Loyalty programs are proven to benefit merchants. 32% of customers say that a loyalty program makes their experience better, and 71% said that it was important to their brand relationships. Loyalty programs can also assist in customer retention, make customers feel valued, and differentiate a store from their competitors.

With no built-in solution, Shopify merchants are left wondering how to set up a loyalty program and what kinds of awards to offer through the awards program. Fyresite has made this blog will go over all of these concerns and more, allowing a stress free loyalty program set up on Shopify.

What are Loyalty Programs, and Why Should I Care?

Loyalty programs are programs that reward repeat customers. There are a variety of rewards that can be offered through these programs, depending on the app used and merchant choice.

Merchants should care about loyalty programs because their customers do. 7 out of 10 (70%) of customers have said that a loyalty program is a leading factor they consider when sticking with a brand.

Merchants should care about loyalty programs because their customers do

Types of Loyalty Programs

There are many different types of loyalty programs and rewards that can be set up.

Point System

Point systems are loyalty programs where actions completed by those in the program gain points. These points can then be redeemed for rewards.

Rewards typically include a dollar amount off, a percentage off, or a special reward, like a free product.

Point systems generally work in one of two ways. The first is that there are point thresholds to reach these rewards. When the threshold is reached, the reward is earned and the process restarts.

The other way is that there are tiers of points, and a customer can choose to either redeem their points at a lower tier, or save their points for a higher tier. This is like when you choose to either turn in your tickets for a small prize, or save all of them for a larger prize.

Whichever option is chosen, it encourages customers to make more purchases with your store and know that doing so will give them the chance to get more bang for their buck.

Tiered Programs

Tiered programs are essentially what they sound like. There are tiers of loyalty that correspond to tiers of rewards. These tiers are most commonly defined by the amount spent by the customer in a time period. For example, $0-200, $201-500, $501-1000, $1001+ could be tiers, and the time period to spend this amount at a store can be by quarter or year.

The higher the tier, the better the rewards. This can include early access, exclusive discounts, and even exclusive access to products.

Paid Programs

Paid programs are loyalty programs that a customer pays to get into. For a set fee, either by month, year, or one-time, customers receive access to rewards.

Value Based Programs

Unlike traditional loyalty programs, value based programs allow customers to choose a benefit for their purchase. For example, they can choose a charity for a percentage of their applicable purchase to go to.

This can also be combined with other loyalty programs, such as the point system. Instead of gaining points for customer benefits, they can gain points to reach donation levels. For example, gaining 200 points to have a $5 donation to the charity of their choice (write-in or from a provided list) made.

Which Loyalty Program is Right for My Business

As nice as it would be to have a simple answer, the right loyalty program depends on the business and the customers that it attracts. This is even more complicated if your loyalty program combines elements from more than one of the programs listed above.

At the end of the day, the loyalty program that is right for your business is going to depend on your business and customers. There’s no one size fits all for loyalty programs.

How to Set Up a Loyalty Program on Shopify

While it’s true that Shopify has no native loyalty program, there are still many great apps that can be utilized for stores. That’s why the best way to set up loyalty programs with Shopify is through apps.

Smile is a popular app among Shopify merchants. With free and paid plans, it offers multiple types of loyalty programs.

There is also the option to use a review app that includes loyalty programs. You can find a number of these apps on our top shopify review apps of 2024.

Get Started With Shopify

Are you looking to start or move your business to Shopify? Or to upgrade your Shopify tier? Maybe you’re looking for help to optimize your shop. Fyresite can help. Contact us or use our affiliate link to get started today.