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Exploring customer retention with loyalty programs

July 7, 2021

Explore loyalty programs as a tactic to grow your stores customer lifetime value and deliver long term growth

Loyalty Programs to increase customer retention

This article is part of our Customer Retention series and before we jump into this article, it’s worth reading on our first post about customer retention and how you can use email marketing to drive returning customers followed by our post outlining 3 strategies to increase your stores revenue.

As a quick recap of the first 2 posts we wrote about leveraging email marketing strategies to boost customer retention. The 5 strategies were discussed launching the following email series

  1. Birthday, anniversary and milestone emails.
  2. Cart abandonment email series.
  3. Post-purchase email series.
  4. Product recommendations emails.
  5. Review and testimonial request emails.

We hope you had a chance to implement some of the above strategies using your email service provider (or ESP). In our second post we focused on 3 strategies using Shopify apps to drive customer retention.

Strategy 1 - Loyalty
Strategy 2 - Subscriptions
Strategy 3 - Customer Service

In this post, we’ll explore strategy 1, loyalty further and how deploying a loyalty program is proven in the long run to be a winner for brands as loyal (returning) customers tend to spend on average 67% more than new customers

If you’re a Shopify store owner, the major loyalty apps you should consider are Loyalty Lion, Smile, Yotpo (formerly known as Swell Rewards) and Rise.ai

To start building a loyalty program doesn’t have to be a complicated process, we recommend you review your brand's unique selling points (USP) (i.e. why do your customers shop with you and what brings the existing loyal customers back). Once you have a solid understanding of your store USPs then use these as the building blocks.

For example, if you have a highly engaged social media following then award points for lower tier customers to follow you on social media channels and post user generated content about your brand.

As the very basic structure you want to reward your customers for shopping with you, creating an account with your store, leaving their details, and following your social media channels (as mentioned above).

As outlined in our first post, we’d recommend starting with a simple points system (i.e. X points per $Y spent). This will act as a solid base from which you can build on. Your next layer can be bonus points for customers purchasing full price items or new collections.

During Pre-Launch, remember to build loads of hype for your loyalty program so you get loads of sign ups and also make sure you email your existing customer base as they will be the first to start using your loyalty program and be the first advocates to market your loyalty program on their social media channels and share it with their friends and family.

Once your program launches remember to use your marketing channels to advertise your loyalty program and create benefits for little “wow” moments for your customers so the loyalty program makes customers truly feel rewarded.

Finally, to maximize the reach of your loyalty program you should make sure your loyalty app syncs with your email service provider. For example, Smile, Loyalty Lion and Rise all integrate with Klaviyo and once the systems are connected you can automate your loyalty emails to be sent from Klaviyo and more importantly include all important information re: your loyalty program, like outstanding loyalty points, tiers in all your emails including campaign and automated flows.

As always, we hope the above points help your brand kick off a chat internally about starting a loyalty program. Don’t forget to follow our social channels for more #eCommerce tips and tricks.

Alex Greifeld from No Best Practices

Alex Greifeld

No Best Practices
Sharad Thaper from Hidden Tempo

Sharad Thaper

Hidden Tempo

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