I am often asked, “Alex if you were running my store, how would you structure the loyalty program?” Or I might get asked, “What is the most important component to include in a loyalty program?” these are both great questions, but they have different answers depending on what you sell.

So, I am going to explain to you how I structured my Shopify store’s loyalty program. I will go over: what I included and excluded, why I gave the amount of points I did, and some general Shopify loyalty tips.

Disclaimer time! If you read this blog frequently, you know that Smile.io is a provider of loyalty programs for online stores. We have a Shopify loyalty app, which is what the following loyalty program was built with. I work at Smile.io so naturally I used it to create my own Shopify store’s loyalty program.

Am I saying Smile.io is the best loyalty app for Shopify? Yes, although I am particularly biased. In this post I am going to explain how my program works assuming you are using Smile.io for Shopify. If you are not, just take the provided knowledge and use it with your loyalty provider (I won’t be upset).

Some Quick Background Info

I have been helping businesses with their customer retention and loyalty strategies for a few years now. I have published a few resources on the subject and written for some amazing blogs like: Hubspot, Shopify, Colloquy. and TechVibes

I hope this gives me a bit of credibility in your eyes. The store used in this example is one that I started and manage in my spare time. It is not a million dollar business, it is not even my full time focus, but it does let me put theory into practice for you.

My Store & Loyalty Program

My store sells items that are a personal interest of mine, men’s grooming and hair styling products. The goal is to create products that men traditionally would not use like: shampoo bars and hair oils, and give them a masculine brand. But enough about that, let’s look at how I structured the loyalty program.

How I Set Up My Shopify Store’s Loyalty Program

This is a detailed walkthrough of how I set up a loyalty program for Spearhead Life Supply, and the rationale behind each step.

Step 1. Select a Loyalty Program Provider

Please, please. please do not try to build a Shopify loyalty program from scratch. There are apps out there on the Shopify app store that can create one for you at a fraction of the cost.

What I did for Spearhead:

As mentioned above I used Smile.io to create this program, and the images used to explain the creation of this program are from the Smile.io Shopify app.

Step 2. Decide What You Will Reward Points For

At the very least, your store should be rewarding points for account registrations and purchases. This creates a simple yet super effective loyalty program. A registered account provides you with a too much future marketing potential to pass up on. That is why welcome points are a must. Rewarding for purchases, well I don’t need to explain that to you.

Depending on the app you choose, there are a host of other ways to reward your customer. Below I will explain what I chose to include in the Spearhead program.

When first getting started with Smile.io, you will be asked to select what you want to reward for. This allows you to easily get started. You can later go in and get specific about each way to reward (more on that later).

What I did for Spearhead:

I decided to reward the following actions on spearhead.life:

Account Registration
Purchases
Referrals
Birthdays
Facebook Likes
Instagram Follows

But why did I choose these ways, and avoid some others? Both great questions. Let me elaborate. As I mentioned above, registration and purchases are a staple in any Shopify loyalty program. I will skip those two and explain the others.

Referrals:

I reward referrals in my loyalty program because there is no better way to acquire a customer than through a customer referral. Nielsen ranks a referral from a friend as the most trusted form of advertising, and how can I argue with that.

When you reward referrals as part of a Shopify loyalty program, you are turning your existing customers into powerful marketers. All you need to do is a give a little incentive.

Grooming products are definitely an item that people are willing to share with friends and family. A referral component is a good idea for most Shopify stores with the exception of stores that people may be embarrassed to share. That could be an adult diaper store or adult toy store.

The best part about a referral points through Smile.io is that they are only rewarded when the referred party makes a purchase. This is great because I know exactly how much I am paying to acquire this customer. Which is difficult for new stores to do with limited data from Adwords or promoted social.

Birthdays:

Who doesn’t like to feel special on their birthday? If you give your customers points on their special day they just might have some birthday cash burning a hole in their pocket.

I have written an entire article on why birthday points make sense for your loyalty program. So I will keep this short. People feel good on their birthday, people in a good mood are willing to spend, people who spend are the type of people you want on your Shopify store. That is why Bday points are included on Spearhead.

Smile.io allows you to reward points when shoppers follow different social media accounts. I decided to set up points for Instagram followers and Facebook likes. The points are rewarded when a shopper follows the link through the modal to social media page.

The products I sell on Spearhead Life Supply are very unique in the way they perform and look. That is why building a social following is so important in selling them. Getting shoppers to follow the Spearhead social pages is a no brainer for me. It exposes them to my products more often, and increased exposure means increased chance of making a purchase.

By getting people to like your Facebook Page you are essentially creating a notification board. I like it because it creates an audience for blog posts that are published to the Spearhead Grooming Blog.

I do not reward for Twitter followers. That is because I chose not to create a Twitter handle for Spearhead. It is something I will revisit in the future But I wanted to stay more focused on visual social channels.

With Smile.io you can also reward your customers for sharing your Shopify store’s URL with their following. This is a very popular feature, but it just isn’t right for me at this time. If you know me I am Mr. Soft Sell and Retention. Rewarding for social shares seems too pushy in the early stages of Spearhead.

I am not saying I will never use this feature though. In fact holding off on rewarding some features can actually help your loyalty program succeed. It is known as a staged loyalty strategy. Basically, you release functionality slowly over time to create more marketing opportunities and customer feedback loops.

Step 3. Give Your Program a Name

I honestly think that this is the most underutilized loyalty advice I give. A loyalty program performs better when it stands out from all the other programs out there. If you call the program “My Shopify Store’s Loyalty Program” your customers are going to think it is dull.

The same goes for your loyalty currency. If you just call your currency points, it does not stand out. Give your customers something to get excited about (if you need help read this article).

What I Did For Spearhead:

I wanted to give my program a name that fit the brand, but also carried an aura of prestige to it. This was not a decision I came to easily, and it took some time to come up with it. But, when I figured it out I was in love.

One day my friend described the products as “on point” without realizing the clever play on words he had just used. At that point I knew I was calling the program “On Point Rewards.”

I also wanted to come up with a clever name for my points currency. Once I realized that “points” was relevant to a spear, I knew I had my currency name. But I couldn’t just call them “points.” Even though it was clever I have always preached not calling your currency points. I just couldn’t do it.

I compromised by calling my currency “spear points” to make the connection more obvious. It also helped me to not break my cardinal loyalty sin.

Setting up a unique program and currency name is easy with Smile.io. You just need to enter in the information into your program settings. There is really nothing to it.

Step 4. Decide What Your Points Are Worth

Points have a monetary value associated to them. This basically means those points you are giving to your customer are worth money. By default Smile.io will set up a 1% back program for you.

Each dollar spent will earn your customer one point. They can then redeem 500 of those points for a $5 reward. This means that each one of your points is worth 1 cent and you are giving 1% back to your customers on every purchase. This is the default setting because it works.

What I did for Spearhead:

I didn’t change a thing! I used the default settings for On Point Rewards. The reason this is the default setting is because it works. Smile.io has helped launch over 10,000 programs, and this is the value we have seen be most effective. It is a good balance between being motivating for the customer, but not to expensive for you.

The value of your points is known as your redemption value, and I wouldn’t recommend changing it up for your Shopify Store’s program unless you have at least a year’s worth of data to make a decision based on. If you do you can look at some advanced redemption strategies.

Step 5. How Many Points Do I Give For Actions?

Once you have decided what your points are worth, you now need to decide how many points you are going to give for the actions you chose above (I told you we would get to that). The loyalty consultant in me wants to give you this answer “reward points equal to the value the action provides to your store.”

If you know the exact value of a social follow, or how much a referred customer spends on average at your store, you can use that advice. You also are likely suited for our Enterprise Plan with that kind of data and insight. But for those of you who don’t know those stats, I will share with you how I decided these values for my brand new store.

What I did for Spearhead:

Spearhead is a brand new online business, so naturally I have no data to make decisions on. That is ok, I am going to explain my rationale for each action I reward for.

Account Registration (500 Spear Points):

I give my customers 500 points when they register for a store account. This is the equivalent of giving $5 dollars in my program. To many of you this may seem like a lot for a simple registration. But I have the margins to allow this, and I view it as an investment.

If that $5 is enough to convince them to register for an account, and make a purchase, that is worth it. A loyalty program provides no benefits if customers are not enrolling. By giving them a big incentive you are drastically increasing the odds that you can get them to return for a second purchase. A repeat purchaser is much more profitable to your Shopify store!

This initial investment helps you build up your email list, and makes points motivating for them. They have now gotten that emotional high of getting a reward, and will complete your other actions to get more points. Rewarding for registration is an investment in Lifetime Value.

Referrals (500 Spear Points):

This is the second highest value action to Spearhead in my mind, only slightly behind account registration. This is because it turns your current customers into powerful marketers, with minimal effort from you. You just need to provide enough incentive.

I once again decided to set the value of this action at 500 points or $5. This was decided by asking my friends how much they would need to be given to tell everyone they knew about a product. They said, at least 5 dollars.

I was ok with giving this amount to receive another purchase. With Smile.io the referrer is only given the points when the person they referred makes a purchase. This means you are giving $5 for a confirmed purchase. Not bad!

But, good referrals reward both parties. The only trouble is that a new shopper does not yet know how valuable your points are, so they need a different motivator. That is Why Smile.io allows you to give the referred friend a percentage off their purchase. This tends to be more motivating to someone who has no idea about your loyalty program.

Birthday (100 Spear Points):

I set my birthday reward based on the other rewards I was offering. I was not sure exactly what Birthday was worth so I decided to put myself in my customer’s shoes. If I were to compare the reward to others how would I feel?

I wasn’t willing to give the same value as a registration or referral (it does not provide my store with that much value). However I would be pissed if my birthday reward was less than they were giving me to follow the store on Instagram. That is how I settled on a reward of 100 spear points.

These social follows provide an amazing opportunity to keep people engaged especially Facebook. But, they do not provide much immediate value. I did not want to give too much for these actions.

However, you still want these actions to seem like they have value. 50 points was low as I felt I could go while still making the reward seem appealing.

Step 6. An Explainer Page

This is not a feature that comes built into Smile.io, but it is still something I highly recommend. Add a page to your site that gives details about how customers will earn and spend points.

Spearhead’s rewards explainer page was not created using basic Shopify page layouts. If you are capable you can manipulate the HTML of the page to make more in depth customizations. You can do that in the theme section of your Shopify Store’s admin by clicking on the three dots.

Again do not attempt to adjust the HTML of your theme unless you know how. If you need help you can look at getting the help of a Shopify expert.

What I did for Spearhead:

I added my explainer page into my Shopify store’s header. I also followed our explainer page best practices to create a page that shows how the program works in a visually appealing and easy to understand way.

The above is a quick breakdown of the different ways to earn points on the Spearhead site. The visual explains how to earn points, how many points are given for each, and a brief description for each. It is also important to show what those points can be redeemed for.

In addition to this page I also still use the default loyalty tab created by Smile.io. This allows me to keep the On Point Rewards program visible on every page of the site.

It acts as a constant reminder to customers that the loyalty program exists. The more aware you make your customers, the more likely they are to participate. When customers participate they become more profitable and happy. Which is good for you and good for them.

How to Setup a Shopify Loyalty Program

I hope this has given you some very practical advice on how to set up a loyalty program for your Shopify store. At Smile.io we strive to create resources that give you the most practical and relevant loyalty advice possible.

If you enjoyed this guide, I would recommend taking advantage of some of our other free resources.

A few loyalty resources you may also find useful:

Good luck setting up a loyalty program for your own Shopify store! If you have decided that Smile.io makes sense for you Shopify store, you can get it here!