How to design a high-performing loyalty program for your Shopify store: essential tips & strategies

If your Shopify store struggles to find loyal customers and increase loyalty from existing ones, it’s time to consider setting up a robust loyalty program. Implementing a successful rewards program can help you boost customer engagement and improve their buying experience by providing them with exclusive perks such as discounts, points, activities, or something even more creative.

With the right strategies in place, your Shopify loyalty program has tremendous potential to generate significant revenue for your shop.

In this post, we’ll explore how you can craft an effective loyalty program for your Shopify store that will reap long-term results.

What is a loyalty program?

Many businesses offer loyalty programs to reward and incentivize their customers for continued patronage. In essence, loyalty programs are designed to give customers something extra for the time and money they invest in the business, making them more likely to return again and again.

The rewards of loyalty programs vary by company but can include:

• Discounts on products or services.
• Free or reduced-cost shipping.
• Access to exclusive offers.
• Gifts.
• Priority service.
• Membership perks.
• Even an invitation to exclusive events.

The state of loyalty programs for Shopify stores

Loyalty programs for Shopify stores have seen a significant surge in popularity over the last few years. They are becoming increasingly attractive for customers and merchants, as loyal customers often spend more money per purchase and shop with the same store more often than non-loyal ones.

Research conducted in 2020 showed that over 70% of customers would consider a loyalty program when purchasing , indicating the importance of loyalty programs today. A well-thought-out loyalty system can help Shopify stores stand out from competitors and build lasting relationships with customers, while encouraging frequent purchases or returning visits.

Considering this potential, it’s no wonder that Shopify has recently incorporated powerful tools for merchants to efficiently set up interactive rewards systems for their customers.

And the stats from LoyaltyLion’s Shopify merchants back these claims up. Some of the successes our users have seen include the following:

• 3x higher repeat purchase rate from loyalty program members (first to second purchase)
• 1.5x higher average spend from loyalty program members than non-members
• 67% increase in member spending by loyalty program members compared to guest visitors

Why your Shopify store can’t thrive without a loyalty program

A Shopify store can’t thrive without a loyalty program because it is the fundamental key to acquiring and keeping customers, boosting customer engagement, and growing revenue.We might sound like a broken record, but acquiring new customers is increasingly expensive .

With acquisition costs becoming increasingly expensive and growth potential limited with “one and done” customers, establishing a loyalty program can help you gain an edge over your competitors. Loyalty programs offer added benefits for customers who keep coming back; this incentive encourages them to shop more often and build long-term relationships with your brand.

Not only does this increase the chance of repeat sales, but it also encourages higher spending with each purchase. Studies have found that loyal customers spend anywhere from two to ten times more than new customers over the course of the year. As such, having a loyalty program helps maximize revenue generation over time by rewarding shoppers for continuing to shop at your store instead of going elsewhere.

Additionally, seasonal and social trends can significantly impact the annual performance of Shopify stores. With a loyalty program, you can ensure that your store remains competitive throughout the year by providing a steady and evenly-spread flow of personalized rewards alongside the bigger occasions, such as birthdays, holidays or anniversaries.

This helps boost engagement among current and potential customers while also helping your business capture more revenue during the slower shopping periods.

How to set up your loyalty program on Shopify

Setting up a loyalty program for your Shopify store doesn’t have to be a hassle. Here’s how you can start a loyalty program for your Shopify store.

Identify goals, objectives & timeframes

Before setting up a loyalty program, you need to identify what you want it to accomplish. Do you want customers to purchase more frequently? Increase their average order size? Refer more customers? Understanding your goals will help guide the design of your loyalty program and ensure it meets those objectives—as well as driving results for your store.

Decide on your rewards structure & points

Once you clearly understand what goals you’d like your loyalty program to achieve, it’s time to decide which type of rewards program will best meet those objectives. There are generally four types of reward programs: points-based rewards programs, tiered rewards programs, tiered discounts programs, and referral programs.

• Points-based rewards allow customers to earn points with each purchase they make, which can be redeemed for prizes or discounts

• Tiered rewards give progressively impressive perks and prizes as customers reach different levels; tiered discount programs offer discounts based on how much customers spend

• Referral programs reward customers when they refer other people who then make purchases from your store

Choose the right loyalty platform

Next, merchants must choose a platform where customers can enroll in the loyalty program. And there are lots of Shopify apps dedicated to loyalty and rewards. There are many providers out there that offer both free and paid options, so merchants should research these before making a decision.

To make the research process easier, we recommend our solution, LoyaltyLion .

Implement the loyalty program

Once the platform has been chosen, merchants must design their loyalty program and create all necessary graphics and copywriting materials for promotion. Merchants should pay attention to detail when creating a loyalty program to ensure that customers understand how it works and what benefits they can receive from participating.

Get the word out about your new loyalty program

Promoting a loyalty program for Shopify stores can effectively increase customer engagement and encourage repeat purchases. Loyalty programs are prevalent; research shows that the average shopper is enrolled in 16.7 loyalty programs worldwide . Here are some tips on promoting a loyalty program on your Shopify store:

• Social Media Platforms: One of the best ways to get your loyalty program out there is to create posts and content on social media. You can use unique hashtags related to your program and content, such as images, videos, and stories from loyal customers. Additionally, you should try creating Instagram Ads or paid campaigns on various social platforms.

• Sign-Up Page: Make sure you have a post-purchase sign-up page where customers can quickly join your loyalty program. This should be linked from your checkout page or other places on your site so that customers know about it and can quickly sign up.

• Product Descriptions & Landing Pages: Include information about the loyalty program in product descriptions and create a dedicated landing page so customers can learn more about it. This page should include details such as how they earn points, what kind of rewards they can get, and how they can redeem them.

• Email & SMS Marketing: Email marketing is another excellent way to promote your loyalty program. Let current customers know about the benefits of joining by including information at the bottom of each email or sending out monthly newsletters with updates on new offers and rewards. You could also consider using SMS marketing strategies like automated “welcome” messages when someone joins or promotional messages when customers reach certain milestones in the program.

• Influencers & Cross-Promotion: Get influencers involved with your loyalty program by having them share stories, photos, or videos showcasing their experience with it. Consider partnering with other brands to do cross-promotions where both companies benefit from having shared customers enter their stores or websites.

• Onsite Signposting: Finally, make sure you signpost your loyalty program throughout different areas of your website, so people are aware of it when they arrive at different pages during their shopping journey. For example, add banners promoting the program across crucial pages such as product pages and homepages, pop-ups appearing when customers land on specific pages or take certain actions like adding items to their cart.

Track results & improve your loyalty program over time

You have to optimize your loyalty program over time as you gain more insights into your customers’ behaviors and preferences. Regularly review performance metrics such as customer engagement levels and redemption rates to ensure that your program runs smoothly and provides value to customers and your business. Adjust points values or reward offers as needed to increase participation in the loyalty program.

Additionally, consider introducing new offerings such as exclusive content or special promotions for members of your loyalty program to differentiate from competitors and foster continued customer engagement.

Finally, once your Shopify store’s loyalty program is set up and running smoothly, don’t forget about measuring its performance over time so that you can make sure it is performing as expected—and optimize its performance if needed.

Use analytics data such as points earned per transaction or the total number of referrals generated by existing members—as well as qualitative feedback from participants—to gauge whether the overall objectives are being met, and fine-tune things if necessary (or introduce new elements). Doing this regularly will help ensure that your Shopify store’s loyalty efforts consistently deliver maximum return on investment over time!

To learn more about how LoyaltyLion can grow your Shopify store, request a demo to book a call with our team.