How to Setup a WooCommerce Rewards Program in Minutes

In the competitive world of e-commerce platforms, acquiring a new customer can cost five times more than retaining an existing one. Many WooCommerce store owners focus heavily on ad spend to drive new traffic, only to see those customers purchase once and never return. The solution isn’t always a bigger ad budget; it’s building loyalty.

This is where a WooCommerce Rewards Program becomes a critical tool for sustainable growth. It’s a marketing strategy designed to incentivize repeat purchases, encourage customer engagement, and turn one-time buyers into long-term brand advocates.

However, setting up WooCommerce extensions can feel complex. Which plugin should you use? Should you offer points or referral bonuses?

This guide will demystify the process. We will explore why you need a rewards system, compare the two main types, and provide a step-by-step guide for setting up the best rewards program for WooCommerce based on your store’s specific goals.

The Core Benefits of a Rewards Program in WooCommerce

Integrating a rewards program WooCommerce stores can use is more than just giving away discounts; it’s a strategic investment with measurable returns.

• Boosts Customer Retention: A loyalty program gives customers a tangible reason to return to your store instead of turning to a competitor. The accumulation of points or the promise of a future reward creates a “switching barrier” that builds lasting relationships.
• Reduces Customer Acquisition Cost (CAC): A refer-a-friend program transforms your existing customer base into a low-cost marketing team. Word-of-mouth referrals are highly trusted and convert at a much higher rate than cold advertising, directly lowering your CAC.
• Increases Average Order Value (AOV): You can design your program to reward specific behaviors. For example, offering bonus points for spending over a certain threshold ($50) or offering free shipping after redeeming a reward can effectively “upsell” customers, encouraging them to add more to their cart.
• Builds a Brand Community: A rewards program makes customers feel valued and part of an exclusive club. This emotional connection fosters a stronger brand community, leading to more user-generated content, positive reviews, and active brand advocacy.

Choosing Your Strategy: Points vs. Referrals

Before you choose a plugin, you must decide on your primary goal. Most rewards programs fall into two categories:

1. Refer-a-Friend (Referral) Program:
   • Main Goal: Customer Acquisition.
   • How it Works: It rewards your existing customer (the Advocate) for referring a new customer (the Friend). Often, both parties receive a reward, such as a $10 coupon, to incentivize the action.
   • Best For: New stores focused on growth or stores with highly “shareable” products.
2. Points-Based Loyalty Program:
   • Main Goal: Customer Retention.
   • How it Works: Customers earn points for various actions—making a purchase, leaving a review, or even on their birthday. These points can then be redeemed for discounts, free products, or other perks.
   • Best For: Established stores that want to increase the lifetime value (LTV) of their existing customers.

So, what is the best rewards program for WooCommerce? The answer depends on your goal. For maximum impact, you can even combine both. Let’s look at the tools to achieve this.

We will focus on two outstanding plugins that simplify this process: RewardsWP for a focused referral system and Loyalty Program by Advanced Coupons for an all-in-one points and referral solution.

Method 1: Launch a Refer-a-Friend Program with RewardsWP

If your main objective is to get new customers through word-of-mouth, RewardsWP is the ideal solution. It is lightweight, incredibly easy to use, and focuses on doing one thing perfectly: managing referrals.

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Step 1: Install and Activate RewardsWP

First, you must purchase and download the RewardsWP plugin from its official website. Once you have the plugin file, navigate to your WordPress dashboard.

1. Go to Plugins > Add New > Upload Plugin.
2. Choose the RewardsWP .zip file and click Install Now.
3. After installation, click Activate Plugin.
4. A new ‘RewardsWP’ menu will appear. Go to RewardsWP > Settings and enter your license key (found in your purchase email) to connect your store. The plugin integrates with WooCommerce automatically.

Step 2: Configure Your Advocate & Friend Rewards

This is the most important step: deciding what the rewards will be.

1. Navigate to RewardsWP > Settings > Referrals.

2. Toggle the Program Status from ‘Inactive’ to ‘Active’.

3. You will see two sections: Advocate Reward (for your existing customer) and Friend Award (for the new customer). It is highly recommended to reward both.

4. Click ‘Add Reward’ for the Advocate. You can choose from:

• Amount discount (e.g., $10 off)
• Percentage off (e.g., 15% off)
• Free shipping
• Free product

5. Set the Reward Value, any Minimum Order Amount to use it, and an Expiration period. Click ‘Add Reward’ to save it.

6. Repeat the exact same process for the Friend Award.

A simple and effective strategy is: “Give $10, Get $10.” This is clear, valuable, and easy for customers to understand.

Step 3: Customize the Customer-Facing Widget

RewardsWP adds a floating widget to your site that logged-in customers use to get their referral link.

1. Go to RewardsWP > Settings > Rewards Widget.

2. Set your Brand Color to match your store’s design.

3. Choose the Display style (Icon, Text, or Icon with text).

4. Under Sharing Options, you can enable sharing via X (Twitter), Facebook, and Email.

5. Pro Tip: Customize the default Email subject and message to match your brand’s voice. Use the available tags like {referral_link} to automatically insert the unique URL.

6. Click Save Changes.

Step 4: Test Your Referral Program

Before promoting your new rewards program WooCommerce system, always run a full test.

1. Log in as a test customer and copy the referral link from the widget.
2. Open an incognito or private browser window.
3. Paste the link and simulate a new ‘Friend’ making a purchase. Verify their discount (Friend Award) is applied at checkout.
4. Once the test purchase is complete, check the ‘Advocate’s’ (your test customer) email inbox. You should receive a notification with your reward.
5. Try to use the Advocate’s reward on a new order to ensure it also works correctly.

Method 2: Build a Full Points-Based WooCommerce Rewards Program

If your goal is long-term retention and rewarding a variety of actions, you need a comprehensive points-based system. The Loyalty Program by Advanced Coupons plugin is the best rewards program for this, as it integrates directly with WooCommerce’s coupon system.

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Step 1: Install and Activate the Plugins

This solution requires two plugins to work together: the free Advanced Coupons plugin (for the coupon framework) and the premium Advanced Coupons Loyalty Program add-on.

1. Install the free ‘Advanced Coupons for WooCommerce’ from the WordPress plugin repository (Plugins > Add New).
2. Purchase and download the ‘Loyalty Program’ add-on from the Advanced Coupons website.
3. Upload and activate the premium add-on just as you did in Method 1.
4. Go to Coupons > License and activate both your Advanced Coupons and Loyalty Program license keys.

Step 2: Configure General Loyalty Settings

This is where you define the “economy” of your points system.

1. Navigate to Coupons > Loyalty Program > Settings.
2. In the General tab, set your Points Name. Instead of ‘Points’, you could use ‘Stars’, ‘Credits’, or something unique to your brand.
3. Price to points earned ratio: This is how many points a customer earns per dollar. A common setting is $1 = 1 point.
4. Points to price redeemed ratio: This is what points are worth. For example, a setting of ’10’ would mean 10 points = $1 discount.

Example: With the settings above ($1 = 1 point, 10 points = $1), a customer who spends $200 earns 200 points. They can redeem those 200 points for a $20 discount. This effectively creates a 10% cashback system.

Step 3: Define How Customers Earn Points

This is the fun part. Go to the ‘Points Earning’ tab to reward customers for more than just purchases. You can toggle on rewards for:

• Purchasing products (the base rate you set in Step 2)
• Leaving a product review (e.g., 50 points)
• Registering as a new user (e.g., 100 points to welcome them)
• Completing their first order (e.g., 25 bonus points)
• Spending over a certain amount (e.g., 500 bonus points for orders over $100)
• Shopping during a promotional period (e.g., 2x points during Black Friday)

Step 4: Enable Customer Accounts & Referrals

For a points system to work, customers must have an account to track their points.

1. Go to WooCommerce > Settings > Accounts & Privacy.
2. Uncheck the box for “Allow customers to place orders without an account.” This ensures all buyers create an account.
3. Check the box for “Allow customers to log into an existing account during checkout.”
4. Check the boxes under “Account creation” to allow account creation during checkout.

This plugin also includes a referral module. You can enable it under the ‘Referral‘ tab to award points to referrers, effectively combining both a points and referral system in one.

Best Practices for a Successful Program

Launching your WooCommerce Rewards Program is just the beginning. Use these best practices to ensure it succeeds.

1. Promote Your Program: Your program will fail if no one knows it exists. Promote it everywhere: on your homepage, in post-purchase emails, in your email newsletter, and on social media. Use email marketing automation and post-purchase follow-ups.
2. Keep It Simple: Don’t create a complex system with confusing rules. The value should be instant and obvious. “Spend $1, Get 1 Point” is much clearer than a complicated-tier system.
3. Offer Attainable Value: The best rewards program feels generous. If a customer has to spend $1,000 to get a $5 discount, they won’t participate. Ensure the rewards are valuable and reasonably attainable to motivate participation.
4. Monitor Your Results: Track your key metrics. Are people participating? Is your customer retention rate improving? Is your AOV increasing? Use this data to adjust your reward values and promotions over time.

Your Next Step to Building Loyalty

A WooCommerce rewards program is a powerful, non-negotiable tool for any store serious about growth. It shifts your focus from expensive, one-time acquisitions to building a profitable, long-term community of loyal customers.

Whether you start with a simple refer-a-friend system using RewardsWP or build a comprehensive points-based universe with Advanced Coupons, the time to start is now. Choose the method that aligns with your goals, follow the steps, and begin turning your buyers into your biggest fans. 

If you’re also building educational stores, check out WooCommerce for Education Setup Guide.

Frequently Asked Questions (FAQs)

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