Using Shopify Automated Rewards Apps to Build Customer Loyalty

While acquiring new customers is important, nurturing your existing fan base through strategic loyalty initiatives is the surest path to sustainable, profitable growth.

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By Jameela Ghann
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Edited by Nelsy Mtsweni
Joel Taylor
Fact-check by Joel Taylor

Published May 25, 2024.

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Businesses perpetually seek innovative ways to retain customers and stimulate repetitive purchases. It costs five times more to acquire a new customer than to retain an existing one, making customer retention strategies critical for sustainable growth.

Shopify store owners have many automated rewards apps that can be used to reward active customers with discounts and foster such loyalty. These apps provide scalable solutions to incentivize repeat purchases, enhance brand engagement, and harvest valuable consumer data.

Meet the Expert

Jameela Ghann is a seasoned online store owner with over a decade of eCommerce experience. Apart from running Alora Boutique, she's also the marketing manager for Fera Product Reviews.

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Understanding Rewards Programs

Loyalty programs are carefully crafted marketing strategies aimed at motivating customers to keep shopping or utilizing services through enticing rewards.

By integrating rewards apps like those offered by Shopify, businesses can allocate points or rewards to customers with every purchase. These rewards could take various forms, such as:

  • Discounts
  • Freebies
  • Exclusive deals

The aim is to inspire loyalty by offering tangible benefits that customers would appreciate.

The Benefits of Loyalty Programs

Loyalty programs facilitate customer retention, paramount in today's crowded marketplace, where customer acquisition costs continue to rise. Businesses can nurture a dedicated following of repeat shoppers by incentivizing customers with loyalty points redeemable for discounts, free products, or exclusive perks.

Moreover, loyalty programs generate invaluable insights into consumer behavior. This enables merchants to tailor their offerings and marketing initiatives to the preferences of their most valuable customers.

Savvy retailers also structure their programs to award points for engaging activities like social media follows, product reviews, and referrals. This amplifies brand advocacy and word-of-mouth marketing.

The Impacts of Loyalty Programs

The Who's Who Rewards program by Evy's Tree is a shining example of successfully implementing an automated rewards app. It reported an impressive 83x return on investment, a 65% redemption rate, and a 58% increase in its repeat customer rate.

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Another inspiring success story is the Devoted Darlings Loyalty Program by Unique Vintage. Their use of a loyalty program led to a noticeable 10% increase in average order value and a 48% increase in orders from program members.

These cases demonstrate the undeniable potential of automated rewards apps in

  • Driving customer retention
  • Reducing ad spend
  • Boosting business performance

» Can you combine discounts? Here's how

Top Automated Rewards Apps on Shopify

Auto Rewards Toolkit

The Auto Rewards Toolkit is built around the principle that customer loyalty should be rewarded. It allows businesses to provide personalized discounts, percentage-offs, and free shipping options. The app also automates the entire process, eliminating the need for manual tracking and administration, saving time and energy. is a powerful app that allows businesses to implement a comprehensive rewards program. With features like points, VIP tiers, and referral benefits, it helps to create an engaging shopping experience that encourages its over 100,000 customers to keep coming back.

Loyalty Lion

Prominent in Europe, Loyalty Lion offers tiered membership models and in-depth insights into customer purchasing patterns. This makes it a sophisticated option for data-driven merchants.

Referral Candy

As the name implies, Referral Candy specializes in automating referral marketing campaigns to harness the power of word-of-mouth promotion and customer advocacy.

How to Implement a Successful Rewards Program

Egnition infographic showing the steps to implement a successful rewards program

1. Choose the Right App

Select an app that:

  • Aligns with your business objectives and customer base
  • Seamlessly integrates with your existing platforms
  • Offers excellent customer support
  • Offers a user-friendly interface

To find the best fit, evaluate options based on:

  • Features
  • Customization potential
  • Pricing

2. Define Your Rewards

Determine what kind of rewards you want to offer that will genuinely excite and motivate your customers. Will it be percentage discounts, exclusive deals, freebies, extended warranties, or something else?

Ensure that whatever you choose is desirable to your target audience and feasible for your business model. Vary reward types to cater to diverse preferences, and remember to reserve those items for customers.

3. Set Clear Program Rules

Establish straightforward rules for how customers can earn and redeem rewards. Consider awarding points for purchases, referrals, social follows, reviews, and more. Communicate these rules transparently, such as follow-up emails, to manage expectations, then set up and automate discount codes.

4. Promote Your Program

Ensure your customers know your rewards program by promoting it prominently on your website, emails, social media, and other marketing channels. Doing this will increase traffic to your program and potentially improve sales in your e-commerce store.

Use eye-catching visuals and compelling copy to highlight the benefits of enrollment.

5. Analyze and Optimize

Continuously analyze program performance metrics like enrollment rates, point redemption levels, and purchase behavior of members versus non-members. Use these insights to refine your rewards structure, communications, and promotions for maximum effectiveness.

» Easily create your Shopify customer reward system in a few steps

Common Pitfalls to Avoid When Automating Rewards

Despite their benefits, using automated rewards apps does not come without its challenges. For instance, segmenting your loyalty program is a critical step that should not be overlooked.

It’s essential to remember that a small percentage of customers often drive the majority of revenue, making it crucial to prioritize them in your loyalty strategies.

Moreover, maintaining simplicity should also be a priority. Overcomplicating the program might reduce participation, as customers may find it difficult to understand or redeem their rewards.

Lastly, effective communication about the rewards program is key. Utilize email campaigns and site announcements to ensure your customers know and understand the program's benefits.

The Future of Loyalty Programs

Looking ahead, we can expect to see an increasing focus on automation and personalization within loyalty programs. Advanced technologies such as AI will be leveraged to deliver personalized rewards.

Additionally, integrations with various marketing tools, including social media and content marketing platforms, will become even more prevalent.

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