Six reasons you don't need a loyalty app on your Shopify website to increase customer loyalty
Desperate to add a customer loyalty app to your Shopify website? You might want to reconsider
Keeping customers loyal is an essential focus for all successful ecommerce businesses. But a customer's loyalty can be earned in many ways.
Lately, it seems loyalty apps are all the rage for small businesses and something nearly every client has asked me about this year.
Loyalty apps claim to reward customers the more they shop with you by offering points, freebies and discounts. But are they really worth adding to your website? And do they actually ever pay off?
I have strong feelings about this one and in short my answer is no, they’re not worth it and don’t actually increase customer loyalty.
I’ve summarised below six reasons why I don’t think you need a loyalty app and I’ve asked small business owners and online shoppers what they really think too.
Six reasons NOT to use a loyalty app on your Shopify website:
1. It will cost you money
Apps usually have a monthly cost (even if you’re not really using it) they often also charge a commision for every sale you make. Also if you’re planning on using something like Smile for rewards, there are the discounts you give to customers that you need to consider. All of this is eating into your margin and can small businesses really afford that?
Jo Lochhead from The Crafty Kit Company had this to say about recently removing the loyalty app from their website:
“We found that some customers had hundreds of points and never used them whilst others saved them all for a big purchase which would inevitably cut into our margins. We don’t need to offer a scheme because we make a unique product to our brand and our customers are loyal to us anyway.”
2. It will take you time
Firstly you have to find the right app, then get it set up on Shopify, not to mention the maintenance. And actually informing your customers about the scheme! You can’t just have it on your website and think it’s going to make a difference to customer conversion and how much they shop with you. If you don’t really simply break this down for customers, they’ll just totally ignore it.
3. You don’t sell products that people are loyal to
You can still have ‘loyal customers’ or ‘brand cheerleaders', whatever you want to call them but unless you sell a consumable product, think tea, coffee, moisturiser, toothpaste, then you’re not going to see the benefit of a loyalty scheme
Aime Cox-Tennant from Studio Cotton asks you to reframe the way you look at it:
“The last time I chatted about this was with a ceramist, I said something like ‘What type of businesses are people loyal to?’ We mentioned stuff like coffee shops, skincare brands - but not sellers of artisan handmade mugs!”
However Joy McMillan from The Glass of Joy has seen some success with her past business, where she did have a loyal customer base who appreciated the points:
“I loved ours when we were a yarn dyeing business - it was a simple, save points and get money off, although we did a couple of extra things for points for newsletter subscribers. I found that about 60% of customers would buy something rather than lose points”
4. You already have an almost free tool at your disposal
Yes I’m talking about email marketing - the channel with the highest ROI. Unless you can tell me you're absolutely nailing your emails, with multiple automations set up, super regular campaigns and healthy growth in subscribers. I’d suggest dedicating some of your time to your email account before even thinking about any loyalty schemes!
It really is the place to generate a higher customer return rate and nurture your valued subscribers. Think about what a regular customer is to you, how many times do they purchase a year, there’s ways to reach them with your email marketing alone. If you need a helping hand with your emails, I highly recommend Klaviyo and I can get you set up in under a month find out more here.
5. You’re not Boots
People KNOW all about the big brands long running loyalty schemes, Boots Points, Tesco Clubcard, Nandos Chillies. That’s because they have the marketing spend behind it and they are relentless with letting you know about how the scheme works, and how you can claim your rewards. So the real question I would put to a small business is, do you actually need one? And do you really have the time to be committing to communicating all this with your customers?
Here’s what Carly Stringer from Decadorn thinks about it from a customer perspective, and the brands she mentions have obviously got the time to keep reminding their customers about these incentives:
“I think they can be useful for stores with a wide range of products that are purchased regularly. Cosmetics really springs to mind. I'll use points at Boots, Sephora and Space NK because they build up quickly and you can use them across a huge range of products and brands.”
6. Are people even using it?
I’ve seen so many times that brands have set up their own scheme and it looks nice and is offering some lovely rewards to their customers but when you look into the data, nobody is actually using it. I mean what’s even the point if nobody uses it, you’ve wasted time and effort and it proves my earlier point, customers will shop with you regardless.
Aime Cox-Tennant from Studio Cotton said:
“We’ve had maybe 100+ ecommerce website clients over the years and at least half have brought up or attempted a loyalty scheme. Only one has ever seen any pay off”
Alternative options that small businesses could use to grow their customer loyalty on Shopify:
If you’re looking to gain more of the same type of customers, why not think about adding a refer-a-friend scheme instead? That way you can reward your loyal customers for recommending you to friends and gain news ones at the same time. Apps such as Referral Candy are really easy to set up on Shopify and it integrates with Klaviyo too. Overall I find it’s a much simpler way for customers to engage with your brand, which you can see here on small clothing brand Ivy’s website.
2. Subscribe & save
You might also be better off considering a subscription offer if you do happen to sell one of the consumable products I mentioned above. A subscription offer can be a better way to increase your CLV (customer lifetime value) it’s also an easy sell as you are making your customers lives easier by saving them having to come back and shop every month
Kirstie Beaven from Sonshine Magazine said:
“I think a subscription with a discount would be more appealing than loyalty. For example, I subscribe to loo roll - I wouldn’t have joined a loyalty scheme though!”
More views from small business owners and online shoppers:
“My gut feeling is they appeal more to a younger generation. Lots of our team who are in their early 20s, say that they often spend more if they know they get a ‘stamp’ for spending £20 and then even if their basket is £18 they add something else to get the stamp. I think often this is fashion and make up related though”
Kate Rumsey from Rumsey’s
“I was super keen to get a loyalty scheme set up and having been running it for nearly 2 years, I’ve been wondering if it’s worth it and whether I should remove it. I’d originally thought I could use points to motivate repeat customers or get my conversions up instead of running offers & discounts to everyone. However, I’m having to do both and I’m not convinced the cost is worth it anymore and it may be training my customers to never pay full price. I’ve recently added a tree buying app and this feels more aligned with my values, I just don’t know how to transition away from the loyalty scheme now.”
Laura Roberts from Rock & Realm
“I think for some businesses where you want customers to make repeat, regular purchases but they could easily go elsewhere to buy either your products or a replacement, they can be a good idea. E.g. Balance Me Skincare, they have two types of loyalty, 1 - referral scheme which gives each person £10 off but the credit only last one month after the friend buys. 2 - points based on how much you spend. I use both and I repeat purchase probably more often (literally had a delivery today...spent £70, only needed one thing but had a £10 credit to use so just ordered extra stuff).”
Christina Stone from Goldfinch Marketing
Why learn from me?
Hi, I’m Elle. I specialise in all things ecommerce for small businesses selling and growing online. I created The Ecommerce Assistant to help busy brand owners make more sales on their online shop by teaching them how to use Shopify + Klaviyo.