Shopify Loyalty and Rewards Program

Your online store looks to have repeat customers and continued traffic and sales growth. This can only happen if your brand and customer base sees growth through customer retention and great customer support. Social media has a way of spreading the great experiences they have had with your online store, so friends and families come and check out what it is all about. Having a loyalty program within your Shopify Store is important (over 90% of online stores have some type of loyalty program) to build your brand and keep your customers engaged with a rewards program.

Marketing efficiencies

Customer acquisition is hard work and costly, while retaining customers not only saves your marketing budget but usually helps you grow your brand. Assisting customers to engage with you over a period of time will improve their customer experience as they usually give you feedback on customer reviews or with customer support. By increasing the customer retention rate, selling products becomes frictionless since trust and your shipping deliveries have proven that what they saw as the value in your brand satisfied their needs. This in turn usually gets shared on social media platforms for new customers to get curious and read what customers have to say. This retention strategy can grow your repeat purchases out of your existing customers as loyalty points reward those that convert to your online store.

Type of reward Programs

There are various types of loyalty programs, and choosing the right one can make a difference in how the audience will value and want to register for it. It isn't enough to just do an Email marketing campaign to get registration, you have to demonstrate the value of keeping the clients engaged.

Point-based loyalty: Most common types of reward programs. Ranging from purchase points to gamification, there are various ways to accumulate points, which reward you with discounts, gift cards, free shipping, early access to sales or new products, and free products.

Tiered Loyalty: A membership-based program where clients are ranked by participation into higher tiers to get better rewards (Ex. Admirer, Enthusiast, and Devotee). There are usually tasks to do, or accomplishments to define each tier, and usually uses the point-based loyalty counts to measure your engagement. At the top tier, exclusive and higher discounts and benefits, they receive for participating and engaging with your program and brand.

Paid Loyalty: Paid or fee-based loyalty. This is where clients pay to get into the program such as Amazon Prime, or Costco. Being part of a community and getting the perks of access to products and services, or enhanced services such as same-day or next-day shipping is part of the system. There are three elements that are core components to them:

1. The benefits outweigh the fees.

2. Members stick around for more experiential advantages such as members-only content. 3. Engagement levels are high through a continuous flywheel of activity - where the user engagement is high and rewarding.

Value loyalty: A deeper level of loyalty such as donations to charities and organizations. Often there are a variety of organizations so that clients can align themselves to their values and as they engage, they contribute to their favorite charity. Usually, this loyalty type is combined with a self-rewarding loyalty type so that as they reach benefits for themselves, the value loyalty side rewards the charities.

Shopify Loyalty Apps are plentiful and very feature-rich. Your Shopify store will have greater engagement and higher basket values as customers get enticed to return and see benefits in participating. To assist in the first conversion, achieving a first reward status such as free shipping for their first order by having them share your store on their social media, setting up their birthday, and subscribing to their newsletter is key to getting that first purchase. Once the first purchase experience is out, reward them for their first review and have them share it on their social media platforms will create more engagement and participation. Thinking of all the logical steps from a user's customer journey and customer experience will assist in seeing how one can build up your points and have appropriate rewards for their efforts.

Examples of good Shopify Loyalty stores

DSW Shoe Warehouse - they reward customers points for every purchase, and they unlock additional benefits as they spend more and earn more points. The level of Email personalization has added to the loyalty program and has made the combination extremely successful.

Starbucks - It has an app that assists in collecting "stars" where all purchases use the app to collect the purchase patterns and type of product they consume. Locations, seasonal favorites, and time of purchases allow the marketing team to personalize promotions and rewards for continued engagement.

Amazon Prime - For a flat annual fee, Amazon Prime offers free 2-day shipping on millions of items, prime day sales, and Amazon streaming service as the key perks of their loyalty program.

Northface - Being a lifestyle company, they accumulate points based on curated experiences such as events, accomplishments with their brand, as well as purchases. The rewards can be discounts on trips, classes and seminars, and experiences.

Conclusion

Most if not all online stores should consider a loyalty program. While bigger companies use these programs to retain customers, smaller businesses can use this to grow their customer base and add uniqueness to their brands. In some ways, you are taking your marketing budget and putting it towards your existing customers for them to do your advertising through their good experiences. This is why it is important to reward customers to spread the word about your brand and the experience they receive through your services. Adding a Shopify Loyalty App to your online store is quite easy, defining the rewards is also pretty simple - what is more challenging is the attribution of the points and monetizing the rewards to the value the company would benefit from. Is referring a friend worth 250 points or 2500 points? This does get tricky. We hope this helps get your business to enhance its engagement and see improved conversions through these programs. Feel free to give us a shout at wish@thegenielab.com