Written by: Pravin Kamble

From Discounts to Exclusivity - Designing an Effective Customer Loyalty Program for Your Shopify Store

A customer loyalty program can create an uptick in sales, reduce churn, and keep everyone associated with your business smiling and cheerful.

A customer loyalty program can create an uptick in sales, reduce churn, and keep everyone associated with your business smiling and cheerful. Why? Because it is a win-win for every stakeholder. One of the best things about a loyalty program is that it appeases two groups of customers. It encourages new clients to stick around while making sure that the existing customers are valued and appreciated.

Why is a customer loyalty program essential to your Shopify store?

How to create an effective customer loyalty program:

1. Outline your objectives for the program:

Before you start your loyalty program, the first task is to have clear objectives behind implementing it. Is it to reduce churn? Would you like to use it as a lead generation channel by encouraging referrals? Are you trying to offer rewards and incentives to increase engagement? Your objective could be anything, but it is imperative that you are sure about it. The more targeted you are, higher is the probability of the program’s success.

2. Leverage existing data:

Just like any store, you would have a trove of data that is worth its weight in gold. To make your loyalty program an ROI-generating machine, you must leverage different types of data that is available.

  • The data could be any of the following
  • Important dates
  • Purchasing history
  • Wish lists
  • Preferred categories
  • Order value
  • Pages that they follow on ,social media

You will be able to create an excellent loyalty program if you can collate data and find trends or patterns that helps you discover more about your customers. Such a data-driven approach can make you identify the right perks and incentives. When it comes to a loyalty program, the question on your customers’ mind is always going to be, “What am I going to get here?” This is why leveraging customer-related data can be immensely beneficial.

3. Keep it simple:

One of the biggest mistakes that businesses tend to do is overcomplicate the loyalty program. If your customers don’t understand the program, they wouldn’t participate in it.

  • Below are some best practices to make sure your loyalty program is simple
  • Write consistent copy across all channels where you speak about the program
  • Make it easy to signup for the program
  • The program should be easily understood
  • Clearly explain how the rewards can be redeemed
  • Explain when the accumulated points expire

4. Choose the loyalty program type:

We have listed a number of loyalty programs here that can be useful for this exercise. Make sure that the loyalty program you choose is in line with your business offering.

Loyalty Program Type

Points program : Every time a customer purchases, they will get a certain amount of points which can be converted into specific rewards.

Tier-based program : Customers get more benefits as they upgrade their spending to the next level.

Paid program : Here, customers get access to rewards, perks, and offers that are exclusively for them, since it is a paid program.

Ambassador program : You can invite customers as your brand ambassadors. They get access to special rewards in exchange for promoting your brand

Gamified program : There will be different types of gamification techniques that are used to keep customers engaged with your loyalty program.

Partnership program : Customers get discounts in other stores that you have partnered with. It is an excellent way to promote your audience to a different brand.

Charity-based program : Here, customers’ rewards are usually in the form of charitable donations in their names.

Combination : This one is a combination of different types of loyalty programs.

5. Choose the program rewards:

As discussed earlier, the rewards you choose are crucial toward the success of the program. You cannot offer a $5 discount if you sell luxury accessories. The rewards you choose should be commensurate with who you are as a brand, what it stands for, and who it caters to. Conduct focus groups and interviews with your customers to conclude whether you’ve chosen the right rewards.

  • Let’s look at some of the most popular reward types
  • Free products
  • Free shipping
  • Cashback
  • VIP experiences
  • Store credits
  • Gift cards
  • Exclusive access to the latest products
  • Perks on special days like birthdays, anniversaries, etc
  • Early sale access
  • Exclusive community access
  • Partnership perks
  • Limited-edition collab products
  • Donations to charities
  • Experiential rewards

6. Engage with a loyalty program software:

Can you do a loyalty program without the help of a software? Yes.

Is it a wise move to do everything from scratch though? Absolutely not.

Unless you are a business that makes loyalty program software, you are better off engaging with a software like the one offered by 99minds to implement such a program. Most loyalty program software use a plug-and-play model, so if you’ve been wondering whether it would take days on end to set it up, then you are wrong.

Instead of taking manual steps, you can get started within minutes. All you need to do is be prepared with the copy, designs, type of program, rewards, etc. After this, you can sit back and relax. Leave the loyalty program software to do the rest of the work for you. The entire process will be automated.

7. Focus on the delivery of the rewards:

You don’t want someone who has participated in your loyalty program feel that they have been cheated out of the rewards. Not only will this shatter any chances of creating goodwill, but it will also result in them badmouthing your brand in their social circles. Such a situation is not a desirable place to be in.

Make sure that you have a clear structure and process for how you intend to deliver the rewards. If the rewards can be redeemed digitally, ensure that it is automated. Otherwise, tie up with a delivery partner whose only job is to fulfill loyalty program reward deliveries.

8. Promote your program:

Once you have scripted a clear strategy for your loyalty program’s success, the next step is to spread the word about it.

  • Below are some time-tested ways to promote your program
  • Announce your loyalty program on email. Write a series of emails to nurture your customers into becoming a part of it
  • Invest in the services of an excellent graphic designer and a copywriter
  • Use catchy designs on your home page and other relevant landing pages where you focus on the loyalty program
  • Create an explainer video on the program
  • Promote the program on your social media handles
  • Leverage micro-influencers from your niche who have a high engagement rate

9.Analyze and benchmark the results:

Loyalty programs are a high-ROI generating machine for businesses that use them efficiently. To increase its output, you must analyze the results of each campaign and benchmark it for the future. When you keep doing this consistently, you will find out what works and what doesn’t. If you can keep experimenting, you will chance upon strategies that even seasoned marketers would have missed.

Final thoughts:

A loyalty program isn’t a one-time exercise, it is a marketing channel that will keep on giving if you are in it for the long term. After its implementation, you should consistently make tweaks based on its performance and how customers feel about it. Once you do this consistently, you will get excellent results from your loyalty program.

If you are looking to upgrade your Shopify store with an effective loyalty program, check out what 99minds has to offer. It is an all-in-one promotion and loyalty program for businesses. Get in touch with us and allow us to show you a roadmap for your store with our loyalty program in it.