Adding a loyalty program to your online store can, well, build loyalty (!) with your best customers. Think high Average Order Value [AOV] repeat purchases, increased word-of-mouth promotion, improved Net Promoter Score, gifting, and more. In short, loyalty programs can be a powerful strategy to increase conversions and sales.
Incentive for Repeat Purchases: By offering points, discounts, or exclusive benefits with every purchase, customers are encouraged to return to your store to accumulate rewards. This incentive for repeat purchases helps foster customer loyalty and increases the chances of converting one-time buyers into regular customers. That is, repeat customers!
Improved Customer Engagement: Loyalty programs foster engagement and interaction between the customers and your brand. Customers are more likely to interact with your store to track their rewards, redeem points, and explore exclusive offers. This active engagement keeps your brand top-of-mind and encourages customers to visit your store more frequently. Engagement = Sales.
Word-of-Mouth Marketing: Satisfied customers who benefit from your loyalty program are more likely to share their positive experiences with friends and family. Word-of-mouth marketing is a powerful driver of new customer acquisition. When your existing customers become advocates for your brand, it can lead to an increase in sales through referrals. “I want what you have, where did you get it?!”
Reduction of Cart Abandonment: Loyalty programs can help reduce cart abandonment rates. When customers know they can earn rewards or receive special offers by completing their purchases, they may be more motivated to finalize the transaction. This can lead to a decrease in cart abandonment and an increase in completed sales. That’s the simple math of goodness.
Customer Data and Insights: Implementing a loyalty program allows you to gather valuable customer data and insights. You can track customer preferences, purchase behavior, and other revenue producing information. With this data, you can segment your customer base and tailor marketing strategies to specific customer groups, leading to more personalized and targeted campaigns that drive conversions. “You can’t manage what you can’t measure” – Peter Drucker, Management Guru of old.
How to get started
Loyalty programs can start off really simple and grow to become something complex and multi factored. Take a look at competitors and larger brands to see what you can do to start your own loyalty program. The key is to start. One word of warning, start off higher than you might want to, e.g.,. free shipping for people that have spent more than $300 per year or similar. You can always reduce the cost to gain levels, but you will struggle with brand damage if you raise your requirements after launch.
Apps to get started on Shopify
Over the years we have used many of the different loyalty apps on Shopify. One common theme we see is the use of a “mini-cart” system--which embeds the loyalty program in a popup on your website. These types of systems are very easy to add to your store, requiring no code updates, but none of them are ADA compliant (we have an entire article here on how to be/maintain ADA Compliance). Loyalty Lion and YOTPO can be utilized in a way that is ADA compliant.
Loyalty Lion
Loyalty Lion is our suggested loyalty app whenever a client asks us about implementing a new system. The benefit of Loyalty Lion and Smile is that they are both only focused on your customer loyalty goals. They do not have any other apps to worry about, and they are laser- focused on your success.
Loyalty Lion has an entire onboarding team that will talk you through all the steps and get your system set up exactly how you want it to be. Plus, they offer App Embeds, allowing you to easily add your loyalty details and overviews to any page--if you are using a Shopify OS 2.0 theme!
As we talked about previously, Loyalty Lion is ADA compliant with their App Embeds, keeping your store in compliance.
Smile.io
Smile.io is a well-known loyalty program in the Shopify ecosystem; they have been around for many years and they have a solid free offering. The Free Tier gives you the ability to setup a simple loyalty program and really dip your toe into the loyalty world.
Their system will scale with you as well, allowing you to add new options and ways to obtain more points AND higher AOV.
Smile.io runs as a “mini-cart” and as such is not ADA compliant. There is no way to get this system ADA-compliant and you must do something to handle the fact that ADA/Keyboard users will not be able to easily interact with your Loyalty program.
YOTPO Loyalty
YOPTO started offering loyalty systems in 2022 and has been growing their offering in 2023. If you already use YOTPO with your store, the loyalty add-on may be worth the investment. It is still very new in the market and has some issues compared to the other services mentioned in this article. Our biggest problem with YOTPO’s loyalty service is their pricing and slow technical support on known issues. They do provide you with an option to embed your loyalty program into the store and remain ADA compliant.
Drawbacks of Loyalty Programs
While most loyalty programs offer a great ROI and usually increase your conversion rate/AOV, they can have some drawbacks.
Increased Customer Service Volume
A truism is that adding a loyalty program will increase the number of chats/calls for your support team. Inevitably, someone will not understand what your loyalty program provides or has issues redeeming their points. Some programs integrate with GORGIAS and other support systems, allowing your team to quickly respond to questions.
Redeeming Points for Cash
If you are on Shopify Plus, you get a pass for this one, as you can actually do the Gift Card redemption method and users will easily be able to redeem their points for cash.
If you are not on Shopify Plus, your program will generate a unique DISCOUNT CODE for your customers to redeem points. These discount codes are typically unable to be combined with your other discount codes. That means, if a customer wants to redeem their points, they cannot do so utilizing an automatic discount or another discount code. (Sometimes you can’t redeem points if your automatic discount setup is getting the customer a better deal.)
If you want to explore the possibilities of loyalty, we’re loyal to YOU! Reach out to our team today.