6 Reasons Why Your Shopify Store Needs a Loyalty Program

In today’s fast-paced world, having an e-commerce store on Shopify, or otherwise, means you need to think of several aspects to maintain your sales and revenues. Chief among those are your customers and how to retain them. One solution is having a loyalty program.

Yes, logistics, management, timing, courier services, and much more play a major role in the success of your business. But without customers, you won’t have a business.

This means customer retention is the most essential aspect of keeping your business afloat and one of the best ways to retain customers is through loyalty programs.

What’s a loyalty program?

A loyalty program is a program that businesses offer to customers to encourage them to be loyal to their brand. The program allows customers to get benefits and rewards for buying from a particular store.

In other words, it incentivizes customers to come to your store rather than go to your competitors.

Let’s say you are an online supermarket. If you are like your competitor and offer no incentives, customers won’t have a problem buying from you once and going to someone else.

But with a loyalty program, they would willingly think twice about purchasing from someone else. Why? Because you offer them something your competitor doesn’t. Benefits, points, rewards, discounts…etc.

How do loyalty programs work?

A loyalty program works by having customers take actions that result in the accumulation of points. As a store owner, you determine what each group or number of points translates into.

For example, accumulating 200 points means the customer can get a 10% discount on their next purchase.

Loyalty program stats you should know

When it comes to loyalty marketing or having an eCommerce loyalty program, there are some statistics to support what we are saying.

According to e-commerce marketing platform Yotpo, American consumers were more brand loyal in 2019 than they were in previous, particularly because of “the role of rewards programs in harnessing and cultivating that loyalty.”

Yotpo’s data for 2019 showed “continued strong brand loyalty among consumers,” which it said supported what it calls “a brand renaissance,” says Yotpo CEO and Co-founder Tomer Tagrin.

“But the study also reveals that loyalty is hard won. Most consumers consider themselves loyal to only a handful of brands. To win, brands need to stay at the top of their game by offering amazing products at a fair price and creating valuable experiences worth coming back to,” Tagrin explains.

In its survey of 2,000 consumers in the United States, Yotpo found that 9 out of 10 consumers said they were loyal to brands.

When asked to define brand loyalty, 67.8% of consumers responding to Yotpo’s survey said that they defined it as repeat purchasing, while 39.5% defined it as “love for the brand” and 37.7% defined brand loyalty as a preference for the brand despite price.

“The survey shows that even loyalty programs need to excite to drive engagement,” Tagrin stressed.

Some Shopify Statistics to Remember

Shopify is the third-largest marketplace in the United States, with Amazon and Ebay ranking first and second respectively, according to data released by Shopify.

As of 1 May 2020, the Canada-based e-commerce platform houses 1 million merchants.

Shopify also sees nearly 319 million monthly unique visitors to shops on its platform (as of 1 January 2020), it said, adding that the number of monthly browsing sessions on its merchants’ shops averages at 3.2 billion sessions.

The average number of orders per month carried out across Shopify was around 65.5 million orders, data released by the e-commerce platform showed.

These numbers are huge and therefore should not be taken lightly. They indicate growth and massive activity across the platform.

How can a loyalty program help your Shopify store?

As an e-commerce business on Shopify, your aim should be to get as many of these customers and browsing sessions to your store as possible.

This is where a loyalty program helps you and your store in several ways.

1.     Building relationships

One of the top ways to getting customers is to build relationships with them. A loyalty program helps you with that as it helps build a relationship between your store and customers early on.

You don’t want to be that Shopify store that a customer browses once, never to return. The loyalty program attracts those curious, browsing customers.

It gives them an incentive to stay and come back.

2.     Customer retention

A continuation of the above and by building a relationship, your loyalty program transforms your customers into loyal repeat buyers. They become people who are not just interested in buying your product but people who would think of you first when your product comes to mind.

3.     Increase sales

As I said, a loyalty program relies on customers accumulating points to get rewards.

By using a loyalty program, or particularly a gamified loyalty program, like those offered by Gameball, you can include certain tasks or actions that you would like your customers to take to level up.

You don’t have to dictate certain purchases, but asking your customers to add a new item to their cart or completing a purchase for $50 can earn them more points to level up and get better rewards.

4.     Create customer loyalty

The top purpose of a loyalty program is, as its name suggests, create a sense of loyalty within your customers and buyers. This is called creating customer loyalty.

“Customer loyalty is a customer’s willingness to repeatedly return to a company to conduct some type of business due to the delightful and remarkable experiences they have with that brand,” HubSpot explains.

In time, customers may be more willing to buy from you even if your prices are higher than your competitors simply because of your relationship with them and your loyalty program, which incentivizes them to buy from your store.

5.     Cut acquisition costs

In the world of business and e-commerce stores, it’s common knowledge that acquiring a new customer is costly. Not to mention that selling to a new customer – one who isn’t familiar with your store or brand – is significantly harder than selling to a customer who already knows you.

Having a loyalty program in your Shopify store can entice new customers and turn them into new acquisitions, which could reduce the cost of these acquisitions. It would also increase the number of new members of your loyalty program.

The cost of acquiring a new customer can be five times higher than retaining an existing customer, according to data by Outboundengine.com. In addition, an increase in customer retention has shown a profit growth of 5% to between 25% and 95%.

“The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%,” says Marketing Metrics.

6.     Driving Customers to Products

One of the things a loyalty program, coupled with push messaging or triggered notifications (a service offered by Gameball) can help you with is drive customers to certain products.

While it would be unfair to ask customers to buy certain products to accumulate points, you can attempt to direct them towards a particular section in your Shopify store. By completing this task, they can earn points to level up.

You don’t have to dictate certain purchases, but for example, you can ask your customers to add a new item to their cart or complete a purchase for $50 to earn more points, which in turn helps them level up and get better rewards.

Final words

The most important thing to remember when creating a loyalty program is that your customers are people. They are people who are impacted by what goes around in the world and who make decisions based on their surroundings.

We’ve seen loyalty programs fail because they turn into a mere accumulation of points with little rewards. A loyalty program is a give-and-take relationship that you build with your customer.

It’s not difficult and at Gameball we have easy-to-use guides for how to setup your loyalty program. We have had customers go beyond to make their brands memorable by tailoring their loyalty programs.

Like this one here, which has a Star Wars theme.

You can experience Gameball’s always-free loyalty program on your Shopify store or grab a 20% discount by using UpPromote’s (formerly Secomapp) promo code SECOMAPP20 when you opt for one of our paid plans. Using the promocode also gives you a 30-day trial.

About the Author:

Nada is the Head of Content at Gameball. She’s also a copywriter, digital marketer, and overall bookworm. When she’s not working, you can find her buried in a book – or 3!

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