Implementing a loyalty programme on your Shopify store is a great way to incentivise your customers to purchase from your business instead of other retailers, while increasing repeat purchases and engagement.
In this article, we’ll look at some of the benefits of loyalty schemes, the different types available, and some of the main loyalty scheme providers that integrate with the Shopify platform.
Why Should You Have a Loyalty Scheme?
First, over 83% of online shoppers belong to at least one loyalty program, showing the huge appetite for customers to earn benefits in exchange for brand allegiance.
With a loyalty scheme in place, you can incentivise repeat purchases, increasing your customer lifetime value. In fact, loyalty schemes have been shown to convert 35% of one-off shoppers into returning customers.
This means your revenue and profits will increase.
And finally, your happy customers will talk to their friends and family about your brand, which is free marketing for you, and will help you acquire new customers.
So what are the top 3 rewards that shoppers value? According to a recent study, you’ll see the most success if you can offer one or more of the following:
Reward points and cash back
Discounts
Free shipping
Ecommerce Loyalty Scheme Benefits
Increase customer engagement
Loyalty programs are a great way to increase customer interaction with your brand, leading to more engagement. By rewarding customers when they buy, you can create an emotional connection and encourage them to return to your Shopify store in the future for more purchases.
More personalised shopping experiences
Offering rewards that are tailored to customers’ individual needs helps personalise the shopping experience. This can also help encourage future purchases because they’re more likely to be presented with products that they’re interested in buying.
Improves customer retention rate
Loyalty programs also help improve customer retention rate. By providing rewards for regular purchases in your store, you create an incentive for your customers to keep coming back.
Increase customer lifetime value (CLV)
Offering reward/loyalty programs also encourages your customers to spend more in your store over time, increasing their lifetime value (LTV) and boosting your sales.
Enables analysis of buying patterns and behaviour
By tracking customers’ purchases and reward points, you can get valuable insights on their buying patterns. This helps you make informed decisions when planning sales campaigns, adding new products or ranges or creating marketing campaigns.
Generate brand awareness without any efforts
Happy customers often share their buying experiences and will refer your business to friends or family. This free marketing directly boosts your brand awareness.
Different Types of Ecommerce Loyalty Scheme
There are different loyalty programmes available to suit all kinds of Shopify businesses - here’s a rundown of 5 of the most common types of loyalty programmes and their benefits.
1 - Points-based loyalty schemes
These allow customers to earn points through various methods, like making purchases, sharing on social platforms, leaving a review etc. Points can be redeemed on further purchases or for other perks.
2 - Subscription based programmes
These are ‘pay to play’ type schemes, where you pay for membership to unlock access to rewards. A good example of a subscription loyalty programme is Amazon Prime, which allows subscribers to access free shipping and other services like flash sales and music streaming services.
3 - Tiered loyalty schemes
These are similar to points-based systems, where customers earn points, but there are levels of achievement within the scheme, for example, bronze, silver and gold. The higher the tier, the higher the level of reward, discount, gift or early access. It’s a great way to incentivise customers to engage with the scheme and spend more with your brand.
4 - Value-based loyalty schemes
This type of scheme is different from the ones we’ve explored so far in that it doesn’t provide tangible rewards back to the customer. Instead, it is aligned with the company’s values - it will, for example, pledge to donate a percentage of profits to charity. It’s a way that customers can support businesses with similar values to them, forging a connection with the brand.
5 - Omnichannel loyalty programmes
Retail has evolved so that people now shop online, in high streets, and through apps and social commerce. Omnichannel loyalty allows brands to tie all of their touchpoints together under one scheme, so for example, a customer can earn points by shopping online, in-store, by attending events, checking in at places or using the brand’s app. It’s a great way of keeping customers engaged no matter how or where they prefer to interact with your brand.
