You are a PM at Shopify. Design a world-class loyalty program.

Certainly, I'll provide a detailed, strategic answer to the product growth problem you've presented. I'll approach this as if I'm directly addressing the interviewer in a first-person perspective, demonstrating deep product thinking, leadership, and growth strategies.

Introduction

You've asked me to design a world-class loyalty program for Shopify. This is an exciting challenge that touches on customer retention, engagement, and revenue growth. I'll outline my approach to creating a loyalty program that not only rewards customers but also drives significant value for Shopify and its merchants. Let me walk you through my thought process and strategy.

Step 1

Clarifying Questions

Before diving into the solution, I'd like to ask a few questions to ensure I fully understand the context and objectives:

• Based on Shopify's business model, I assume this loyalty program would be designed for Shopify merchants to offer to their customers, rather than a program for merchants themselves. Is this correct?

Why it matters: This determines whether we're focusing on B2B or B2C loyalty strategies. Expected answer: Yes, it's for merchants to offer their customers. Impact on approach: We'll need to design a flexible system that can work across various merchant types and sizes.

• Are there any specific growth metrics or timelines we're aiming for with this loyalty program?

Why it matters: Helps set clear objectives and measure success. Expected answer: We're looking to increase customer retention by 20% and average order value by 15% within the first year. Impact on approach: Will focus on strategies that drive repeat purchases and higher transaction values.

• Do we have any data on current customer behavior patterns or loyalty trends across Shopify merchants?

Why it matters: Informs our baseline and helps identify opportunities. Expected answer: We have data showing that customers who make a second purchase are 3x more likely to become long-term customers. Impact on approach: We'll emphasize early engagement and quick second purchase incentives.

• Are there any technical or platform constraints we need to consider when designing this program?

Why it matters: Ensures the solution is feasible within Shopify's current infrastructure. Expected answer: The program needs to integrate seamlessly with Shopify's existing checkout and customer management systems. Impact on approach: We'll focus on solutions that can leverage Shopify's current tech stack and APIs.