How a Great Customer Loyalty Program Can Boost Your Shopify Store

A Loyalty Program can help you build relationships.

How can you guarantee that your ecommerce business will be successful? Spoiler alert – you can’t. There are over 1 million Shopify stores around the world, including well over 100,000 in the UK alone (and that’s just one ecommerce platform). The best way to succeed is to somehow differentiate your business from that of your competitors. 

Some companies may try to sell themselves based on their tightly-run logistics and guarantees that orders will arrive on time and hassle-free. Others may focus on the high quality of their products or their stellar customer service. All of these are good strategies and important for any business to have. But, what every business truly needs is a strong customer base. Without customers, you can’t have a business at all. 

So what’s the best way to differentiate yourself in a way that attracts and keeps customers? A loyalty program! Read on to learn more about loyalty programs and why they are essential for any Shopify – or other ecommerce platform – users. 

What is a Shopify Loyalty Program?

A Shopify loyalty program is a way to offer visitors to your Shopify store rewards and incentives the more that they purchase. You can choose from a vast array of types of rewards and structures of loyalty programs, with the overall goal being incentive for customers to keep coming back to your store instead of going to competitors.

An example of a typical loyalty scheme is a simple punch-card in which for every 9 purchases, the 10th one is free or heavily discounted. A more complex loyalty program could involve allocating a certain number of points based on the amount of money spent. Once a milestone level of points is reached, new discounts or other rewards are unlocked. 

Why are Loyalty Programs Necessary?

Among the many challenges that business-owners face is customer retention. With 20% of customers providing 80% of revenue, it is worth putting in the effort to keep this top-tier level of customers happy and returning to your store over and over again. 

There are two major barriers that can make this difficult:

  • Maintaining Customer Engagement – ecommerce is a fairly transactional business with people purchasing what they need and then moving on. It can be difficult to engage customers and build an ongoing relationship with them, but this is a crucial part of being able to retain customers.
  • Discount Fatigue – today’s customers are extremely demanding and savvy with their expectations often exceeding the level of service that many stores and brands offer. It’s not enough to offer the same standard discounts that most stores are offering, you need to always find something new and unique which is very hard to do. 

There are a variety of strategies that businesses can employ in order to improve their customer retention, with one of the strongest being the implementation of a loyalty program. Such programs provide ways to create new touchpoints with customers that are not only transactional as well as offering unique and personalized rewards. 

Benefits of Loyalty Programs 

Companies have been reaping the benefits of loyalty programs for almost 100 years. Way back in 1929 during the Great Depression, Betty Crocker introduced the first loyalty program in which customers could collect “box tops” and trade them in (by snail mail!) for discounts and rewards.

Obviously, with huge advances in technology since then, loyalty programs have become easier to use for customers and businesses alike. When you add a loyalty program to your Shopify business, you can expect to see the following benefits:

Stronger Customer Relationships

Relationships are built on trust and loyalty. When you provide opportunities for customers to engage with your business on an ongoing basis, you are developing a relationship with them that will pay you back in dividends. 

Rather than just constantly asking customers to complete a transaction and give you their money, you are creating a give-and-take two-way relationship in which you also give your customers something. Whether it is a special discount on their birthday or a reward for returning to your store five times, you can create ways for your customers to feel connected.

Improved Customer Experience

According to McKinsey, 71% of customers expect a personalized shopping experience and 76% are frustrated when faced with a non-personalized experience. With a Shopify loyalty program, you can collect data about your customers’ behaviors and learn their habits and preferences, making it easy to customize and personalize marketing campaigns to ensure that they see the most relevant offers. 


As HubSpot defines it, “customer loyalty is a customer’s willingness to repeatedly return to a company to conduct some type of business due to the delightful and remarkable experiences they have with that brand.” There is no doubt that providing the best possible experience for your customers will keep them coming back to you over and over again. As part of the customer experience, it’s important to ensure that your loyalty program is easy to use and well-run.

Increased Sales

As part of your Shopify loyalty program, you will include rewards and incentives that your customers just won’t be able to resist. And, in order to get these rewards, they will need to make additional purchases which will drive up your sales numbers. Using your loyalty program to create an air of exclusivity can also be a strong motivator. For example, offering early access to new products or discounts only for loyalty members. 

Your sales will also see an increase as loyalty program members will be encouraged to make return visits and existing customers have a 60-70% chance of making a purchase as compared to the 5-20% odds of selling to a new customer. You can also use a loyalty program to incentivize customers to increase their average order value (AOV). Just making a small additional purchase can be significant motivation to help customers reach a new goal or membership tier. And these small amounts can make your sales numbers add up quickly. 

Decreased Acquisition Costs

It’s no secret that retaining customers is cheaper than acquiring new ones, but did you know that a loyalty program can also help decrease the acquisition costs of new customers too? Existing customers who are members of your loyalty program can do the job of attracting new customers for you.

Because today’s buyers trust word-of-mouth marketing more than any other type, when their friends and family rave about your business’ loyalty plan they will be quick to join as well. You’ll be able to gain more new customers without embarking on an expensive marketing campaign. 

Compliance

With regulators cracking down on privacy rules, it’s getting harder for businesses to reach out to customers and potential customers. The GDPR in Europe and the Data Protection Act in the UK can prevent or limit your ability to communicate with customers without their explicit permission.

When a customer signs up for a loyalty program, they are giving their consent to receive communications from you. This means a direct line of communication that will enable you to send personalized messages with enticing offers without fear of breaching any regulations.

Differentiation

The ecommerce market is highly saturated and crowded, but a Shopify loyalty program gives you the opportunity to differentiate yourself. Check out what your competitors are offering and customize your loyalty program to be even better than theirs.

Now is your chance to study your customers’ behavior, learn their preferences, and give them the loyalty program of their dreams!

Get Started Now

Above all, your customers are human beings and will naturally make decisions based on their own best interest. If you have a loyalty program, but it doesn’t meet their needs, they will abandon you and find another provider with a better loyalty program. So, it’s not enough to just offer a loyalty program, it has to be a good one.

This means creating a Shopify loyalty program that offers the types of rewards that your customers want that is as personalized as possible. The best way to do this is by using a reliable loyalty program software that can make the entire process streamlined and easy, setting you up for success.

Ready to improve your customers’ experience and increase sales? Contact us to set up a Loyalty Dog demo!

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