Loyalty programs are a common feature in the modern shopping experience, especially in markets like the US and the UK. Many consumers are members of multiple loyalty programs—some of which they actively engage with, while others simply exist in the background. But what makes customers not only join these programs but also use them regularly? Research shows that five core factors drive active engagement in loyalty programs:

1. Personalization
2. Proactive communication
3. Aligned values
4. Flexible rewards
5. A great customer experience

Let’s explore these factors in detail and discuss how businesses, particularly those using Shopify, can optimize their loyalty programs to meet these customer expectations.

Do Customers Really Want and Use Loyalty Programs?

Yes, they do. The widespread adoption of loyalty programs suggests that customers not only want them but also use them frequently. The evidence is compelling:

• Loyalty program members spend up to 40% more than non-members on average.
• Members spend up to 164% more when redeeming rewards compared to non-members.
• Customers who join a loyalty program are 47% more likely to make a repeat purchase.

These statistics indicate that customers who participate in loyalty programs are more engaged, spend more, and are more likely to become repeat buyers. Given this, it’s crucial for businesses to understand and implement the factors that drive loyalty program success.

1. Customers Want Personalization

Personalization is key to making customers feel valued. Imagine joining a loyalty program and receiving emails addressed to “Dear Customer” instead of using your name. Even worse, the brand might recommend products that have nothing to do with your previous purchases. This lack of personalization can quickly lead to disengagement.

Customers expect personalized experiences:

• 70% of customers say they would stay loyal to a brand if they received personalized offers.
• 82% would share personal data for a better customer experience.
• 71% of consumers expect personalization in their interactions with brands.

To ensure personalization, businesses should:

• Address customers by name in all communications.
• Use loyalty program data to create more specific customer segments based on preferences, purchase history, and behavior.
• Encourage customers to complete profiles or quizzes that provide insights into their preferences, allowing for even more tailored recommendations.

2. Customers Want Proactive Communication

Effective communication is another crucial factor. Customers don’t want to be bombarded with messages, but they do want to be informed about their loyalty points, rewards, and opportunities to redeem them.

Statistics show the importance of proactive communication:

• 56% of global consumers say that brands’ efforts to build a relationship with them are key to maintaining their loyalty.
• 58% are more likely to make a purchase if they’ve subscribed to a brand’s texts.

Brands should set up automated triggers within their loyalty programs to notify customers about important updates, such as expiring points or upcoming rewards, through their preferred communication channels, whether that’s email, SMS, or push notifications.

3. Customers Want to See Values That Align with Theirs

Today’s consumers often use their spending power to support brands that share their values. Whether it’s social causes, environmental sustainability, or ethical practices, customers are looking for more than just products—they want to feel good about where their money is going.

• Two-thirds of US consumers say their shopping choices are influenced by social values.
• 68% of customers would remain loyal to a brand if it shared their values.

To tap into this, brands can integrate their values into their loyalty programs. For example, allowing customers to donate their loyalty points to charitable causes can resonate deeply with value-driven consumers.

4. Customers Want More Than Simple Discounts for Rewards

While discounts are appreciated, they shouldn’t be the only reward option. Customers value flexibility and variety in how they can redeem their points.

• 81% of consumers feel positive about brands that offer discounted or free shipping as part of their loyalty rewards.
• 61% of consumers appreciate surprise gifts and offers.

Businesses can create tiered loyalty programs that offer different types of rewards, such as early access to new products, exclusive events, or charitable donations, alongside traditional discounts.

5. Customers Want a Great Customer Experience

Finally, the overall customer experience (CX) is critical to the success of a loyalty program. If customers encounter issues or feel undervalued, they’re likely to disengage or leave the program altogether.

• 55% of customers would be loyal to a brand if they had an emotional connection to it.
• 74% of global consumers say customer service is crucial for brand loyalty.

To enhance CX, brands should actively seek and respond to customer feedback. Additionally, integrating loyalty program data with customer service platforms can help resolve issues more effectively, ensuring a seamless and satisfying experience for program members.

Conclusion

Loyalty programs have the potential to drive significant customer engagement and repeat business—if they’re done right. By focusing on personalization, proactive communication, shared values, flexible rewards, and a great customer experience, brands can create loyalty programs that not only attract customers but also keep them coming back. As the lines between transaction and relationship blur, it’s clear that today’s customers expect more from loyalty programs, and meeting these expectations is key to long-term success.