The eCommerce brands winning in 2025 and beyond aren’t on the acquisition hamster wheel, constantly chasing more customers in an effort to outpace churn.
Instead, they’ve mastered customer loyalty and keep customers coming back for more time and time again. You can do the same for your own brand. We’ll show you how to build a customer loyalty program that pays for itself in this guide.
Whether you're trying to increase customer lifetime value (LTV) or simply stand out from the competition by creating more personalized experiences, it’s possible with the right loyalty program.
Understanding how to create a customer loyalty program starts with picking a platform built for retention, and that’s Rivo. Thousands of eCommerce brands leverage our Shopify loyalty program for its seamless setup and ease of customization.
Create a loyalty program that pays for itself, with some brands seeing a 52x ROI and a 3.1x repeat purchase rate. Get in touch today to take the next step, or learn more about how to start a customer loyalty program below!
What is a Customer Loyalty Program?
As the name implies, this is a structured way to reward people for engaging with your brand over and over again. The primary goal of any customer loyalty program is to drive repeat purchases, but as you’ll soon see, this is just the tip of the iceberg for what’s possible.
Customers can earn rewards not just for shopping, but for referring friends, writing reviews, completing a quiz, or even following your brand on social media. All of these things move the needle, no matter how marginally, for your brand.
A customer is less likely to churn, bouncing over to a competitor when they see value in sticking with your brand instead - whether that’s through points, perks, or exclusive access. From your perspective, it’s a way to reinforce behavior that actually grows your business.
The best way we can describe a customer loyalty program is as a retention engine that turns one-time buyers into diehard customers that come back for more, time and time again - ideally, bringing their friends and family along for the fun as well.
Why Build a Customer Loyalty Program For Your Brand?
You’re already starting to see what’s possible from a well-structured loyalty program, but hear us out if you’re still on the fence. This is absolutely worth the effort and resource investment, with a tangible loyalty program ROI to show for your work. Here’s why.
Offset Rising Acquisition Costs With Smarter Retention
The biggest benefit of increasing customer loyalty is being able to spend more on ads without batting an eye. So many brands today are operating on razor-thin margins as the cost of acquisition continues to climb higher.
Loyalty programs help by nurturing customer relationships and reminding users to come back for more. Rather than trying to reduce ad costs, you can increase the amount of money you earn from each customer. This is known as LTV, and it’s one of the key customer retention KPIs you’ll want to track as you get started building a customer loyalty program.
Think of it this way: if you have to spend $100 to acquire a customer and they only spend $100, you’re constantly spinning your tires. But if that same customer spends $500 over the next few years in the form of higher AOVs and frequent repeat purchases, it’s a no-brainer.
You can be more aggressive with acquisition, knowing you’ll make it up on the back-end.
Strengthen Brand Affinity and Emotional Connection
Discounts fade. Features get copied. What sticks is how your brand makes someone feel. Loyalty programs give you tools to show appreciation in ways that actually matter to your customers, like surprise rewards, exclusive access, or recognition for long-term engagement.
That adds up over time into a relationship that feels personal rather than transactional. That kind of connection turns customers into brand advocates. After all, customer retention statistics suggest customers are 60% more likely to become repeat buyers when they receive personalized experiences.
Collect Zero-Party Data You Can Actually Use
Customers give you permission to learn more about them the moment they opt into your loyalty program, in the form of what they like, how they shop, when they return, and what keeps them coming back.
You can’t put a price on the value of that data. You can in turn use loyalty segmentation to tailor your messaging and fine-tune your product strategy. Say goodbye to playing the guessing game, and start making moves with confidence.
Differentiate From Competitors With a Branded Experience
From how perks are framed to the tone of your emails to the design of your loyalty dashboard, every touchpoint reinforces what makes your brand different. This is your edge in a saturated market where products can start to feel interchangeable.
Your competitors are learning how to build a customer loyalty program, so you better do the same - and you need to do it better. We’re here to help you get started by choosing the right type of loyalty program.
Choosing the Right Type of Brand Loyalty Program
Not every loyalty program needs to revolve around points - in fact, there are PLENTY of great alternatives to loyalty points.
The structure you choose as you learn how to build a customer loyalty program needs to reflect how your customers shop, what motivates them to come back, and how your brand delivers value.
Points-Based Loyalty Programs
This is the most familiar structure: customers earn points for completing actions (usually purchases), and they redeem those points for rewards. It’s simple to understand and easy to scale.
Points work best for brands with high purchase frequency and a wide product catalog. Think beauty, food and beverage, supplements, or apparel. Customers see progress quickly and feel like they’re working towards a goal in every interaction, gamifying the experience for them.
The key is making sure the rewards are tangible, the math is easy to follow, and points never feel like Monopoly money. Sometimes, though, points don’t make sense - and there are other options worth considering.
Tiered Loyalty Programs
Customers move up through different levels based on their spend or engagement in a tiered system, each tier unlocking better and better perks. This approach taps into status psychology: people like knowing they’ve earned VIP treatment.
It’s especially effective for brands with high repeat purchase potential or premium positioning. Tiers do a great job encouraging repeat behaviors without relying on discounts if your average customer spends more over time or you simply want to incentivize larger orders.
This is where the loyalty ladder comes in. The higher customers climb, the more exclusive the experience comes and the more value they get out of the program.
Cashback or Instant Rewards Programs
Sometimes, customers just want something now. Cashback or instant discount models give them a percentage of their purchase back, or a flat savings amount on the next order without waiting to accumulate points.
This structure works well for brands with many one-time buyers or deal-seekers. It also helps increase first-to-second purchase conversion by delivering a tangible reward right after checkout, giving customers a reason to place that next order.
Paid Membership or Access-Based Programs
This model is pretty unique in that it offers a recurring revenue stream for your business. Customers pay to join a program and receive ongoing perks (free shipping, exclusive product access, dedicated support, etc.).
Paid programs work well for brands with strong brand affinity and high repeat potential. They’re also great for businesses with a loyal base that already behaves like members, and they just want a structure to formalize it.
You can learn more about membership vs loyalty program structure in our blog. But at this point, it’s time we got into how to build a customer loyalty program!
How to Start a Customer Loyalty Program: Step-by-Step Guide
Building a loyalty program that actually works takes more than plugging in a few reward tiers and hoping for the best. This system has to align with your brand, customers, and goals.
It’s not rocket science, though, as you can learn how to start a customer loyalty program that drives an ROI in just a few moments. We encourage you to let our experts walk you through the process one-on-one, but here are the basic steps.
Define Your Goals and Success Metrics
You need to know why you’re building this program in the first place before you can touch any platform or decide on perks. Are you trying to drive more repeat purchases? Increase average order value? Boost retention in the first 90 days?
You need to be specific, as simply saying you want to “increase loyalty” isn’t a strategy. That’s the result. Nail down measurable goals like:
- Increase repeat purchase rate from 22% to 30%
- Lift AOV by $10 among loyalty members
- Reach a 40% redemption rate on rewards
With clear targets in mind you can reverse-engineer the program’s structure and evaluate performance with more precision later on.
Know Your Customer Behavior and Buying Patterns
Your loyalty program needs to match how people already shop. For instance, beauty brands might see customers placing orders every month or every other month to stock back up on the essentials. You can reward frequency to foster this result.
But that same approach wouldn’t make sense for a brand that sells furniture, or even apparel. You’ll need to study purchase frequency, AOV, time between orders, most common products, and returning customer behavior.
From there, you’ll have a better understanding of not just where there’s room for improvement in your brand, but what motivates your audience and how loyalty can help move the needle.
Pick a Platform to Build Your Loyalty Program on
This is perhaps the most important step in learning how to build a loyalty program. Don’t try to cobble something together from scratch. Choose a platform that integrates directly with Shopify, allows for flexible reward rules, and gives you visibility into customer behavior.
Here are some of the most important features to look for:
- Segmenting based on tags, spend, or actions
- Customizable landing pages
- Post-purchase flows and reward emails
- Analytics dashboards and exportable data
Rivo checks all these boxes and more. Our solution is trusted by 7,000+ leading Shopify brands that are seeing a strong ROI, as high as 52x in some cases. Effortlessly customize your loyalty landing page, segment your existing customers, and offer the right rewards for the right actions.
You can take a closer look at your options below and how Rivo stacks up:
Or, get in touch with our customer service team and we’ll walk you through a demo so you can get a better sense of what’s possible with Rivo. In the meantime, let’s continue through our guide on how to start a loyalty program.
Choose the Right Loyalty Program Structure
Think back to the different types of loyalty programs we introduced you to above - does one of them stand out as a more aligned fit? Don’t overcomplicate this. Pick the model that best fits your business today, and know you can always make changes over time.
Many brands offer a blend of different programs, like a points-based program for most of their customers and VIP tiers for their most loyal users who want even more.
Map Out Actions That Earn Rewards
Your loyalty program shouldn’t only reward purchases. Sure, that’s what drives an ROI - but you can use your program to encourage a range of behaviors that move the needle for your brand:
- Referring a friend
- Leaving a product review
- Following you on social
- Completing a profile or quiz
- Signing up for SMS or email
- Celebrating a birthday
Match the value of the reward to the effort of the action. Referrals deserve more than a social follow. Make it feel fair, and don’t let customers guess what’s worth their time.
Create Your Loyalty Landing Page
This is your home base for the entire program. It’s where customers go to check their rewards, understand how the program works, and decide what to do next. We make it easy to design an on-brand loyalty landing page at Rivo. Here are some things you should include:
- A simple headline and 1-2 sentence explanation
- A breakdown of how to earn and redeem
- A points tracker or tier progress indicator
- CTAs to refer, shop, or complete a profile
- FAQ for common confusion points
If customers can’t understand how it works in under 30 seconds, your program’s already losing steam. This is why loyalty programs fail a lot of the time: customers just don’t get it, and they won’t go out of their way to figure it out.
Launch and Promote the Program
Don’t just quietly hit publish. Make the program a moment just like you would a new product launch: send emails/SMS messages, add banners on-site, post on social media, and add post-pruchase CTAs and thank-you flows.
The more integrated the program feels, the more adoption you’ll get. And once people start earning, keep momentum going with automated nudges:
“You’re 50 points away from your next reward”
“You just unlocked free shipping - don’t forget to use it!”
“Your points are about to expire - redeem them now”
The more effort you put into keeping your loyalty program top-of-mind, the better results you’ll see from it. That goes for optimizing the program over time, too…
Monitor, Optimize, and Adjust Based on Data
You know how to build a customer loyalty program now! But even after getting the ball rolling, the job is far from finished. In fact, it’ll never be done. This is an ongoing strategy that requires fine-tuning based on data. Check the numbers:
- What’s the enrollment rate?
- Are people redeeming?
- Which rewards are actually being used?
- Are loyalty members placing more orders or spending more?
You can A/B test different rewards, and even ask your most loyal customers for feedback on what they’d like to see. The point is you need to treat the program like a product that gets iterated, not a box you check.
Examples You Can Gain Inspiration From for Your Own Customer Loyalty Program
Not sure how to reward customer loyalty and get the fun underway? We’ve got so many great case studies here on our site, whether you’re trying to launch the best beauty loyalty program or you sell jewelry. Here are a few examples of loyalty programs turning a profit:
- Ultra Football earned $800K in loyalty revenue in under 6 months after leveraging the Rivo platform.
- Rareform launched a loyalty & referrals program that increased the 30-day repurchase rate by nearly 27% with the help of Rivo.
- Fresh Chile’s paid loyalty membership drove $40k ARR on launch alongside a 56% lift in member AOV.
There are plenty more success stories over on our website, so take a look to learn more about what’s possible with Rivo. Or, take the next step today as we wrap up our guide on how to start a customer loyalty program.
Final Words on How to Build a Customer Loyalty Program
Learning how to create a customer loyalty program is a powerful way to boost retention and LTV, offsetting high acquisition costs and setting your brand apart in an increasingly crowded eCommerce space.
We hope you feel confident in how to build a customer loyalty program at this point, from choosing the right structure to picking a platform to bring your vision to life on. Create a branded loyalty experience your customers will come back for today with Rivo!
