Loyalty system – definition
A loyalty program is a marketing strategy in which a company rewards its customers for frequently using its products or services. It's a program based on collecting points, rewards, or benefits that customers receive in exchange for loyalty and active participation in company activities. Loyalty systems aim to build relationships with customers, increase their engagement, and encourage repeat purchases, which contributes to increased sales and maintains the company's competitiveness.
What benefits does the loyalty program offer?
- Increasing customer loyalty
A loyalty program encourages repeat purchases by offering rewards, loyalty points, or benefits for every purchase. This allows e-commerce owners to build lasting relationships with customers and increase engagement.
- Increase in average order value
A loyalty program can motivate customers to make larger purchases by offering bonuses for reaching certain purchase thresholds or purchasing specific products. As a result, e-commerce owners can increase their average order value and generate more revenue.
- Improving customer retention
With a loyalty program, e-commerce owners can reduce the number of customers who switch from their store to a competitor. Continuously rewarding loyal customers makes them less likely to switch suppliers.
- Better understanding of customer preferences
A loyalty program allows e-commerce owners to collect data on customer behavior and preferences, such as purchase frequency, preferred products, and product categories. This allows them to better tailor their store offerings to customer needs and increase the effectiveness of marketing efforts.
- Standing out from the competition
Given the fierce competition in e-commerce, a loyalty program can be a key differentiator for an online store. Customers often choose stores that offer additional benefits in the form of a loyalty program, which can contribute to increased profits and brand growth.
How to set up a loyalty program?
1. Define your goals:
Increase sales?
Increased customer satisfaction?
Acquiring new customers?
2. Define your target audience:
Who are your customers?
What are their needs and preferences?
3. Select the appropriate program type:
Points program
Discount program
Multi-level program
Affiliate program
4. Define the program rules:
How will customers earn points or discounts?
What rewards will be available?
What are the terms of use of the program?
5. Create an attractive promotional campaign:
Inform your customers about the program
Encourage them to join
Show them the benefits of participating in the program
6. Monitor and analyze program results:
Check if the program is effective
Make the necessary changes
Types of loyalty programs
| Type of loyalty program | Description |
| Loyalty points | Customers earn points for making purchases, which they can then exchange for prizes, discounts or free products. |
| VIP programs | Programs for a select group of customers who receive special benefits such as exclusive offers, faster delivery or access to VIP events. |
| Loyalty cards | Customers receive a special card or ID that allows them to collect points or receive discounts on subsequent purchases. |
| Cashback | Customers receive a portion of their money back for purchases made, usually in the form of a credit for future purchases or to their bank account. |
| Affiliate programs | Programs in which customers receive benefits for recommending the store to others, for example in the form of discounts or rewards. |
| Degree-Based Programs | Customers advance through loyalty tiers, gaining greater benefits as they make more purchases or achieve certain goals. |
Examples of e-commerce affiliate programs
- Media Expert – an electronics and home appliances store offers an affiliate program in which publishers can earn commissions on sales generated from their links and banners.
- Zalando, the online fashion retailer, offers an affiliate program where publishers can earn commissions on sales generated from their links and banners.
- Empik, an online book, music and film store, offers an affiliate program in which publishers can earn commissions on sales generated from their links and banners.
- Allegro – the e-commerce platform offers an affiliate program where publishers can earn commissions on sales generated from their links, banners and other promotional materials.
Creating loyalty systems in Shopify
Shopify offers several ways to create loyalty systems:
1. Applications:
There are many apps available in the Shopify App Store that let you create loyalty programs. These apps offer various features, such as:
- Loyalty Points: Customers can earn points for purchases, which they can then redeem for rewards.
- Discounts: Customers can receive discounts on purchases based on their loyalty level.
- Personalized offers: Customers can receive personalized offers and promotions.
- Reward Shipping: Customers can receive free shipping or other benefits for reaching a certain loyalty level.
2. Shopify Reward Points Program:
Shopify Poland offers its own loyalty program called Shopify Reward Points. This program allows customers to earn points for purchases, which they can then redeem for rewards like gift cards, shipping discounts, and rebates.
3. Integration with other systems:
Shopify ( migration to Shopify ) can be integrated with other CRM and marketing automation systems, allowing you to create more advanced loyalty programs.
