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Customer loyalty is a situation when a client consistently returns to shop with a particular brand over an extended period of time.

Loyalty (reward) programs have become proven methods for growing and sustaining market share. According to Adobe’s “The ROI from Marketing to Existing Online Customers” survey, repeat customers are buying nearly 30% more items per order than first-time shoppers, generate three to seven times more revenue per visit, are 9 times more likely to convert than first-time shoppers, and spend 47% more than first-time shoppers during the holidays.
In this article, you’ll find out about the benefits of customer loyalty programs and get some tips on how to launch them in your store.

Benefits of loyalty rewards programs

Provide better customer insights. Loyalty program software tracks customer spending habits that can provide valuable data. Thus you gain a deeper understanding of your target audience, create effective advertising campaigns, and offer customers what they want. If you have a digital loyalty program, all the data is stored in a software tool, and you can easily access it. 

Encourage referrals. Your dedicated customers will generate positive word of mouth by sharing pleasant experiences with their friends and family and even giving you a shout-out in social media.

Give a competitive edge over other retailers. One thing that is hard to match is an excellent customer loyalty program offering. It makes customers feel special, which fuels their loyalty to your brand.

Tips on powerful customer appreciation programs

Use a simple point-based system. Regular customers will earn points, which translate into a reward (e.g., a freebie or a special customer treatment). It’s important to keep the conversion simple. Although a points-based system is a common form of rewards programs, it may not be necessarily applicable to every business. It works for businesses that encourage frequent and short-term purchases. 

Offer smaller gifts quickly. Better smaller but faster. Keep your rewards within 10% of the total value of your customer’s last purchase. Give a gift or a discount after five purchases instead of ten. 

Keep rewards fresh. Loyalty programs have to be consistent and original at the same time. So make sure your loyalty programs frequently introduce new and different benefits that excite customers at a reasonable cost.

Give exclusive discounts via social media and email newsletters. Email and social media offers give you real-time metrics to watch. You can tailor your discount offerings based on how the campaign is performing. For example, extend the campaign duration, shorten it, or add more value. Your social media followers and email subscribers are loyal to your brand. So, convert that loyalty into sales by offering them limited-time discounts through these channels. Provide a discount code and use the unique hashtag consistently across all of your social media channels during the marketing campaign.

Exchange rewards for feedback. Never underestimate the value of feedback. It gives you free insight into how well you’re serving your customers and what can be improved. Offer customers rewards for their timely feedback after recent purchases. When you connect with your customers, keep it succinct and simple. You may ask the following questions:

  • Why have you chosen our shop?
  • Which service or product have you purchased?
  • Would you recommend us to your friends?
  • How would you rank our services and products (provide the rank scale)?
  • Is there anything you would like to improve? 

Don’t forget to thank your customers for their time. Be careful about choosing the way of feedback collection: email, text, or social media messages. No phone calls. It may be considered intrusive.

Consider a trade-in policy. Let’s take Apple as a wonderful case in point. One of the many advantages Apple has versus its competitors in the smartphone market is the fact that its iPhones hold value longer than most other products in the market due to the trade-in policy. An increasingly large percentage of Apple’s revenue is brought by its services. Trade-in program helps to grow Apple installed base which promotes Apple services. 

Final Thoughts

Loyalty programs have proven to boost customer lifetime value, drive customer retention, and inspire further loyalty. If you have an idea of a loyalty program for your business, our team will transform it into a viable Shopify solution.

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