Loyalty Programs Explained

July 29, 2022
What is a Loyalty Program

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Loyalty Programs are simple apps that are installed into your online store that automatically create loyal customers. They are generally built by software companies and are one of the best tools in ecommerce because of how effective they are. They are simple apps that act as additions to your online store.

This article will go over how they work, the things to avoid and what to expect with a high quality app.

Lets begin with the sort of apps that you should steer away from.

Loyalty Programs to Avoid

Signs that you should choose another App?

Loyalty Programs are well regarded, often named excellent engagement tools and great for building relationships. But what sort of warning signs should we look out for when exploring our options and how do we know when we have the right option?

This article is all about identifying weaknesses and identifying the most important things for every loyalty program to have.

The first and most important consideration to make before committing to a loyalty program is whether your niche is suited towards Loyalty Programs. Factors like the size of your target demographic, product and business model all play important roles in determining the underlined question as well. 

Loyalty programs provide rewards in exchange for interactions, utilizing discounts and cumulative spending as a means of providing progressively rewarding tiers. They are made primarily for relationship building and accumulation of long term users. 

Important Questions to Ask:

Is your niche or segment elastic enough to warrant discount promotion?

What are the qualities of your product?

Is it possible to see repeat customers?

Is your product quickly consumed or does it require upkeep?

Is your product subscription based?

What have your customers said about your product, what are your reviews like?

Understanding Loyalty Programs

Loyalty Programs are Liabilities

It is very important to know that all loyalty and rewards programs that offer any discount or point based promotion are considered liabilities because they have a financial value to them. Whenever a customer redeems a reward it cuts into your earnings and may affect your bottom line. Part of the process of integrating a loyalty program is therefore about financial structure and managing how rewarding you want the program to be. Needless to say, the more rewarding the program is, the more influential it is over the customer's purchasing decision.

Educating your Customers

Needless to say, there is no loyalty program unless your customers are aware of the details. Part of the challenge of marketing your business is driving engagement with your website, reducing bounce rates and increasing time spent at your website. This means that customers are actually aware of your store's qualities, that they are attentive and that they have purchase intent. Visitors are not necessarily readers and readers are not necessarily buyers. Loyalty programs must first be understood, if the messaging is clear enough it may also affect overall brand awareness. Under these terms creative loyalty programs have the potential of increasing your engagement rates. Top programs will often create entire pages for you that describe how these programs work.

Gathering Actionable Data

All loyalty programs must have an analytical section that can organize and feed information.This information must be clearly depicted and reflect the performance of your program. This information can be used to drive managerial decisions and aid in setting new information based objectives.

Data management

A major chunk of what loyalty programs are is data, you should expect some sort of analytical section that feeds back information. Along with this analytical section, make sure that you have the ability to import and export your information so that your history is not lost when transitioning between other apps or programs. Understand that registrations, subscriptions, sales data, and any other information that your loyalty program may generate has a value. Reviews and contact details are an example of high impact data that can set back your business if lost.


Every integration has unique qualities that are based on the code behind the scenes. Understanding the logic of any program is part of the challenge of finding a sustainable solution. Make sure to observe the functionality of your loyalty program, because a poorly built program will yield no dividends. Consider not only how difficult it is for you to control the program, but also how difficult it is for your customers to use it. The first thing that you encounter with any installation is the actual integration process. A smooth transition means that there is a clear set of steps defined by your service provider. When trailing any app make sure to walk through the steps your customers would typically go through to identify any possible hiccups.

Customer Service

Customer service is a surprisingly important factor to consider. Your loyalty program must have a dedicated team available to resolve any issues that you may have. It is worth asking what sort of additional services they may have that could alleviate some of the headache of setting up your program. What's also notably important about good customer service is “up time”. It is very important to keep your app running at all times and having a team on standby in case you experience any issues.

The Control Center

Just like any high performing app, functionality and features truly define their value. The first thing you do is always explore the administrative panel or the control center. As a manager you will be spending the bulk of your time in the control center implementing any changes to your program. It’s important to be comfortable with the controls before settling in. You should expect a short learning curve, shorter if the panel is well designed.The customer-facing component of your app has more to do with how your actions are viewed by the customer, while the back end is all about the finer details. A more advanced Loyalty Program will have an abundance of features to explore, perhaps something you didn’t expect.


There is no practical purpose in gathering contact details if there is no follow up feature. The highest performing loyalty programs are all expected to have a means of communicating with the client after registration. This is typically done through email, sms and push notifications. Communicating with customers that have willingly provided contact details is one of the cheapest and most effective forms of marketing available. Make sure that you have the ability to build custom templates, include promotional offers and automate these emails for hassle free re-engagement. 


Customization can mean a few things. The first is the ability to brand your loyalty program. The second is the actual financial structure of the program. And the third is the sort of actions that you can reward. When trying to understand the quality of your loyalty program, start by looking for limitations in functionality. The goal is to have the freedom to build a highly engaging and adaptive loyalty program that is based solely on your needs and not the limitations of your app. Loyalty programs are best described as being versatile, whereas you can reward a broad variety of actions like follows, likes, subscriptions, reviews, spending, referring, gifting etc.

Social Media Integration

A healthy loyalty program will have the ability to involve your other marketing channels into your e-commerce store. You will generally have a few options available to you. Growave as an example makes it very easy to link your Facebook Business Account to your Shopify Store and seamlessly display your products in Instagram posts.

Loyalty Programs are simple integrations that pack a punch, they usually come with a free trail which is perfect for trail and error. In general, Loyalty Programs are an important addition to ecommerce businesses for their ability to deliver value on a consistent basis. It is high recommended that you implement one into your ecommerce business. Growave is a perfect example of a impactful loyalty program that can transform your Shopify Store.

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Frequently asked questions

Are Loyalty Programs profitable?

While there is no definitive answer, industry figures suggest a clear improvement in engagement rates and customer lifetime value. Keep in mind that points have a financial value that affects your bottom line. There is a balance between point value and their cost.

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 Loyalty Programs look on your website?

Loyalty programs can vary greatly, from branding to rewards but the features are fairly similar. Growave as an example, has a widget that pops up when clicked and the ability to create seperate pages with FAQ's. You should also expect the ability to customize your program to match you brand.

Does Growave offer free trails?

Promotions varry from time to time. Growave currently offers a 30-day free trail on all plans and an generous annual discount.

Does Growave have a Demo Store?

Growave has a demo-store with real examples of how each app works and gives you some context to compare with. All the features you find in the demo-store can be implemented in your own store.

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