Shopify Ecosystem

How To Develop A Successful Customer Loyalty Program: Essential Guide

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First things first…What is a customer loyalty program and why should I implement one for my Shopify store?

Every successful business approach is based on establishing good and strong relationships. Customer loyalty programs are business initiatives that help develop a deeper connection with current customers and assure their satisfaction with your service. However, you may not be aware of the many additional benefits loyalty programs can bring to your business. 

On the other hand, there are many pitfalls you have to be aware of when developing your program, like security and taking proper care of your customers’ data. 

Since loyalty programs require customers to give access to their personal data, they’re often reluctant to join to avoid becoming a data breach victim. Additionally, loyalty programs often include the use of apps that can threaten users’ privacy, so you’ll have to ensure your customers’ data stays safe.  

To help you avoid security risks and upgrade your business approach, we listed some of the most lucrative benefits a customer loyalty program could bring and added a few tips on starting one of your own. 

Benefits of customer loyalty programs

Improved customer engagement 

Connecting with your target audience is essential for creating engagement and increasing brand awareness. A gift or a discount is an excellent motivation for customers to engage with you and share their positive experiences with potential new customers. 

Increased brand affinity and loyalty

Since rewarding your customers can contribute to their overall satisfaction, they will be more likely to identify with your core values and principles and strengthen your brand in the long run. Focus on creating a feeling of mutual trust since that tends to be one of the most frequently highlighted traits customers look for in a brand. Moreover, 82% of customers said they’re likely to continue buying from a brand they trust over the brands that are currently trendy. 

Increased sales

Loyalty programs are all about putting a continuous effort into keeping your current customers happy rather than focusing on attracting vast numbers of one-time buyers. Here you’re concentrating on people who already trust you, and you’re not trying to beat the competition. Additionally, customer loyalty programs can help you keep your sales high throughout the year, regardless of seasonal trends that every brand is susceptible to.

How to start a successful customer loyalty program

Analyze your audience

A study conducted by McKinsey & Company showed that two out of three Americans say their social values determine their shopping choices. Before making any drastic changes to your business approach, select the target audience for your program. Analyze customer behavior and decide how to tweak your strategy to meet their needs and expectations better. Determine what type of reward system would be suitable, and don’t hesitate to ask for their feedback before outlining your plan. Send them a survey with precise questions that could give you an overview of their expectations and habits, or call them in person and talk to them to get more personal input. 

Choose the right name for your program

Choosing the right name probably isn’t something that’s on top of your mind when creating a loyalty program. However, it’s essential to creating a sustainable approach that’s in line with your brand’s core values. Ensure the name of your program shows a direct link to your brand and that it resonates with customers’ aspirations. Since people want to feel unique and valued, creating a name that would indicate exclusivity and appreciation of their individual selves is an excellent way to go. In fact, 94% of Americans said they would use the advantages of an exclusive program.

A great example is brands that use “silver,” “gold,” and “platinum” tier loyalty programs where customers feel like they’re a part of an exclusive club. However, it is always essential to keep the name of your program simple and descriptive. It must be memorable and creative enough to encourage them to roll in.

Provide added value to your customers

Clever shoppers have the nose for poorly developed loyalty programs that only try to trick them into spending more money. When starting your customer loyalty program, you must find something that adds value to motivate your customers to enroll. People are not interested only in gifts and special offers. An increasing number of customers want to feel like they’re contributing to creating a better and more sustainable future. As 70% of customers want to know how are the brands they trust address burning social and environmental issues, companies are trying to incorporate more socially responsible initiatives into their customer loyalty programs. The Body Shop’s Love Your Body Club is an excellent example of a socially sensitive loyalty program. Aside from offering their customers a birthday voucher, early access to special editions, and exclusive gifts and prizes, the Body Shop loyalty club allows them to choose one charitable organization from their list and donate money to the cause they want to support. 

Decide what actions you want to reward 

One of the biggest mistakes of companies that lead to their loyalty programs’ demise is rewarding customers only for purchasing actions. If you have a presence on social media and you see your customers like to engage in conversation there, focus on rewarding those actions. Rewarding loyal customers who leave positive reviews on social media and forums is an excellent way of showing that you care. Since online reviews are as critical in influencing customer decisions as personal recommendations, rewarding those who speak highly of you is a direct business investment. 

Expand the selection of rewards you offer

Another thing to remember is the types of rewards you want to offer. We recommend expanding the selection of rewards since there are other ways to strengthen loyalty besides giving them discounts. For instance, you can reward your customers by letting them accumulate loyalty points through various actions like purchasing, sharing posts on social media, and referring a friend. Also, most customers appreciate free delivery and return options and occasional gifts that show them how valuable they are to your brand. And lastly, never underestimate the power of personalization. People love seeing you appreciate them, so if you’re planning to send a token of appreciation to your loyal customers, think about adding a personalized, possibly hand-written note and addressing them with their full names. 

Choose a multi-channel approach to better connect with your customers

If you’re waiting for customers to visit your webshop or site to enroll in a loyalty program, your efforts may be in vain. One of the first steps in analyzing your target audience should be determining what social media platforms they use most frequently. Once you get a good overview of their online activity, ensure they can access your customer loyalty program from those networks. Another excellent way of making your program more accessible is creating an app that will keep your customers engaged and encourage them to participate in your program more actively. Aside from convenience, loyalty program apps can give you a better insight into customer behavior, and you can track the results of your program more efficiently. However, access to users’ personal data comes with a huge responsibility. If you want to develop a loyalty app, consult with cybersecurity experts to prevent any data leakage and protect your customers from becoming victims of a data breach. 

Monitor, adjust & ask for feedback

To ensure your loyalty program’s success and longevity, you must develop a proper reporting system. Many loyalty program software can automate this process, but there are other aspects you can monitor aside from raw metrics. Reaching out to your loyal customers and asking them for feedback is always helpful. However, people tend to get annoyed by long surveys and vague questions, so keep your feedback reports as short and precise as possible. However, tracking progress isn’t enough. Use collected data to create actionable steps to improve your loyalty program and bring success to your business initiatives. Also, monitoring engagement on social media and keeping an eye on the competition can give a good insight into trend changes and give you ideas for upcoming project upgrades. 

Conclusion

Customer loyalty programs can help you build more stable relationships with current customers and bring constant sales revenue. However, it requires careful planning and significant changes in your business model. You have to ensure you have enough resources and clear goals of what you want to accomplish. Therefore, it’s essential to develop an achievable project plan, monitor your success, and make changes accordingly. Since customers want to see value in your program, ensure you’re correctly addressing burning social and environmental issues and reward non-purchasing actions. Also, since loyalty programs require gathering personal data from your customers, ensure you have adequate cybersecurity measures to prevent data breaches that can put your business at risk. 

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