How to create a customer rewards program

Table of contents

Acquiring new customers is important. But with changing ad networds and increasing acquisition costs, this can be challenging. That’s why customer retention is as crucial as customer acquisition today. 

One of the most effective strategies to ensure repeat business and foster brand loyalty is by implementing a customer rewards program. Some Shopify brands, like Shop CCB, offer redeemable loyalty points based on customer actions. Others reward their loyal customers through exclusive discounts, early-bird access to sales, and personalized experiences. 

In this article, we'll guide you through the essential steps to create a compelling and effective customer rewards program for your Shopify store, helping you turn one-time shoppers into loyal brand advocates.

Breaking down the basics: Tiers and points

Before you can create a customer rewards program, you must understand its most basic components: tiers and points. Tiers are the backbone of the program. They offer customers different levels of rewards based on their store engagement. A tiered approach motivates customers to reach higher levels for better rewards. It also lends a sense of achievement and progression to their interactions.

In essence, tiers encourage continuous engagement. As customers ascend through the tiers, they unlock rewards that increase in value. Thus, each interaction with your brand becomes both dynamic and motivating. When they reach a new tier, customers will want to start progressing toward the next one. This system sets up a continuous cycle of customer loyalty. It also entices customers to explore outside of their comfort zone and see more of what your store has to offer.

From the example from Shop CCB above, loyalty points are the currency within the rewards program. Customers accumulate loyalty points through a variety of actions, like making purchases, referring friends, or engaging with brands on social media. They can then redeem these points for rewards like exclusive discounts or free products.

A successful program hinges on striking the right balance between tiers and points. The tier system provides a structured framework for customer progression. Points serve as the tangible representation of customer loyalty and engagement. Balancing the two allows you to provide a rewarding experience for your customers. And, of course, happy customers are more likely to stick around.

Personalize rewards to match individual preferences

Customer retention is not a “one size fits all” operation. Personalization is key to encouraging regular engagement. You must create rewards that align with individual customer preferences. Shopify businesses have a unique tool in the form of customer data. Analytics can help you craft personalized rewards based on past purchases, preferences, and behaviors.

Implementing personalized rewards enhances customer satisfaction by creating a sense of exclusivity. Use data patterns to curate rewards that will connect with customers on a personal level. For instance, try offering specialized discounts on products that customers frequently buy. This demonstrates an understanding of their habits and an attempt to know them. It also provides tangible value that encourages repeat purchases.

Special occasions are another important piece of any personalization strategy. Celebrating special occasions can make customers feel even more appreciated. Take birthday rewards, for example. This extra gesture shows customers they're more than a mere transaction. Don't be afraid to celebrate the milestones in your customers' lives! Chances are, you'll be more likely to establish a lasting emotional connection.

Check out how Skin Kulture uses their app homepage and push notifications to inform their app users about flash sales, birthday discounts, and combo offers, and giveaways.

Ensure program effectiveness with measurement tracking

Creating a customer loyalty program isn’t enough to make it successful. You also need to fine-tune it using assessments that ensure the program’s ongoing success. This is where you can use analytics tools to track KPIs associated with rewards programs.

Some of the metrics that measure the impact of your rewards program include customer retention rates, average order value, frequency of engagement, and more. Customer retention rates showcase the program's ability to foster long-term customer relationships. The average order value reflects the program's influence on transactional behavior. Frequency of engagement allows you to gauge how often customers take part in the program.

By keeping an eye on these metrics, you gain a better understanding of your rewards program. You can learn which aspects are resonating with your audience and which areas may need to change. Through measurement tracking, you can transform raw customer data into actionable insights, and identify successful strategies while adjusting underperforming initiatives.

Implement and ensure omnichannel functionality

The online world is interconnected. Customers have come to expect seamless integration and optimization across various online channels. For this reason, rewards programs must include an omnichannel strategy to be successful. After all, you want to provide an experience that is consistent in quality for all channels.

Omnichannel functionality also opens up accessibility to a greater number of customers. It creates a cohesive environment where customers can interact both online and offline. Customers deserve to have their loyalty recognized and rewarded through every channel. So, you have to optimize the buying experience on the website, mobile app, and in-store. Greater integration leads to a more cohesive and unified brand image as well.

Shopify rewards program best practices

Now that we’ve nailed down the basics, let’s go over some of the best practices you can put in place to polish up your rewards program.

1. Clear and consistent communication

Customers won’t engage with a rewards system that doesn’t show its benefits. Use concise, engaging language to illustrate the details of the program, like how customers will earn rewards, what those rewards are, and how they can redeem them. If you want to make customers excited about engaging with the program, you have to make sure they completely understand what they’re joining.

Don’t let your communicative efforts stop at sign-up. Keep your customers informed by sending regular updates, promotions, and new reward opportunities. Take advantage of email campaigns and in-app or push notifications. These and other channels can remind customers of their accumulated rewards and upcoming chances to redeem them. This type of consistent communication helps keep your brand top of mind.

2. Ease of use

No one wants to engage with a loyalty program that is confusing or difficult to use. Make sure your program integrates well with all your existing channels. Customers should be able to track their progress from any location. Try to avoid adding unnecessary steps to the redemption process. A simple, user-friendly interface will encourage more customers to take part.

3. Social integrations

Integrating with social media platforms broadens the reach of your rewards program. Make use of Shopify’s social integration tools. Enable your customers to share their achievements with their networks. This gives you free promotion and builds a larger community around your products

4. Timing

Kick your rewards program off with a bang by timing the launch or promotion with special events. For example, you may choose to launch the program alongside the anniversary of your store. This allows you to celebrate the loyalty of long-term customers while also enticing new customers. Promoting around the holidays can be a great way to draw in buyers looking for deals and convert them into repeat customers as well.

5. Non-purchase incentives

Purchases are often the main focus of loyalty programs. But, incorporating non-purchase incentives broadens the scope of your program. It also diversifies your rewards, making them appealing to a variety of customers. Encouraging your customers to leave reviews or engage with your business on social media to earn extra rewards is a great example.

Referral programs, another example, motivate customers to tell their friends about your store. Word-of-mouth is an excellent way to promote your business. After all, people tend to trust recommendations from friends. Customers referred by other customers convert 3X higher, stay 37% longer, and spend 200% more.

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6. Analyze and improve

Shopify’s tools allow you to collect data on customer behavior. Use your access to data to gain insights into the effectiveness of your rewards program. Identify patterns, preferences, and areas for improvement. With such detailed information, you should be able to fine-tune the program based on the changing expectations of your customer base. Adjust your strategy based on current data insights to optimize the program for better results.

Launch your customer rewards program with Vajro

A well-designed rewards program not only increases customer satisfaction but also drives sales and enhances overall brand engagement. Vajro, a leading app builder for mobile loyalty designed specifically for Shopify stores, you can seamlessly manage your rewards program, engage customers with personalized notifications, and provide a seamless shopping experience through a fully customizable mobile app. 

If you're ready to start building a customer rewards program that works with your customers, book a demo with Vajro today. Or, test drive our free trial to see firsthand how simple it can be to capitalize on your existing customers and elevate your mobile sales to the next level.

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