May 19, 2022
How to Set Up a Loyalty Program on Your Shopify Store
A loyalty program is a perfect way to generate value for your customers. A loyalty program typically comes as an application which is both automated and inexpensive as a marketing tool.
Loyalty and rewards programs have proven as some of the most effective strategies for increasing your shop’s revenue and inspiring customer loyalty.
A study shows that 84% of customers said that they are more likely to stick with a brand that offers a loyalty program. And 66% of customers said that the ability to earn rewards and spend them later actually changes their spending behavior.
It’s also well known that it is much cheaper to promote and sell to your existing customers rather than acquiring new ones. Not only are the new clients more costly to get, but they also don’t generate as much money as regular customers do. So investing in loyalty and rewards programs can become an essential part of sustaining your business.
There are tons of apps out there for Loyalty and Rewards programs, so your choice may depend on your specific needs, budget, and preferences. As a good start, however, you can try using Growave (free plan available, paid ones start from $29/month) or Smile (also free plan included, starter plan from $49).
So once you've chosen the app, you need to decide on the type of loyalty program you want. Two of the most common ones are:
- Giving out points through sales. Customers earn these points through purchases and actions they make at your store, and later they can redeem those points for free products, discounts, and coupons.
- Creating a VIP experience for your customers by revolving your program around tiered memberships. This gives your clients the option to earn or redeem points at different ratios. For example, Gold members can earn 20 points for every dollar spent, while Silver members earn 10 points for every dollar.
So, once you've decided on the type of program you want, you can finally start setting it up. Here are 5 things to keep in mind during the process:
1. Keep things simple
In order to make sure that all of your customers understand your loyalty and rewards program try not to overcomplicate it. Otherwise, customers will simply give up on the program and stop using it. You can use a digital customer experience platform to improve customer service to get in touch with them and explain how things will be done.
The main point to consider is that the whole process should be easy enough for your shoppers to understand and participate in. For example. if you give out points to customers after they make a purchase on your website, make sure those points are easy to track and there’s an explanation on how they can redeem them.
2. Introduce personalization
Sending out birthday cards, greeting customers by their name, or sending them a personalized email - such simple steps can go a long way in building your relationship with customers.
So try to always go extra and beyond to show your best customers that you appreciate their business with you, and they’ll be inspired to come shop again.
3. Do the research
The key to the success of any loyalty and rewards program is in the basic knowledge of your target audience. You can't offer them a fruitful deal without understanding first what they want from such a deal.
So from your customers' demographics information to current preference trends, you should collect all the valuable data you can and analyze it. This can be done through direct surveys, quizzes, customers' sign up information, or casual interactions through social media.
4. Set realistic and achievable goals
By this, we mean that your customers should be able to actually gain some benefit from your program. If the points are too hard to achieve or it takes too many of them to get a reward, customers will simply give up on your program, leaving you with a feeling of wasted time and effort.
So to make sure this doesn't happen, offer your customers actionable and achievable ways to earn and redeem points. You can do that by rewarding a variety of actions, such as adding reviews, referring a friend, or subscribing to your blog. While not increasing your sales directly, these actions boost your customer engagement and can therefore be rewarded. And as surveys show, this is exactly what 75% of customers expect from an online store.
Suggested reading: Generate First eCommerce Sales with Facebook Detailed Marketing
5. Keep things varied
There are thousands of different loyalty programs available today, so most of your customers will probably already be participating in several other loyalty programs. To stand out from the crowd, you, therefore, have to make sure your program stays engaging and interesting.
So rather than simply offering discounts, try out a bunch of different rewards as well and see what works for you. For example, you can offer free package subscriptions, backstage events, or even exclusive brand products for your most loyal customers, all can be done with the capabilities of the loyalty program app you are using, go for the one that offers a lot of loyalty customizations. That way, they will feel more valued, which in turn will boost their trust towards your brand and make them more engaged.
As you can see, the steps for building an engaging loyalty program can be pretty simple. Just put some time and consideration into it and try to offer genuine value to your customer and you'll be surprised by how far you'll have gotten.
And if at any point you need some additional help with your program, try contacting us at Growave and we'll support you with any query or problem you might have.
What are Loyalty Programs?
Loyalty programs are apps that easily integrate into your ecommerce store. They offer reward systems that grant shoppers points for their purchases. As these customers continue to shop, they unlock progressively redeeming perks segmented into tiers. Loyalty programs are considered effective customer retention tools.
How do you install a Loyalty Program?
Loyalty programs usually have a short onboarding process that jump-starts your program. Afterward, you have unlimited access to an admin panel to control the details of your program. With Shopify all you need to do is install the app and follow the on-screen instructions. You should expect analytics, branding, emails and multiple other features when you install a loyalty app.
Can you brand your Loyalty Program?
Branding is an essential, all loyalty programs should have the ability to customize your program. This could mean any number of things like, naming your rewards, the rewards you choose or the way the app features in your store. Always opt for a program that offers customizable features.
How do you optimize your Loyalty Program?
It may be worthwhile to assess your customer base and competitors before choosing which rewards to enable. There isn't one clear answer, but depending on your objectives you may find certain rewards more valuable, such review rewards for social proof or follows on social media. You can also control your point values and which products to discount to improve turnover rates. Branding and exlcusivity have shown positive effects on customer interactions. There are multiple ways you can find an advantage.
What are the benefits of Loyalty Programs?
They are linked to lower customer acquisition costs, increased average order value, and lifetime value of customers. They are considered robust ecommerce marketing tools. Loyalty programs are also databases of all your members that can be used in combination with emails to re-market shoppers.
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