Written by: Mrudul

How to implement an effective customer loyalty program into your Shopify store

Being a part of an exclusive community is a bragging matter for everyone. People love to be a part of clubs or places which cannot be accessed by everybody. This is why customer loyalty programs are all the rage. They make you feel as if you are a part of royalty.

Being a part of an exclusive community is a bragging matter for everyone. People love to be a part of clubs or places which cannot be accessed by everybody. This is why customer loyalty programs are all the rage. They make you feel as if you are a part of royalty.

The eCommerce market is cut-throat and punishing. You cannot standby when your competitors use the right tools and techniques to get ahead. Here’s an interesting statistic that shows why it is a no-brainer to invest in a loyalty program for your Shopify store. A McKinsey research says that paid members of loyalty programs are 60% more likely to spend on the brand post-purchase, while the number is 30% for free members. The gist from the above stat is that loyalty programs are crucial to fatten your bottom line. Add this one to the mix– 84% of customers are more likely to stick with a brand that offers a loyalty program. Now you know why customer loyalty programs are a must.

What is a loyalty program?

Incentivizing customers for staying with your business is one of the easiest ways to make them feel appreciated and valued. Loyalty programs are structured in such a way that your most loyal customers are floored with rewards, perks, and experiences that will bring them closer to your brand.

Keeping your existing customers happy with you is pivotal since it is 5-25x times more expensive in acquiring a new customer. If you create a well-structured loyalty program, you can expect higher spends by 15-25% annually from them.

How to implement effective loyalty programs in your Shopify store:

Setting up a loyalty program that drives ROI isn’t as complex and technical as you might think. Thankfully, there are software products that help you set up a program from scratch. Let’s look at how to implement customer loyalty programs in a step-by-step manner.

  • Determine your objectives:
  • The most important aspect of creating a successful loyalty program on your Shopify store is to determine why you are doing so. Are you looking to reduce your churn rate? Do you want referrals from your existing customers? Are you trying to reach out to a newer audience? Do you want to make your customers feel appreciated? The answer could be anything. You must have clarity on what it is that you want, as it will help you choose the right steps to achieve them.

  • Find your ideal customers:
  • Knowing who you plan to sell to is as important as determining why you are selling it. One of the most important marketing strategies to use is finding buyer personas. A buyer persona is a fictional representation of your most ideal clients. It is arrived at based on research and data about your existing and old customers, including details from other sources.

    Deep discounts will work in a niche where the customers are happy to pay less. You cannot use the same tactic if your customers are from an upscale neighborhood and are happy to pay a premium to get the best service. This is where understanding your ideal customers or buyer personas makes all the difference.

  • Choose the right loyalty program tool:
  • If there is a plan of action that can make or break your loyalty program, it is in the software that you use for it. You cannot choose a loyalty program tool as an afterthought. It must involve a thorough understanding of how they function and what can be done with it. Don’t choose a tool randomly as this can seriously affect the results of your loyalty program.

    • Below are the key features of a loyalty software
    • Should be easily integrated with your existing framework
    • Easy to scale when necessary
    • No hidden fees. Affordable monthly subscription fees
    • Quick integration with third-party apps
    • Legal and regulatory compliance
    • Personalization capabilities
    • Efficient maintenance
    • Possible to white-label
    • Extensive rewards catalogue
    • Ability to change eligibility rules at will
    • Omnichannel distribution
    • Self-service customer portal
    • Reporting and analytics dashboard
    Once you know the features and functionalities that would make sense for your immediate goals, the next step is to work with them for a certain time period. Choose three or four loyalty program software and use them internally. Your final decision should also depend on your budget.
  • Choose the type of loyalty program:
  • There are several types of customer loyalty programs, based on which the incentives or perks you plan could change. Some of them are point programs, spend-based programs, tiered programs, VIP exclusive clubs, value-based programs, gamified programs, and strategic partnership program.

    • Points-based: Customers get points everytime they spend. After the loyalty credits accrue, they can redeem their rewards
    • Spend-based: They get equal loyalty credits for the amount they spend at a business
    • Tiered programs: It is based on multiple levels of loyalty. You go higher in the levels as you spend more
    • VIP clubs: Customers pay a fee to be a part of this program, and get access to special perks and discounts
    • Value-based: Here, you reward your customers without actually rewarding them. How? Because the rewards align with the customers’ value systems
    • Gamification: Loyalty programs that have gamification options like badges, quizzes, milestones, challenges, etc., will keep the customers engaged

  • Figure out the right incentives:
  • One of the easiest ways to determine what kind of incentives your customers love, all you need to do is ask them directly. You can send an online survey with a bunch of carefully-prepared questions to get details about perks that they would love to have. Post-purchase surveys, social media polls, in-app surveys, phone calls, and interviews, are also excellent ways to find it.

    • Below are some of the oft-used incentives
    • Discount codes
    • Member-only prices
    • Exclusive access to new products
    • Free delivery
    • Free merchandise
    • Store credits
    • Free products
    • Partnership perks
    • VIP experiences
    • Charitable contributions
    It would be unwise to try all of them at the same time. Experiment with these rewards internally or with a small cohort of customers to see how they welcome it. Once you get a clearer picture of the reward types and incentives, make sure they are in alignment with what your customers want.
  • Implement the loyalty program:
  • Once you have everything in place, such as the copy, designs, graphics, incentives, you can implement the loyalty program. Make sure that your program is easy to understand and that they can receive the benefits from it without having to wade through complex terms and conditions. Getting disqualified from getting rewards because of a random technicality isn’t the outcome your customers want.

  • Track the program’s results:
  • With each exercise, you will gain more clarity into your customers’ preferences and expectations. Therefore, you should be able to get better results. Track metrics like a hawk, so that you are immediately aware of any missteps. It can also be used to find out what works best for you. Always look at ways to make your loyalty program different from that of your competitor’s with the help of the metrics you track.

    Wrapping up:

    Loyalty programs are the way to go if you want more from your Shopify store. Choosing the right loyalty program software can make all the difference to your profit margins. No matter whether your Shopify store is thriving or not, it is imperative that you add a loyalty program into your stack. It helps boost customer engagement, turns customers into advocates, and improves their shopping experience with you.

    At 99minds, we are always looking at the finest ways to improve your Shopify store. From setting you up with a loyalty program to creating branded coupon cards to gift cards, we build an infrastructure that will directly affect your bottom line. Get in touch with us to understand how we can help you.