How to build an effective points program in 3 steps

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3 steps to build your points program

Step 1 💰 — Decide the value of your points Step 2 ⭐ — Choose how customers earn points Step 3 🎁 — Choose your reward structure

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Step 1: Decide the value of your points

Start by deciding how much value customers will receive back through your points program.

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Aim for 3–10% back in points value

Choose a points value within this range that works for your margins while still giving customers a meaningful reason to participate in your loyalty program.

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Keep a consistent points-to-dollar ratio

Keep the value of your points consistent across your program. A common structure is 100 points = $1 in reward value. For example:

• 500 points = $5
• 1,000 points = $10
• 2,000 points = $20

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Aim for the first reward within 1–3 purchases

Set your earning rate and first reward so customers can reach it after approximately 1–3 purchases. Customers should also need to make at least one purchase before they can redeem their first reward. Keep points from actions like account creation and social engagement below the amount required for your lowest-value reward.

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Step 2: Choose how customers earn points

Once you’ve decided on your points value, start setting up how customers will earn points.

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Where to update

Configure earning actions in Smile Admin: Points → Ways to earn → Add ways to earn. Start with Place an order to set how many points customers earn per dollar spent.

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Offer 3–5 ways to earn

Offer 3–5 ways for customers to earn points, mixing purchase-based actions with other ways to engage. Earning actions can include:

• Placing an order
• Creating an account
• Celebrating a birthday
• Engaging on social media

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Add more ways to earn with integrations

Connected apps can add ways to earn points for actions like product reviews, quizzes and surveys, subscription orders, charitable giving, and purchases at other retailers.

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Consider whether to use points expiry

If you choose to use points expiry, we recommend setting points to expire after 12 months or more of customer inactivity.

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Step 3: Choose your reward structure

Give customers multiple ways to redeem their points.

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Where to update

Configure rewards in Smile Admin: Points → Ways to redeem → Add ways to redeem.

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Choose fixed or incremental rewards

Decide whether you want to offer fixed or incremental rewards, or a combination of both.

• Fixed rewards let customers redeem a set number of points for a specific reward.
• Incremental rewards let customers choose how many points they want to redeem toward a discount.

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Offer 3–5 rewards

Offer 3–5 rewards at increasing point costs. Reward options can include:

• Dollar amount discounts
• Percentage discounts
• Free products
• Free shipping
• Shopify store credit

Use the points-to-dollar ratio you established in Step 1 when setting your reward costs.

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Configure reward restrictions

Decide whether to set a minimum purchase amount for your rewards and whether eligible rewards can combine with other discounts. Learn how to configure reward restrictions.