Running a Shopify store these days feels like swimming upstream. Ad costs are climbing, competition is everywhere, and keeping customers loyal? That’s become a real challenge. I’ve been working with Shopify stores for years, and I keep seeing the same problem: store owners spend all their energy chasing new customers while their existing ones quietly slip away.
Here’s what changed my perspective on this whole thing. I discovered that customers enrolled in loyalty programs have a 47% higher repeat purchase rate. Even more interesting? Existing customers are 67% more likely to buy again compared to new ones (assuming you give them great service on their first purchase). The kicker is that retaining customers can cost up to 25 times less than acquiring new ones.
But here’s the part that really got my attention: loyal customers become natural brand ambassadors. When they refer friends and family, those referrals convert four times better than cold traffic. Think about it - would you rather respond to a random ad or a recommendation from someone you trust?
Key Insights for Shopify Store Success
- Loyalty program members show 47% higher repeat purchase rates
- Customer retention costs up to 25x less than acquisition
- Referrals from loyal customers convert 4x better than cold traffic
- Existing customers are 67% more likely to make repeat purchases
- Points-based systems incentivize both spending and engagement
- VIP tiers create aspirational spending goals for customers
Setting Up Your Loyalty Program Foundation
I’m going to walk you through exactly how I set up loyalty programs that actually work. For this tutorial, I’ll be using LoyaltyLion (though the principles apply to any platform). What I like about this app is you can start completely free, and if you decide to upgrade, you can use code “Elliot” for 60% off your first two months.
Initial Configuration Steps
Choose Your Display Method
The first decision is how customers will see your rewards program. You can go with just an icon, text only, or both. I always recommend text and icon together - it’s clearer for customers and gets better engagement.
Set Your Point Values
This is where most people get stuck. The default is usually 5% (spend £100, get 500 points worth £5). I typically bump this to 10% for most stores because it feels more rewarding to customers. If you’re selling higher-ticket items, you might go even higher.
Ways Customers Can Earn Points
Purchase-Based Rewards
The foundation of any loyalty program is rewarding purchases. I set this up so customers earn 1,000 points for every £100 spent (that’s the 10% rate I mentioned). This becomes their primary way to accumulate points.
Engagement Activities
Here’s where it gets interesting. You can reward customers for actions that benefit your business:
- Writing reviews: 100 points (drives social proof)
- Website visits: 10 points (low value since it’s easy)
- Account creation: Variable points (builds your customer database)
- Newsletter signup: Higher points (valuable for email marketing)
- Social media follows: Points for Instagram, Facebook follows
- Birthday rewards: 150 points (creates emotional connection)
The Smart Approach to Point Distribution
I’ve learned to be strategic about point values. Website visits get fewer points because they’re easy. Newsletter signups get more because email addresses are valuable for marketing. Birthday rewards create a personal touch that customers remember.
Referral Programs That Actually Work
This is where loyalty programs show their real power. When customers refer friends, both parties should benefit. Here’s what I typically set up:
- Referrer reward: £5 coupon when their friend makes a purchase
- Friend reward: £5 coupon on their first order
- Minimum purchase requirements: Usually £25-50 to prevent abuse
The beauty of referrals is they bring in pre-qualified customers. Someone recommended your store, so they’re already interested.
VIP Tiers: Creating Aspiration
I always set up three tiers: Bronze, Silver, and Gold. Here’s why this works:
Bronze Tier (Starting level)
- Basic point earning rate
- Standard rewards
Silver Tier (500 points)
- 1.25x point earning rate
- Early access to sales
Gold Tier (1,000 points)
- 1.5x point earning rate
- Free shipping
- Exclusive products
The key is making each tier feel achievable while creating genuine value differences.
Email Integration and Automation
Your loyalty program needs to communicate with customers automatically. I set up emails for:
- Welcome to the program
- Points earned notifications
- Tier upgrades
- Referral confirmations
- Reward redemption confirmations
Make sure these emails match your brand style and tone. Generic-looking emails kill the personal feel you’re trying to create.
The Widget and User Experience
The rewards widget (that little icon on your site) needs to be positioned thoughtfully. I usually place it on the right side, about 20 pixels from the edge. If you have other widgets (like email popups), make sure they don’t overlap.
For the widget panel (what opens when customers click the widget), keep it clean and organized. Show:
- Current point balance
- Ways to earn more points
- Available rewards
- VIP tier status
- Referral options
Advanced Features Worth Considering
Limited-Time Events
During Black Friday or special occasions, you can run double-point days. This creates urgency and drives sales during key periods.
Dedicated Loyalty Page
Create a standalone page explaining your program. This helps with SEO and gives you a place to link from emails and social media.
Checkout Integration
If you’re on Shopify Plus, customers can redeem points directly at checkout. This reduces friction and increases redemption rates.
Measuring Success
Once your program is running, watch these metrics:
- Total loyalty members
- Points earned vs. redeemed
- Revenue from loyalty members vs. non-members
- Referral conversion rates
- Average order value for different VIP tiers
The analytics will show you which rewards are popular and which might need adjusting.
Common Mistakes to Avoid
Making points too hard to earn: If customers need to spend £500 to get a £5 reward, they’ll lose interest.
Complicated redemption: Keep the process simple. Customers should be able to redeem rewards in just a few clicks.
Forgetting about the experience: The program should feel rewarding, not like work.
Ignoring mobile users: Most customers will interact with your program on mobile, so test everything on smaller screens.
Practical Implementation Tips
| Feature | Recommended Setting | Why It Works |
|---|---|---|
| Point earning rate | 10% of purchase value | Feels generous without breaking margins |
| Review rewards | 100 points | Encourages social proof |
| Website visit | 10 points | Low value for easy action |
| Referral reward | £5 for both parties | Meaningful but not excessive |
| VIP tier thresholds | 250/500/1000 points | Achievable progression |
Start with these basics, then adjust based on your customer behavior and profit margins.
Getting Started Today
The beauty of modern loyalty apps is how quickly you can launch. Most of the setup I’ve described can be done in under an hour. The key is starting simple and improving as you learn what your customers respond to.
Don’t overthink the initial setup. Launch with basic point earning, a few redemption options, and referrals. You can always add VIP tiers, special events, and advanced features later.
Your customers are already deciding whether to come back to your store or shop elsewhere. A well-designed loyalty program gives them a reason to choose you, again and again.
FAQ
How many points should I give for different actions?
Start with 10% of purchase value for buying, 100 points for reviews, and 50 points for social follows. Adjust based on what drives the behavior you want.
What’s a good redemption threshold for rewards?
I recommend customers can get their first reward after spending £50-100. This feels achievable but requires meaningful engagement.
Should I offer percentage discounts or fixed amounts?
Fixed amounts (like £5 off) feel more concrete to customers than percentages. They’re easier to understand and budget for.
How do I prevent people from gaming the referral system?
Set minimum purchase requirements for referred customers and limit how many referrals one person can make per month.
What if customers accumulate points but never redeem them?
This is actually good for your cash flow, but consider sending reminder emails or offering limited-time bonus redemption rates to encourage usage.