The average customer acquisition cost for e-commerce continues to rise, which is why making more money on the back end is so important for Shopify brands today.
You need to increase customer lifetime value (LTV) to be more profitable and sustainable. Otherwise, you’re constantly fighting to break even. A customer loyalty program can be just what you need.
But are loyalty programs worth it? Some brands are hesitant, given the internal resources that will go into getting the program off the ground. There are also costs associated with running these programs. That said, the loyalty program benefits are impossible to ignore.
Not only can you earn more money from existing customers through a well-structured loyalty program, but you can also generate word-of-mouth sales and create deeper relationships with your audience.
How about some hard facts about the loyalty program ROI if you’re still on the fence: brands that leverage the Rivo Shopify loyalty program platform see (on average) a 52x ROI and a 3.1x repeat purchase rate. Join 7,000 brands who run on Rivo today!
What is a Customer Loyalty Program?
A customer loyalty program is a structured way to reward people who shop with you more than once. The simplest way to look at it is a means of turning occasional buyers into repeat customers by offering something of value in return.
That could be points, discounts, exclusive products, or early access to new drops. Points are definitely the most common approach for how to reward customer loyalty in Shopify storefronts specifically, but there are plenty of alternatives to loyalty points if you want to get creative.
Customers aren’t just rewarded for making purchases, either. They can earn for creating an account, following on social media, leaving a review, or referring a friend. The goal is to increase loyalty across the board, not just transactionally. You want customers to feel like they’re family.
Most loyalty programs live somewhere between your storefront and your post-purchase flows, giving customers clear visibility into their rewards and nudging them to come back for more.
But, there’s no question that a lot of time, effort, and financial resources goes into building a loyalty program. So, are loyalty programs worth it for Shopify brands today?
Are Loyalty Programs Worth It?
The short answer is yes - and we have the customer retention statistics to back it up. Loyalty programs can raise your revenue by up to 25% annually. 83% of customers say they’re more likely to shop with a brand that has a loyalty program compared to a competitor that doesn’t.
But here’s another - loyal customers can make up to 65% of your business, even though they’re a small faction of total customers. The point is, yes, loyalty programs are worth it. We’ll take a closer look at the value these bring to your brand below.
Why Retention Matters More Than Acquisition
We talk a lot about customer acquisition vs retention because it’s a constant balancing act for Shopify brands. Most Shopify brands hit a ceiling when they rely too heavily on acquisition.
Paid ads get more expensive. Email lists go stale. Conversion rates plateau. A loyalty program gives you a system to retain the customers you already paid for, turning them into repeat buyers, brand advocates, and long-term revenue drivers.
In other words, focusing more on retention allows you to get off the acquisition hamster wheel where you’re endlessly chasing growth, but really, just spinning your tires.
Repeat customers spend more per order, convert at higher rates, and are far more likely to refer friends. Increasing retention by just 5% can lift profits 25-95% because you’re earning more without spending more.
The Real Impact of Loyalty Programs on Revenue
So, why is customer loyalty important? It boosts all the customer retention KPIs you’re focused on. It can increase repeat purchase rate, average order value, and customer lifetime value all while lowering dependency on discounts or ads.
Give points for purchases, referrals, reviews, or birthdays. Let customers unlock exclusive perks, tiers, or early access. Every action they take deepens the relationship and raises their lifetime value.
When Loyalty Programs Don’t Work
Be clear, there are plenty of examples of brands asking, are loyalty programs worth it, because they tried one and weren’t impressed with the results. There are plenty of reasons why loyalty programs fail, and all of these reasons have simple solutions.
Loyalty programs won’t move the needle when they’re lazy. Customers simply won’t use the program if rewards aren’t compelling, redemption is confusing, or your program is hard to find.
There needs to be real effort put into the program to drive an ROI. Programs that feel bolted on instead of baked into the customer experience will leave you unimpressed at the end of the day.
Meanwhile, the brands that win treat loyalty like a core growth channel. They track usage, iterate on reward rules, and actually market the program like they would a new product drop.
So, let’s get into some quick tips on making sure your loyalty program is worth it - for you AND your customers.
Tips on Making the Most of Your Brand Loyalty Program
Simply having a loyalty program won’t cut it. You need to go above and beyond to make sure it’s something customers get excited about leveraging. Here’s what makes the difference.
Your Loyalty Program is Only Worth it if the Rewards Are Worth it
Are loyalty programs worth it? The best way to think about it is from the customers’ perspective. Are the rewards you’re offering worth it to them? If not, you’ll have a difficult time seeing results.
Nobody’s getting excited over 100 points for 5% off. The incentive has to feel like a win. Start by thinking about what your customers actually care about. This could be free shipping, exclusive access, early drops, or high-dollar discounts.
One of the best pieces of advice we have ot offer is to actually poll your most loyal customers and find out exactly what they’re looking for. There’s no need to play the guessing game! Take the time to A/B test different reward structures and see what moves the needle most.
Make the Earning and Redemption Process Seamless
Points are only motivating if they’re visible, easy to earn, and even easier to use. Show point balances in-account. Add reward previews directly to your PDPs and checkout.
Don’t make customers jump through hoops. No one wants to decode an email, open a dashboard, and paste in a coupon code just to redeem. One-click should be the goal.
Promote It Like a Product Launch (and Continue to Do So)
Your loyalty program may as well not exist if it’s buried in the footer of your website. Build hype at launch using email, SMS, pop-ups, even paid ads.
But more importantly, keep the drumbeat going long after the initial launch. Integrate it into your post-purchase flows. Mention it in every campaign. Tease new rewards or tiers. It should be part of your ongoing retention strategy, not a one-time announcement.
Personalize With Segments and Data
A one-size-fits-all program doesn’t work with paid advertising, and it certainly won’t cut it with your loyalty program either. Customers who receive personalized experiences are 60% more likely to become repeat buyers.
In other words, you must focus on loyalty segmentation, which we make super simple through Shopify customer accounts integration. Use Shopify tags, customer lifetime value, or order history to tailor how and when you reward.
For instance, you could give high-value customers surprise gifts. Or, show returning shoppers their point progress. Segment by product category to make referrals more targeted.
Keep It Fresh With Campaigns and Updates
Loyalty gets stale fast if it’s always the same. Keep things moving with limited-time campaigns. That could be a double point weekend, seasonal perks, or member-only drops. Use tiers to unlock new benefits over time.
Test new rewards, rotate offers, and track what’s working. A static program is easy to ignore. A dynamic one creates urgency and habit. You get out of loyalty what you put in, so it can be as worth it as you’re willing to work for!
Wrapping Up Our Guide to the Benefits of Loyalty Programs
In closing, are loyalty programs worth it? Yes. that is, when rewards feel real, redemption is seamless, and campaigns stay fresh. You can create more than just repeat customers. You build community, trust, and long-term brand equity.
But too many brands phone it in and wonder why loyalty doesn’t deliver. The truth is, success comes from treating your program like a core product - one that’s easy to use, constantly evolving, and deeply connected to your customer journey.
Make your loyalty program a revenue driver, not a checkbox. Start building your retention engine with Rivo today and see for yourself what a difference customer loyalty programs can make on your bottom line!
