10+ Loyalty Program Benefits for Shopify Brands (+ Examples)

For brands
Loyalty & Marketing • Sep 13, 2022 • Updated Oct 12, 2023 • By Eric Liefting • 11 min read
10+ Loyalty Program Benefits for Shopify Brands (+ Examples).

Discover the benefits of loyalty programs, and learn how industry leaders have achieved great long-term results with their ongoing loyalty initiatives.

Why should I even care?

First things first, why should you even care about loyalty programs for your Shopify store? Well, it's like this: your customers are like plants, and your loyalty program is the water that keeps them thriving. In other words, it's your secret weapon for customer retention. Getting more customers in your loyalty loop means they keep coming back for more; exactly what you should aim for. 

Loyalty program benefits

Loyalty programs are designed to reward your customers for their repeat business and brand loyalty. It’s presented to the audience in one of the final stages of the customer journey. Marketing- and sales teams that conduct proper customer journey management, manage their loyalty programs well too. They typically involve customers earning points or tokens for each purchase, which can then be redeemed for various rewards or exclusive benefits.

At the heart of any loyalty program is the concept of rewarding customers for their continued patronage. In practice, your customers accumulate points or tokens with each purchase. The more they buy, the more points they earn. This progression can create a sense of achievement and excitement.

Loyalty management market size

More than discounts

Loyalty program rewards can vary from discounts and exclusive offers to early access to products or redeemable points. Regardless of the rewards, the core principle remains the same: encouraging loyalty, increasing user engagement, and boosting profits. But this can be done with more than just discounts and points.

Nowadays, brands can increase loyalty program participation by launching a mobile loyalty program, and increasing mobile app engagement. One powerful feature for keeping your customers engaged in a mobile loyalty program is through push notifications, for example.  Combining app marketing principles with loyalty programs is one of the major advantages of hosting loyalty programs in a mobile environment. These push notifications allow you to share updates, special offers, and exciting news directly with your customers, keeping them eager to return for more. With event-based marketing and push notifications, you can even send a message with perfect timing based on a trigger. It’s sort of a marketing heaven.

Quote by Quincy Dagelet on retention acquisition and small e-commerce business

Key loyalty program metrics

Loyalty programs are a tried-and-true way to cultivate customer loyalty. These programs use strategic relationship marketing to incentivize repeat purchases, enhance customer relationships, and ultimately drive profits. To help you grasp the importance and effectiveness of these programs, we've compiled a list of key metrics that provide insights into the world of loyalty programs. Let's dive in:

  • Membership engagement
    Over half of American consumers are inclined to join the loyalty program of a brand they frequently make purchases from

  • Redemption rate
    A whopping 84% of loyalty program members have actually made redemptions from their respective program

  • Active participation
    On average, consumers belong to 14.8 loyalty programs but are actively engaged in only 6.7 of them, showcasing selectivity

  • Comprehensive engagement
    A mere 18% of consumers actively engage with every loyalty program they're a part of, highlighting selective participation

  • Selective participation
    The majority of consumers engage with less than half of the loyalty programs they belong to, indicating that they prefer to be selective in their interactions

  • Daily interaction
    The trend is toward more active participation, with 15% of loyalty program members now interacting with their loyalty programs on a daily basis, up from 10% in 2015

  • Rapid growth
    Loyalty program membership in the U.S. witnessed remarkable growth, with a 26.7% increase from 2012 to 2014

  • Limited membership
    Nearly half, 49%, of consumers limit their loyalty program memberships to just three programs, suggesting the importance of a curated selection

  • Reward significance
    Only a small fraction, less than 8%, of consumers state that rewards are not at all important in their purchasing decisions

Source: Forbes

These metrics underscore the profound impact of loyalty programs in influencing consumer behavior, brand loyalty, and engagement. Whether you're a business owner or a marketer, understanding these metrics can help you harness the power of loyalty programs effectively.

10+ loyalty program benefits

Let's discuss the benefits of loyalty programs, in the same order as how the marketing and sales process often goes.

loyalty program benefits for shopify brandsTip: share this image with your e-commerce colleagues to ensure they are maximizing results!

Here are the loyalty program benefits for Shopify brands:

  • Boost acquisitions
    Consumers prefer businesses with loyalty programs, so even though the focus of loyalty programs is not on acquisition - it definitely helps. 

  • Reduce acquisition costs (CAC)
    It's often cheaper to retain existing customers than acquire new ones through costly advertising. It cuts marketing costs by retaining customers, targeting promotions, and leveraging word-of-mouth referrals

  • Better manage inventory
    By understanding customer behavior, you can better plan inventory and reduce overstocking. Loyalty programs aid inventory management by tracking customer preferences, helping avoid overstocking, and ensuring stock aligns with demand.

  • Improve brand experience
    The brand experience is something logical to mention. Past experiences you’ve had with a brand determine how you feel about them. A large portion of improving the brand experience lies in optimizing the customer journey.

  • Increased average order value (AOV)
    Loyalty rewards can motivate customers to spend more per transaction. Use tokenized economies to reward customers efficiently, increasing the ROI of this initiative.

  • Grow sales revenue
    Repeat customers tend to spend more than new customers, leading to higher sales revenue.

  • Reward loyal customers
    Strengthening the bond with your community members can be done by rewarding them for their efforts. Utilize the unique interact-to-earn mechanism to reward members for completing valuable actions to ensure you spend your budget wisely.

  • Build personal relationships
    To stimulate growth in customer lifetime values, it’s essential to build personal relationships with your customer. This means that you will be working on growing a brand community; a proven best practice of lifecycle marketing

  • ​​Enhance data collection
    Not only can you reduce marketing costs from the retainment perspective, you will also be able to practice marketing more accurately by using your loyalty program data for marketing purposes. Loyalty programs gather valuable customer data, enabling you to better understand and target your audience, especially when we’re talking about data gathered through opt-ins.

  • Don’t compete on price
    One of the benefits of a well-known business with good brand recognition is that you won’t have to compete on price ever again. 

  • Increase customer retention
    There are several different types of loyalty programs for Shopify to help retain existing customers by incentivizing them to continue shopping with your store.

  • Leverage brand advocates
    Loyal customers often become brand advocates, promoting your products or services to their networks. Especially in the new era of the creator economy, many opportunities for Shopify brands arise to boost the amount of user-generated content they get.

  • Get more referral traffic
    Encourage customers to refer friends and family, generating new business through word-of-mouth marketing. Seamlessly offering incentives for this kind of referral is one of the most effective mobile app features that drive loyalty.

  • Foster an engaged community
    Loyalty programs keep customers engaged with your brand and provide incentives for engaged customers, reducing the likelihood of them forgetting about your store.

  • Work towards brand insistence
    Investing time and effort in brand awareness is great, but converting traffic from this phase to loyalty and retention is even more important. That’s where brands get UGC creators and real brand relevance, and eventually, even brand insistence is created.

  • Improved customer lifetime values
    This means that you’re focussing more on ensuring that the customer lifetime value of your customers will grow over time. 

What are the long-term benefits of loyalty programs?

As you now know, in the world of business, loyalty programs have become an indispensable tool for retaining and engaging customers. Now, let's explore the long-term results these programs can yield.

Long-term loyalty program benefits are:

  • Sustainable loyalty

  • Competitive advantage

  • Automated organic growth

Sustainable loyalty

Loyalty programs, when executed effectively, foster sustainable customer loyalty. By offering tangible rewards and meaningful engagement within an omnichannel strategy, businesses create lasting relationships with their customers. This longevity ensures a consistent, reliable revenue stream, even during market fluctuations, contributing to the brand's financial stability.

Amazon Prime
Amazon Prime is an excellent example of achieving sustainable growth. Customers are incentivized to keep using Amazon for their shopping needs, contributing to the company's continuous growth.

Competitive advantage

In the fiercely competitive world of e-commerce, a well-crafted loyalty program can provide your business with a significant advantage. It not only retains your existing customer base but also acts as a beacon for potential customers. By offering rewards and exclusive perks, you not only keep your customers coming back but also draw the attention of those seeking unique value in their shopping experience.

Starbucks Rewards
Starbucks Rewards is a loyalty program that has given Starbucks a significant competitive edge in the coffee industry. It offers personalized rewards, early access to new products, and the convenience of mobile ordering. Starbucks has managed to keep customers loyal, making it harder for competitors to attract the same level of repeat business.

Automated organic growth

Loyalty programs often feature automated elements such as points accumulation and rewards distribution. As time passes, these automated mechanisms drive organic growth. Satisfied customers, who regularly benefit from the loyalty program, become brand advocates. They share their positive experiences, refer friends and family, and help expand your customer base. This self-sustaining cycle of expansion results in steady, automated growth.

Airbnb's Superhost Program
Airbnb's Superhost Program is an example of automated organic growth. While not a traditional loyalty program, it rewards hosts who consistently provide excellent service, encouraging them to continue hosting and refer others to join the platform. This program has contributed to Airbnb's growth without the need for extensive marketing efforts.

Loyalty program benefits with 3 industry leaders

Taking loyalty program benefits to the next level

Loyalty program solutions are outdated

Community members nowadays provide more value than just spending their money. Community marketing is evolving, and there are different requirements to unlock full community marketing potential. For example: opt-in data is valuable, interactions are valuable, video views or comments are valuable and spreading the word - like a brand advocate - is almost priceless for any brand. 

Crowny’s enhanced loyalty program software

Besides offering several benefits due to fundamental differences in our platform, Crowny runs its software on blockchain technology and provides blockchain-based loyalty rewards for its clients. What are the benefits of that? Well, it’s like a loyalty program on steroids, both for consumers and for businesses. Learn more in the blog article about mobile-first blockchain loyalty programs to find out what the exact benefits are of these two vital diversifying components that make Crowny unique.

The ultimate rewards program

Rewarding users for completing valuable actions is appreciated and will be reflected in the long-term business success. That is why Crowny has developed an ultimate rewards program for rewarding users of your Web3 loyalty program based on incentive-driven interactions. By combining the benefits of blockchain technology and the most effective features of modern loyalty programs, Crowny now offers the best of two worlds. 

Try out our cutting-edge Web3 Loyalty Program Software, and get early access to a demo now.