7 Steps to Launch an SMS Loyalty Program That Drives Results

Many brands still believe that acquiring new customers is the ultimate growth lever. Yet, neglecting existing customers means leaving significant revenue on the table, as repeat buyers often spend more and cost less to retain. What if you could transform your current customer base into a predictable engine for sales and advocacy?

This guide will show you how to:

• Understand the core components and benefits of an SMS loyalty program.
• Build a high-converting SMS loyalty program in seven actionable steps.
• Implement best practices and avoid common pitfalls for sustained success.

How to Build an SMS Loyalty Program in 7 Steps

Ready to create your own SMS loyalty program? By following these seven steps, you can design a program that not only retains customers but also drives significant growth for your ecommerce store.

This roadmap will guide you from initial concept to ongoing optimization.

Step 1: Define Your Loyalty Program’s Strategic Foundation

Before thinking about specific rewards, you must first define the overarching strategic goal and structure of your SMS loyalty program. This foundation will guide all subsequent decisions, ensuring your program aligns with your broader business objectives and customer behavior.

Consider what you primarily want to achieve:

• Increase Purchase Frequency? A points-based system, where customers earn rewards for every purchase or interaction, can be highly effective. This model encourages regular customer engagement and makes even smaller transactions feel rewarding.

• Boost Average Order Value (AOV) & Reward Top Spenders? A tiered program is ideal. Customers unlock progressively better benefits and status as their spending or engagement increases, creating aspiration and recognizing your most valuable patrons.

• Foster a Strong Brand Community & Exclusivity? A perks-driven (or VIP) program focuses on offering unique benefits not available to the general public, like early access to sales, members-only products, or special services. This model excels at making customers feel like insiders and building strong brand advocates.

• Simplify Rewards & Offer Direct Value? A cash-back program, where customers earn a percentage of their spend back as store credit, is straightforward and easily understood, offering a clear monetary incentive.

Step 2: Build Your SMS Subscriber List

You can’t have an SMS loyalty program without members. Building your subscriber list must be done compliantly and effectively.

Here’s how to grow your list ethically:

• Website Pop-ups and Forms: Use clear calls-to-action on your website, offering an incentive (e.g., “Join our VIP SMS list for 15% off your next order and exclusive loyalty rewards!”). Ensure your sign-up form includes language about consent to receive recurring automated marketing messages.

• Checkout Opt-In: Add a checkbox during the checkout process for customers to join your SMS loyalty program. Make it clear what they’re signing up for.

• Email Campaigns: Invite your existing email subscribers to join your SMS list for more immediate updates and exclusive loyalty text messages.
• In-Store Sign-ups (if applicable): If you have a physical presence, encourage sign-ups at the point of sale for your program in store.

• Keywords to Text: Promote a keyword (e.g., “Text LOYALTY to 12345”) that customers can send to opt-in.

• Social Media Promotion: Announce your SMS loyalty program on your social channels, linking directly to a sign-up page.

Crucially, always collect explicit consent. This means customers must knowingly agree to receive text messages from your brand. Keep records of this consent.

Read Next:

• The Complete SMS Opt-in Playbook for 2025: Tips & Examples
• 15 Ways to Grow Your SMS List (No One Talks About #3)

Step 3: Choose the Right Rewards System

With your program’s strategic structure in place (from Step 1), it’s time to design the actual rewards that will motivate your customers and make your loyalty program truly compelling. The key is to offer a catalog of benefits that are both valuable to your audience and sustainable for your business.

Consider these reward options:

• Discounts: Percentage-off or dollar-off coupons are always popular.
• Free Products: Offer a specific product or a choice from a selection once a certain threshold is met.
• Free Shipping: A highly valued perk, especially for online shoppers.
• Exclusive Access: Early access to sales, new product launches, or limited-edition items.
• VIP Experiences: Invites to special events (online or offline), personalized consultations, or entry into exclusive contests.
• Partner Rewards: Collaborate with complementary brands to offer unique rewards.

Determining Reward Value & Attainability: When selecting and valuing rewards, carefully consider:

1. Perceived Value to Customer: What will genuinely excite them and feel like a worthwhile reward for their loyalty? Survey your customers or analyze purchase data for clues.
2. Cost to Your Business: Calculate the margin on discounted items or the cost of goods for free products. Ensure the rewards are financially viable and contribute to overall profitability.
3. Attainability & Motivation: Rewards shouldn’t be so difficult to achieve that customers give up, nor so easy that they devalue your offerings. Create a clear path to earning rewards that keeps customers motivated.

Your rewards catalog should be dynamic. Periodically review and refresh your offerings based on redemption rates, customer feedback, and changing business goals to keep your loyalty program engaging and effective.

Read Next: 11 Types of Discounts to Use in SMS Marketing Campaigns to Drive More Sales

Step 4: Set Up Your Technical Infrastructure

For Shopify stores, setting up the technical side of an SMS loyalty program is often streamlined by using dedicated SMS marketing apps.

Here’s a general outline of what’s involved:

1. Choose an SMS Platform: Select an SMS marketing app that integrates with Shopify and offers loyalty program features. Look for capabilities like segmentation, automation, analytics, and, importantly, compliance tools. TxtCart, for example, is built for this.
2. Integrate with Shopify: Connect the SMS app to your Shopify store. This usually involves a simple authorization process and allows the app to access customer data and purchase history (with appropriate permissions).
3. Configure Opt-In Methods: Set up your chosen methods for collecting phone numbers and consent (pop-ups, checkout opt-in, keywords).
4. Define Loyalty Logic: Within the SMS platform, configure the rules for your loyalty program (e.g., how points are earned, what rewards are available at different tiers, how redemption works).
5. Set Up Automated Messages: Create automated workflows for welcome messages, point balance updates, reward notifications, and birthday messages.

Step 5: Create Engaging Loyalty Messages

Your SMS messages are the primary touchpoint for your loyalty program. They need to be concise, compelling, and drive action.

Here are a few templates and examples:

• Welcome Message:
  • “Hey [Customer Name]! Welcome to the [Your Brand] VIP Club! ✨ Your 15% off welcome code: VIP15. Stay tuned for exclusive perks! Txt STOP to end.”
• Points Update:
  • “Hi [Customer Name], great news! You’ve earned 50 more points with [Your Brand]. Total: 250 points. Only 50 more to your next reward! Shop: [Link]”
• Reward Unlocked:
  • “[Your Brand] Loyalty: Congrats, [Customer Name]! You’ve unlocked a $10 reward! 🎁 Use code MYREWARD10 at checkout: [Link] Enjoy!”
• Tier Upgrade:
  • “You’re a star, [Customer Name]! 🌟 You’ve reached Gold Tier status at [Your Brand]! Enjoy new perks like free shipping on all orders. See details: [Link]”
• Exclusive Offer:
  • “VIP Alert! 🤫 [Customer Name], get early access to our new collection + an extra 10% off as a [Your Brand] loyalty member. Ends tonight! Shop now: [Link]”

BTW, Crafting these messages and managing responses can be streamlined with the right tools. TxtCart’s AI Copy Assistant helps you write high-converting loyalty messages in minutes. But engagement doesn’t stop at sending.

Our Conversational AI can transform these interactions into genuine two-way dialogues. When customers reply with questions, the AI, powered by a built-in knowledge base that you can continuously feed with pre-answered questions, can provide instant, accurate answers.

This not only offers a seamless customer experience but also frees up your team while making your loyalty program feel more personal and responsive, truly enhancing the customer experience.

Step 6: Implement Automation Workflows

Automation is your best friend in managing an SMS loyalty program efficiently. It ensures timely communication without manual intervention.

Set up workflows for key customer actions and milestones:

• New Subscriber Welcome: Automatically send a welcome message with an initial offer as soon as a customer signs up.
• Post-Purchase Points Update: Trigger a message after a purchase confirming points earned.
• Reward Threshold Reached: Notify customers when they’ve earned enough points for a reward or unlocked a new tier.
• Birthday/Anniversary Messages: Send a special offer or bonus points on a customer’s birthday or their anniversary of joining the program.
• Re-engagement for Inactive Members: If a loyalty program member hasn’t purchased in a while, send a gentle reminder of their points balance or a special offer to entice them back.
• Points Expiration Reminders: If points expire, give customers a heads-up to encourage them to use their rewards.

These automated touchpoints keep your program active and your customers engaged with minimal ongoing effort.

Looking to automate your loyalty program messages? TxtCart’s smart customer segmentation allows you to filter audiences by purchase behavior, engagement levels, and contact history, making it easy to send targeted loyalty updates to specific customer groups like repeat buyers or recently inactive customers.

Pair this with TxtCart’s one-click automations to automatically send tier upgrade congratulations, deliver personalized reward notifications, and even re-engage members who are in-active for a certain amount of days.

Read Next:

• eCommerce Marketing Automation: 8 Actionable Strategies & Tools
• Strategies to Boost Sales From Your SMS Automation 2025

Step 7: Track Performance and Optimize

Launching your SMS loyalty program is just the beginning. Continuous tracking and optimization are key to its long-term success and maximizing your ROI.

Regularly monitor these key metrics to understand what’s working and what’s not:

Metric	Improvement Strategies
Subscriber Growth Rate	A/B test different opt-in incentives (e.g., “15% off your next order” vs. “Unlock exclusive early access”). Promote the SMS loyalty program via a sticky bar on your website or in email signatures.
Opt-Out Rate	Review message frequency – you might be sending too many. Also, analyze the content of messages preceding opt-outs. Are they irrelevant to that segment? Use TxtCart’s segmentation to send more targeted offers.
Engagement Rate (Click-Through Rate – CTR)	Test different calls-to-action (CTAs) – make them more urgent or benefit-driven (e.g., “Claim Your Reward Now!” vs. “See details”). Experiment with including emojis or varying message length.
Redemption Rate	If low, the rewards might not be appealing, or the redemption process could be too complex. Simplify redemption (e.g., auto-apply codes via link). Send timely reminders before rewards expire.
Repeat Purchase Rate (Members)	If lower than expected, ensure your loyalty tiers or points offer tangible value quickly. Introduce surprise bonus points after a second or third purchase to encourage the habit.
Average Order Value (AOV) of Members	Offer tiered rewards that unlock at higher spending thresholds (e.g., “Spend $75, get free shipping. Spend $100, get free shipping + a gift!”).
Revenue Attributed to Loyalty Program	Track this closely using unique discount codes for loyalty messages. If low, analyze offer strength and targeting. TxtCart’s Revenue Analytics makes this easy by showing direct income from each campaign.
Customer Lifetime Value (CLV) of Members	If not significantly higher than non-members, enhance the exclusivity of your program. Offer unique experiences or products only available to loyal customers to foster long-term commitment like early access to sales or a sale only for loyalty program’s members.

It’s crucial to know what’s resonating with your audience and what’s falling flat to make smart, data-driven decisions that boost customer loyalty and drive sales.

This is where robust analytics become invaluable. For instance, TxtCart’s Campaign & Revenue Analytics doesn’t just show you numbers; it provides a clear view of how your SMS loyalty messages directly translate into revenue. Also, it simplifies A/B testing, letting you test variations, track performance, and optimize for maximum impact.

By tracking key performance indicators through an intuitive dashboard, you can quickly pinpoint which offers are most compelling, which segments are most engaged, and where you can refine your approach for even better results. This visibility empowers you to stop guessing and start making strategic adjustments that enhance program effectiveness and profitability.

Read Next: SMS Marketing Analytics: 10 SMS Metrics You Cannot Ignore

The SMS Loyalty Matrix: Choosing Your Program

Deciding on the right SMS loyalty program structure can be tricky. The “SMS Loyalty Matrix” is a framework to help you choose the best approach based on your business specifics.

This matrix considers your Average Order Value (AOV), Purchase Frequency, Customer Lifetime Value (CLV), and Product Category.

Business Profile	Dominant Loyalty Driver	Recommended Program Structure
Low AOV, High Frequency	Small Rewards	Points-Based, Perks (e.g., free item after X purchases)
High AOV, Low Frequency	Exclusivity, Status	Tiered, VIP/Perks
Moderate AOV, Moderate Frequency	Value, Milestones	Hybrid (Points + Tiers)

How to Use the Matrix:

1. Identify Your Profile: Where does your business primarily fit? For example, if you sell artisan coffee beans (relatively low AOV, customers might buy monthly – moderate frequency), you might lean towards a points system or a hybrid.
2. Consider Loyalty Drivers: What motivates your customers? Is it saving money on frequent small purchases, or feeling like a VIP when making a significant investment?
3. Select Structure: Use the “Recommended Program Structure” as a starting point.
   • Points-Based: Best for encouraging frequent, smaller purchases. The accumulation of points feels rewarding.
   • Tiered: Ideal for businesses where AOV is higher, and you want to reward increasing levels of spend and loyalty with escalating benefits. Creates aspiration.
   • Perks/VIP: Excellent for creating a sense of community and exclusivity, regardless of AOV, but particularly powerful for brands with strong identities or subscription models.
4. Determine Messaging Frequency:
   • High Frequency Purchases: Can sustain more frequent (but still valuable) messages – e.g., weekly updates on points or special offers for frequent buyers.
   • Low Frequency Purchases: Less frequent messages are better to avoid fatigue. Focus on major announcements, tier upgrades, or very exclusive offers.
5. Tailor the Focus: Adapt the “Example Focus” to your product category.

This matrix isn’t rigid but provides a strategic lens to ensure your SMS loyalty program aligns with how your customers shop and what they value, maximizing its potential to build customer loyalty.

SMS Loyalty Program Best Practices

To truly succeed with your text message loyalty program, adhering to best practices is non-negotiable. These guidelines will help you build trust, maximize engagement, and stay on the right side of regulations.

Let’s cover the essentials for running a top-tier program.

Compliance and Permission-Based Marketing

This is paramount. Always, always get explicit opt-in consent before sending any SMS messages, including those for your loyalty program.

• Clear Consent: Your sign-up process must clearly state that users are agreeing to receive recurring automated marketing text messages from your brand and that consent is not a condition of purchase.
• Opt-Out Mechanism: Every message must include a clear and easy way to opt out (e.g., “Text STOP to unsubscribe”). Honor these requests promptly.
• Quiet Hours: Be mindful of when you send messages. Avoid sending texts very early in the morning or late at night. Many SMS platforms have built-in quiet hours settings.
• Maintain Records: Keep records of consent. This is crucial for TCPA (Telephone Consumer Protection Act) compliance in the US and similar regulations elsewhere.
• Privacy Policy: Ensure your privacy policy is updated to include your SMS marketing practices.

BTW, TxtCart ensures full compliance by seamlessly including clear opt-out instructions (e.g., “STOP to opt-out”) in every message. This not only meets legal requirements but also builds trust with your customers by respecting their preferences and making it easy to unsubscribe at any time.

Read Next:

• SMS Marketing Compliance 101: A Guide For Shopify Businesses
• TCPA Compliance Guide for SMS Marketing [+ Checklist]

Personalization Strategies That Drive Results

Generic messages get ignored. Personalization makes your loyalty program members feel seen and valued, significantly boosting engagement and conversion rates.

Go beyond just using a customer’s first name:

• Purchase History: Send offers related to past purchases or categories they’ve shown interest in. “Hi [Name], love your [Previous Product]? Our new [Related Product] just dropped! As a loyalty member, get 10% off: [Link]”
• Loyalty Status: Acknowledge their tier or points balance. “Hey [Name], you’re just 50 points away from your next reward! Keep it up!”
• Birthday/Anniversary Offers: A classic for a reason. “Happy Birthday, [Name]! 🎂 Enjoy a special $10 gift from us: [Code]”
• Location-Based Offers (if applicable): If you have physical stores, send relevant local promotions.
• Wishlist/Abandoned Cart Reminders: “Hi [Name], still thinking about that [Product Name] in your cart? As a loyalty member, complete your order today and earn double points!”

P.S. Cart abandonment is a significant challenge, with industry averages showing nearly 70% of carts are left behind. TxtCart directly tackles this by using Conversational AI to send personalized, human-like SMS messages that re-engage shoppers in real-time.

It’s not just about reminders; it’s about understanding and overcoming objections through two-way conversation. This approach is highly effective, as seen with JoyRide, which generated over $1 Million in SMS Revenue from abandoned checkout recovery powered by TxtCart.

Timing and Frequency Optimization

Sending the right message is only half the battle; sending it at the right time and with the right frequency is equally important to improve customer loyalty.

• Optimal Send Times: Generally, late morning to early afternoon on weekdays tends to perform well, specifically between 10 AM and 2 PM. This is when people are typically settled into their day but not yet overwhelmed with tasks. However, it’s important to test this timing for your specific audience, as preferences can vary.
• Message Frequency: Don’t overwhelm customers. For customer loyalty programs, 1-4 messages per month is a common range, but it depends on your program’s nature and the value you provide. If you offer daily deals, frequency might be higher, but ensure customers have opted into that level.
• Event-Triggered Messages: Automate messages based on actions (e.g., post-purchase, reward unlocked). These are expected and usually welcomed.
• Monitor Engagement: If open rates or redemption rates drop, you might be sending too many messages or messages that aren’t valuable enough.

The goal is to stay top-of-mind without becoming a bother.

Integration with Other Marketing Channels

Your SMS loyalty program shouldn’t exist in a silo. Integrate it with your other marketing channels for a cohesive customer experience and to maximize reach.

• Email Marketing: Promote your SMS loyalty program to your email list. Use email for more detailed announcements or newsletters, and SMS for time-sensitive alerts and rewards. Ensure your loyalty status and points are visible across channels.
• Social Media: Announce exclusive SMS loyalty perks on your social platforms to drive sign-ups. Share user-generated content from happy loyalty members.
• Website/App: Clearly feature your SMS loyalty program on your website. Allow customers to check their loyalty status and rewards through their online account.
• In-Store Experience (if applicable): Train staff to promote the SMS loyalty program at checkout. Use signage to encourage sign-ups.

Simplify SMS Loyalty and Amplify Results with TxtCart

You’ve just learned how a robust SMS loyalty program can transform your customer relationships and significantly boost your bottom line. The key is consistent, valuable, and personalized communication.

Here’s what to remember as you build or refine your program:

• Consent is King: Always prioritize compliant opt-in practices.
• Value Drives Engagement: Offer rewards and perks that truly resonate with your customers.
• Personalization Pays Off: Tailor messages to make members feel unique and appreciated.
• Track, Analyze, Optimize: Continuously measure performance to refine your strategy.

Ready to put these insights into action and create an SMS loyalty program that not only retains customers but turns them into passionate brand advocates? TxtCart offers the tools and expertise to help you launch, manage, and optimize your text message loyalty initiatives seamlessly.