set 'For every Y dollar amount in price, give X points' in the 'Action' field
    • Set '50' in the 'Points Amount (X)' field
    • Set '50' in the 'Monetary Step (Y)' field
    • Save the rule
Strengths & Weaknesses
  • PRO: Still a simple rule with simple and easy to understand constraints.
  • PRO: Encourages the spending in order to reach the next step.
  • CON: Still treats in a similar fashion those who spend less as those who spend more.
  • CON: If used as a Catalog Rule it removes some degree of control to the customer and may cause frustration.

Irregular Cumulative Step Distribution

Consider this as an evolution of the previous method combined with the Linear Distribution. Now we cannot accomplish this just by using a single rule. We must press the customer to spend more by aggressively rewarding bigger orders. Customers that will buy $600 at once will receive a lot more points than those customer who made 3 orders $200 each. We'll use a combination of the Linear Distribution and Regular Steps rules. This is a better demonstration of MageRewards's potential on accumulating multiple rules.

In this example we'll grant the user 1 point for each dollar, euro or other currency unit spent, and we'll award bonuses in steps. The first bonus is that for every $100 barrier the client breaks, an additional batch of 100 points is awarded; the second bonus is that for each $200 spent, 200 points will be added. As the steps are cumulative, you must be extra careful setting up the steps. See below for a better understanding.

How it Works
  • Below $100 only the first Rule (the Linear Distribution Rule) is triggered:
    • Adding a $75 product - 75 points will be earned
    • Adding a $55 product and a $29 product - 84 (55 + 29) points will be earned
  • If the $100 barrier is broken, a bonus apply:
    • Adding a $120 product - 220 (120 + 100) points will be earned
    • Adding two $90 products - 280 (90 + 90 + 100) points will be earned
  • If the $200 barrier is also broken, another bonus apply:
    • Adding a $250 product - 650 (250 + 100 + 100 + 200) points will be earned
    • Adding a $400 product - 1200 (400 + 100 + 100 + 100 + 100 + 200 + 200) points will be earned
How to Achieve this Example
  1. Perform all the steps in the "Linear Distribution" method
  2. Perform twice all the steps in the "Regular Step Distribution" method, considering that:
    • Set 'For every Y dollar amount in price, give X points' in the 'Action' field
    • Set '100' for the first rule and '200' in the second rule in the 'Points Amount (X)' field
    • Set '100' for the first rule and '200' in the second rule in the 'Monetary Step (Y)' field
Strengths & Weaknesses
  • PRO: Rewards those who spend more in one order.
  • CON: Must be setup with extra care because customers that spend a lot may get more points than what you expected - Simulate a lot!

Irregular Non-Cumulative Step Distribution

The main defect of the previous model is that it can get out of control because it sums every bonus. Now, we'll try a variant that let's you control more precisely how point distribution evolve. We'll be now creating five rules: one for the Linear Distribution and four that will act like isolated step bonuses. The objective here is to prevent bonuses from overlapping. We could do it in a bunch of ways but the most simple option is to define a point limit by putting the same exact amount of point either in the 'Points Amount (X)' and 'Maximum Total of Points To Transfer' fields. In this example we'll be giving our customers an extra 50 points if they purchase more than $50 OR 100 extra points if they break the $100 limit OR 200 points for orders beyond $200 OR 300 points for more than $300. This means that the maximum bonus is, in fact, 300 points.

How it Works
  • Below $50 only the first Rule (the Linear Distribution Rule) is triggered:
    • Adding a $25 product - 25 points will be earned
  • If the $50 barrier is broken, a bonus apply:
    • Adding a $55 product - 105 (55 + 50) points will be earned
    • Adding two $40 products - 130 (40 + 40 + 50) points will be earned
  • If the $100 barrier is broken instead (Rule 2):
    • Adding a $110 product - 210 (110 + 100) points will be earned
  • If the $200 barrier is broken instead (Rule 3):
    • Adding a $250 product - 450 (250 + 200) points will be earned
  • If the $300 barrier is broken instead (Rule 4):
    • Adding a $400 product - 700 (400 + 300) points will be earned
    • Adding a $1500 product - 1800 (1500 + 300) points will be earned
How to Achieve this Example
  1. Perform all the steps in the "Linear Distribution" method
  2. Perform four times all the steps in the "Regular Step Distribution" method, considering that:
    • Set 'For every Y dollar amount in price, give X points' in the 'Action' field
    • Set '50' for the first rule, '100' in the second rule, '200' in the third rule and '300' in the fourth rule in the 'Points Amount (X)' field
    • Set '50' for the first rule, '100' in the second rule, '200' in the third rule and '300' in the fourth rule in the 'Monetary Step (Y)' field
    • Set '50' for the first rule, '100' in the second rule, '200' in the third rule and '300' in the fourth rule in the 'Maximum Total of Points To Transfer' field
Strengths & Weaknesses
  • PRO: Rewards those who spend more in one order but not as profitable to the customer as the previous method.
  • PRO: More simple than the previous method.
  • CON: It requires more work setting up as you need to create an additional rule for each custom step that you think of.

Ideas on how to make your customers spend points

If earning points is important, spending them is even more. Here is where everything can go wrong or where you establish the perfect balance. It's here where you define how much is one point worth. Here are some suggestions/examples for you to incorporate on your campaign:


Cheap products give away

Generally, cheaper products have larger profit margins. You do not earn a lot selling these products alone and they serve as a complement to other, more profitable products. And these lesser items require no special financial effort to have them indoors so their real cost to you is even smaller. This method will give the possibility for you to work with these products and give them to your customers (yes, for free) at a cost of a bunch of points.

How it Works
  • We'll set a limit to differentiate lesser from greater products (let's say it's 5 dollars)
  • The customer may buy the product regularly or use the points to level the price of the product to zero
  • The ammount of points must be proportional to the final price of the product so that a 5 dollar product costs 5x more than a 1 dollar product
  • Although this can be exclusive for a single section of your catalog (a Give-a-way section, for example) we'll apply it to our full catalog
How to Achive this Example
  1. In Magento's Backend select Customer Rewards > Point Rules > Redemption Rules > Catalog
  2. Click Add New Catalog Redemption Rule
  3. Set the rule active and select the stores it will apply to
  4. In the Conditions tab, add a new 'Price equals or less than 5' so it only applies to 5 or less dollar priced products
  5. Below, in the 'Customer Spends Points' group:
    1. Select 'Spends X for every Y dollar amount in price'
    2. Put the number of points per dollar in 'Points Amount (X)' - 1000 points for example
    3. And set 'Monetary Step (Y)' to 1
  6. In the Actions tab:
    1. Select 'To Percentage of Original Price'
    2. In the 'Discount Ammount' set it to 0 (zero) so that it means 0%
  7. Click 'Save and Apply' and your done!
Advantages
  • Free things always make you fall in client's good graces
  • Easy to setup and the risk is minimal

Percentage discount to whole cart

You can give your customers the chance to lower the price of their cart by applying, at their discretion, a global percentage discount.

How it Works
  • The customer may apply a discount to the whole cart just by spending some of his/her prices
  • It's really simple for the customer to understand it and for you to control it
  • The amount of points must be variable and follow the sub-total of the cart
How to Achive this Example
  1. In Magento's Backend select Customer Rewards > Point Rules > Redemption Rules > Catalog
  2. Click Add New Cart Redemption Rule
  3. Set the rule active and select the stores it will apply to
  4. In the Conditions tab, select 'For every Y amount spent, deduct X points'
  5. Put one (1) in 'Monetary Step (Y)' and define the ratio you will be using by typing the amount of points in 'Points Amount (X)'
  6. In the Actions tab:
    1. Select 'Percent of Price Discount'
    2. In the 'Discount Ammount' set it to 5 (five) so that it means 5%
  7. Click 'Save and Apply' and your done!
Advantages
  • Gives you control because the points needed to apply the discount are proportional with the cart sub-total
  • Simple to understand as it resembles the concept of a common sale

Still need help? Get Help Get Help