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Think of your favorite brand for a moment.
Do they have a loyalty program that you’re a member of?
With more than 90% of companies now having some type of loyalty program, we assume the answer is yes.
Bank of America, McDonald's, Nike, Walmart, Starbucks, Costco, Target, Amazon, Sephora - the list goes on. From banks to fast-food chains, loyalty programs have become popular across all industries.
And why wouldn't it be?
Members of loyalty programs generate 12-18% more incremental revenue growth per year than non-members.
For online stores, the importance of a loyalty program becomes even more important - considering competition is just a click away. 84% of consumers say they’re more likely to stick with a brand that offers a loyalty program.
That means if your brand doesn’t provide customers with added benefits, somebody else will.
And you don't want that to happen.
Studies show that 65% of a company’s revenue comes from the repeat business of existing customers. As an online store, your priority should be encouraging as many repeat purchases as possible. Having a rewarding loyalty program can again help you with that.
A great loyalty program can increase your customer lifetime value, boost customer loyalty, and all-in-all improve the bottom line of your business.
So, what next? Keep reading ahead as we discuss the ins and outs of how to build an effective Shopify loyalty program for your online store.
Benefits of a Customer Loyalty Program
Customer loyalty programs are a marketing strategy designed to turn one-time buyers into repeat customers. Here’s how they can benefit your online store:
Increased Retention Rates
Loyal customers are worth up to 10 times more than their first purchase value.
This means loyal customers not only make repeat purchases, but they often spend more each time.
Your online store needs repeat business to thrive. In fact, 65% of a company’s revenue comes from the repeat business of existing customers.
This is where customer loyalty programs shine.
Loyalty programs incentivize repeat business with points and rewards. This builds a habit of choosing your brand, reducing their chances of switching to competitors.
And once your customers feel valued, 88% of them plan to stay loyal to you, and 83% plan to spend more.
Improved Customer Engagement
Engaged customers are happy customers. Loyalty programs are a powerful tool to keep your customer base interested and interacting with your online store. The program itself becomes an engaging activity.
Customers might be checking their point balance, browsing the rewards options, or looking out for exclusive offers tied to the program. This real-time engagement keeps your store at the top of their minds.
They'll be more likely to consider you when they need something you sell and are more receptive to your marketing efforts. This increases brand loyalty and creates a community of enthusiastic customers around your store.
Brand Advocacy and Referrals
Customer loyalty programs don't just mean repeat business, they can turn happy customers into brand champions. They foster a sense of community and belonging.
Customers who feel valued are more likely to speak positively about the brand, and with 92% of consumers trusting recommendations from friends and family, this word-of-mouth marketing is powerful.
Many Shopify loyalty programs go even further, offering rewards for referrals. This incentivizes customers to spread the word. Research shows that referred customers are 30% more likely to convert than those acquired through other channels. That makes loyal customers who refer others even more valuable.
How to Set Up a Shopify Loyalty Program?
Step 1: Know Your Goals
What are you hoping to achieve with the Shopify loyalty program? A clear goal will guide the design of your program. Knowing what you want to achieve is arguably the most crucial step in setting up a successful loyalty program.
Ask yourself these questions before implementing a loyalty program. Do you want to:
- Increase repeat purchases and customer retention
- Drive sales and boost average order value
- Generate social media buzz and brand advocacy
- Gather valuable customer data and insights
This will also guide the design of your program and the types of rewards you offer.
Step 2: Decide Your Reward Structure
Before you start designing your reward structure, understand what motivates your target audience. Consider demographics, buying habits, and what excites them. For example, if you sell high-end clothing, exclusive product lines or early access to new collections might be more appealing than simple discounts.
Once you have your program's objectives locked in, it's time to design the program itself. The program design acts as the engine of your program. Here are some popular reward options to consider:
- Points-based System: Customers earn points for purchases and other actions, then redeem them for various rewards. This allows customers to choose what they value most.
- Discounts: Everyone loves a good deal. Offer tiered discounts based on spending levels or points earned.
- Exclusive Products or Experiences: Early access to sales and limited-edition products is one of the most important loyalty program features for customers.
- Free Shipping: Online shoppers love free shipping so much that 86% of them would rather abandon their shopping cart than pay shipping. Offer it as a reward for reaching spending thresholds or points milestones.
- Experiences and Perks: Think beyond physical products. Offer rewards like loyalty member-only contests, personalized consultations, or access to exclusive content.
This is what will motivate customers to actively engage with your program. Ultimately, the key is to strike a balance between offering rewards that are valuable enough to motivate participation and keeping your program financially sustainable. Some of the common actions to reward in your Shopify loyalty program:
- Purchases: Classic - reward points or progress for buying.
- Engagement: Go beyond just purchases and encourage other interactions that benefit your brand. Reward them for:some text
- Signing up for your email list
- Leaving reviews on your products
- Following you on social media
- Referring friends (through a referral program)
- Completing surveys or providing feedback
- Milestones: Celebrate birthdays, program anniversaries, and spending achievements with bonus points or rewards.
This variety keeps customers engaged and fosters a deeper brand connection.
Bonus Tips:
- Offer a mix of reward types to cater to different customer preferences.
- Find the right balance between how much effort or spending is required to earn rewards and the value of those rewards
- Choose rewards that support your program's objectives. For example, if you want to drive sales, offer discounts or early access to sales.
Step 3: Choose a Name for Your Shopify Loyalty Program
It’s often said that ‘first impressions are the last impression.’
The name of your Shopify loyalty program acts as that ‘first impression’ for your customers.
A memorable and engaging name can significantly boost program participation. For instance, Sephora's "Beauty Insider" program uses the term "insider" to create a sense of being "in the know" about the latest beauty trends. This name taps into the customer's desire for exclusive information and expertise, making them feel valued.
Here are a few tips you must consider while choosing a name for your Shopify loyalty program:
- Short, easy-to-pronounce names are remembered best.
- Use words that create excitement, exclusivity, or appreciation for your brand.
- Align the name with your brand voice and values for a cohesive image.
- Search for trademarks to avoid legal issues with existing programs.
Step 4: Choose a Shopify Loyalty App
Choosing a loyalty program app for your Shopify store is like selecting the right person for a job. If wrongly hired or selected, your loyalty program might be doomed.
These apps handle the day-to-day operations of your program, making it easier to manage and track customer activity. Look for these features and capabilities while choosing your Shopify loyalty app:
- Program Design: Does the app offer the type of program you want (points-based, tiered, referral, etc.)?
- Reward Management: Can the app easily manage your chosen rewards, including setting point values, redemption options, and tracking inventory for exclusive products?
- Customer Communication: Does the app allow you to send targeted emails and notifications to program members about their points, rewards, and program updates?
- Ease of Use: Choose an app with a user-friendly interface that's easy to set up and manage, even if you're not tech-savvy.
- Reporting and Analytics: Does the app provide valuable reports on program performance, such as customer engagement, redemption rates, and the program's impact on sales?
With over 2,000 Shopify stores already relying on Giftkart’s loyalty app, it's a proven platform trusted by many. On average, stores using Giftkart see an impressive 11% increase in customer retention, highlighting the effectiveness of their program designs and features.
When it comes to choosing a loyalty program app for your Shopify store, GiftKart by Skai Lama stands out as a perfect fit. GiftKart offers a variety of options, including cash-back programs, digital wallets, and gift card programs, providing flexibility to tailor your strategy.
Designed specifically for Shopify stores, it offers a seamless integration experience and a user-friendly interface that has powered over 2,000+ stores to build their Shopify loyalty program.
Install Giftkart and get started with your loyalty program now.
Step 5: Valuing Your Points & Rewards
The point value in your Shopify loyalty program acts as the currency for customer rewards.
It tells how much effort (spending or engagement) is required for a customer to earn rewards, and ultimately shapes how valuable your program feels to customers.
Striking the right balance between a rewarding experience and program sustainability is crucial.
Here's how you can set your point value:
Nordstrom’s loyalty program points structure.
- Fixed Value: Assign a fixed dollar value to each point (e.g., 1 point = $1). This offers simplicity but might not incentivize larger purchases.
- Tiered Value: Offer a higher point value per dollar spent on larger purchases. This rewards customers for spending more.
- Reward-Based Calculation: Divide the cost of a reward by the desired number of points needed to redeem it (e.g., a reward costing 100 requires 100 points, so 1 point = $1). This makes a clear link between points earned and reward value.
Some tips for deciding the worth of your Shopify loyalty program points:
- Set a point value that rewards customers without sacrificing your business's bottom line.
- Understand what motivates your customers - points, discounts, or exclusive access?
- Begin with a slightly lower point value and adjust based on program performance.
Step 6: Create a Loyalty Program Explainer Page
Consider this: A shopper lands at your store and is unsure how your Shopify loyalty program works, what benefits it offers, or how to even join.
A clear and concise explainer page bridges this gap.
Think of it like a shop window for your Shopify loyalty program. It should:
- Grab Attention: Use a catchy headline, captivating image, and bullet points to highlight key benefits like earning rewards and exclusive discounts.
- Show How It Works: Use a table to visually explain earning points, redeeming rewards, and tracking progress.
- Tier It Up: Show program tiers with visuals like a bar chart, outlining point requirements and perks for each level.
- Call to Action: Include a button like "Join Now" to get customers to enroll.
Take a cue from Ulta's "Beauty Rewards" program. Their explainer page uses a clear layout with icons to showcase benefits like earning points for purchases, free birthday gifts, exclusive access, and weekly bonuses.
By creating a similar explainer page for your store, you can effectively communicate the program's value and encourage customers to sign up for your Shopify loyalty program, boosting participation and building long-term loyalty.
Set Up Your Shopify Loyalty Program With GiftKart
Creating a Shopify loyalty program for your store is all about understanding your customers and offering them value that keeps them coming back. It's like giving them little extra gifts every time they shop with you.
If you're ready to take the next step in building customer loyalty for your Shopify store, get started with GiftKart.
With GiftKart, you can set up a Shopify loyalty program in minutes, thanks to its intuitive interface and seamless integration with Shopify. GiftKart offers a range of features to help you create a customized loyalty program that resonates with your audience and drives meaningful results. Start rewarding your customers and nurturing long-term relationships today with GiftKart.
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