Cosmetics and beauty loyalty programs are such a gorgeous fit, don’t you think? That’s because beauty products are a necessity to many, and are usually purchased regularly. But for retailers selling the same beauty products as the competition, customers tend to pick their retailer based on prices or shopping experience. That’s why customer retention and beauty rewards programs are an absolute must in this industry.
“One of the biggest challenges cosmetics and beauty brands are facing is adapting and thriving to a post-pandemic world. Brands have to be agile as consumers are expecting a completely different, more personalised retail experience. Leveraging new wave technologies, making sure that tech and data systems are set up, and understanding consumer needs will be the foundation for success.”
Senior CRM & Insight Manager at Benefit Cosmetics
Table of contents:
Importance of Loyalty
Best Loyalty Program Features to Help Your Cosmetics and Beauty Company Stand Out
What Is a Cosmetics and Beauty Loyalty Program
Cosmetics and beauty loyalty programs are a branch of reward programs, designed to respond to the unique challenges this industry faces. Since this vertical is characterized by high purchase frequency but low basket value, beauty rewards programs are equipped with features that generate long-term engagement, while also encouraging customers to experiment more with high-end products.
“The market is in turbulence and brands that can provide solutions and adopt an ‘every customer is a new customer’ strategy will get the majority of shares. I’d encourage brands to invest in samples and smaller pack sizes, supplemented with below the line offers to get their products into customer’s hands at a price point they can afford, without compromising brand equity.”
Partner at New World Loyalty
Another notable characteristic of such programs is their emphasis on physical gifts. While companies in other industries tend to rely heavily on coupons or discounts as rewards, beauty brands have the freedom to slip a lipstick into a customer’s order as a Surprise & Delight reward, or offer a perfume or hair mask sample as a welcome bonus when reaching a higher tier.
Last but definitely not least, beauty and cosmetic brands have a significant offline presence, so the best beauty loyalty programs in the industry boast various omnichannel capabilities, which boost both in-store and mobile engagement.
“A loyalty program cannot be an afterthought. Companies need to reward their clients for their purchases, but also to show them they understand and care for them. Birthday rewards will get you a long way. Rewarding customer feedback on the quality of your products and services is also important. The data shows that it’s more efficient to reward clients more often with small rewards. Also, consider NOT offering your own products as rewards, as you may undermine your own revenue.”
CEO and Co-founder at the first club
The Biggest Customer Retention Challenges for the Cosmetics and Beauty Industry
Increasing basket value isn’t the only focus of cosmetics and beauty programs, however. Following the COVID-19 outbreak, companies have had to radically shift their customer retention strategy. One lesson that many executives have learned is the importance of personalization — not just in the travel or beauty industries, but everywhere.
Luckily, beauty loyalty programs can aid companies in solving the personalization challenge by collecting additional customer information and incentivizing quizzes and surveys. Doing so empowers brands to increase the relevance of their marketing communication with custom-tailored loyalty emails and on-point product recommendations.
And, again, let’s not forget about offline presence. cosmetics and beauty companies that previously focused on brick-and-mortar have had to make huge strides in digitalization. With a rewards program, they can help customers who are stuck at home embrace the online or mobile shop more easily.
“Working from home, canceled events, compulsory masks, social distancing – this is a hard hit for the beauty industry. The occasions for product use are limited and the shopping experience is different than before Covid-19. One way to overcome this is by strengthening the bond with your customers and building an engaging communication via user-generated content, special customized offers, exclusive product sets, or unique experiences. Show that you, as a brand owner, are acting as a friend.”
CLMP – Digital Loyalty Consultant
Best Loyalty Program Features to Help Your Cosmetics and Beauty Company Stand Out
With the challenges and core capabilities explained, it’s time to take a look at how the most enticing features work for cosmetics and beauty loyalty programs.
Earn & burn, tiers, perks
Loyalty programs can operate in multiple ways, depending on the brand’s goals and KPIs. Traditional point collection systems (also known as earn & burn) are fast to implement, easy-to-use for members, and support customer identification. Tiered systems are ideal for creating a highly-targeted experience, not to mention they can prevent members from switching over to the competition. As for always-available benefits (called perks), they’re easiest to manage and recommend if your goal is to generate a sense of gratitude and brand love.
Early access to products
Giving loyalty program members access to limited or upcoming products is the best reward you can give. Those who are entitled to early access feel valued, while the feature itself generates a sense of VIP feeling, prompting other customers to increase their spend so they can get access, too. That’s why it’s best practice to reserve early access to high-tier members or create an insider group around it.
Sending customers a reward when they least expect it is a surefire way to win their hearts. Birthday gifts are a prime example: gift customers a few loyalty points via email, or sneak a bonus product sample into their latest order if they’ve placed an order during their birthday month. The same can be done to celebrate membership anniversaries, too.
Double/triple point events for special product categories or stores
Offer management is a feature many loyalty program providers offer to make the CRM executives’ and marketers’ lives easier. To put it simply, the system allows brands to set up and manage various campaigns, based on any predetermined criteria.
Emphasize the shared love towards beauty products and makeup, and build upon it with your loyalty program. For example, organize members-only events at specific stores (involving influencers), or design a message board inside the loyalty program’s main hub where customers can exchange tips and advice.
Combining loyalty program rewards and quizzes can help you get more data that helps you understand your customers, but for maximum efficiency, make sure that the quizzes are visually appealing and user-friendly. For example, design the questionnaire in a way that it resembles Tinder, where participants can swipe left or right to declare whether or not they like a product. Or use the visual quiz format to learn more about your customer’s personality and lifestyle.
Dedicated smartphone app
With more and more customers shopping on their phone, a smartphone app featuring your product catalogue and loyalty program provides a major competitive advantage. Developing a mobile solution takes a lot of time and effort, though. The best course of action is to look for a pure-play loyalty provider that has dedicated app design support.
Discover the best app-based engagement strategies from our Webinar with Mito.
Another way to increase mobile engagement is to introduce a Mobile Wallet Solution. Using mobile pass technology, members can have a digital makeup loyalty card to identify themselves in your stores or receive push notifications telling them about your latest offers and loyalty campaigns.
To see how Antavo’s Mobile Wallet Solution works, check out this video.
7 Inspiring Loyalty Programs for Cosmetics and Beauty Brands & Retailers
1. Ulta Beauty – Ultamate Rewards
Ulta Beauty is an American chain of beauty stores. The company’s loyalty program has all the features you would expect from a modern reward system, such as birthday rewards and double & triple point bonuses on certain purchases. They also use point expiration and loyalty tiers in a very smart way to increase engagement.
- Flexibility in rewards: It’s an exciting program, and it’s quite flexible in terms of rewards. Ulta actually lets customers spend their points like money, instead of limiting them to specific rewards. And customers are praising them for it.
- Smart point-expiry: Ulta does have point expiration, which can be frustrating for loyal customers who shop less regularly. However, this is a grand idea for beauty retailers, because putting an expiration date on points motivates shoppers by giving them an extra incentive to spend their points.
- Sense of urgency: FOMO is never a bad thing when it comes to loyalty programs. Just make sure you’re giving customers a reasonable amount of time to use their points. Take into consideration how often customers purchase your products on average.
- Loyalty tiers: Another highlight in Ulta’s program is their straightforward loyalty tiers. When customers reach the Platinum tier, they are eligible for a point multiplier. In other words, they receive more points for the same level of spend. Plus, at this level, point expiration no longer applies.
- Available in their mobile app: Last but certainly not least, Ulta has made its mobile app part of the fun. Members can use the app to check their point balance on the go or use voice search to find the best products, hands free!
2. Debenhams – Beauty Club
Debenhams has something really nice going on. Its Beauty Club loyalty program is easy to understand and the visual explanations make it even more simple. 3 points to every £1 spent. Period. It’s great and makes calculations easy for the deal-seekers out there. The company also incorporated personalization and bonus points events to keep things interesting.
- Using points as a currency: Debenhams is also giving reward money with purchases, which – just like Ulta – means customers can use their rewards as a payment option when checking out. Once again, this kind of freedom ensures that customers will get the rewards they choose.
- Providing Surprise experience: Debenhams has actually partnered up with a super-well-known beauty brand, Benefit, to deliver a free brow wax on customer birthdays! Now members have one more thing to celebrate when they receive their birthday reward!
- Free shipping for life: Customers love free shipping, so it makes for a great reward for loyal customers. But Debenhams has taken it to the next level by offering free shipping on online orders for life, by simply entering a code sent in the monthly statement.
- Bonus points: The brand runs in-store and online events where customers can double or triple their points on their makeup loyalty cards, and get to their rewards faster. This is so perfect for omnichannel retailers who really want to amp up curiosity and participation.
3. Lancôme – Elite Rewards
Lancôme is offering something unique with its Elite Rewards loyalty program: rewarding customers for spend… and way more. Incentivizing non-purchase activities and offering a variety of rewards is a surefire way to please all the different customer groups you have.
- Rewarding all forms of interactions: When it comes to earning points, Lancôme membership comes with a massive wall of activities to choose from. For example, you can watch the latest skincare video or write a product review. This is important because engaging customers outside the buying cycle is the go-to way to making modern customers happy.
- Exciting incentives: In addition to the ways Lancôme lets customers earn points, it has a massive selection of rewards to choose from. Therefore everyone can get their hands on fun rewards, like cool desktop backgrounds and Facebook cover photos.
- Appreciating brand advocacy: The combination of rewarding many different activities and forms of engagement, along with a huge variety of rewards, is a great way to ensure brand advocates in all budget categories feel appreciated.
- Experiential rewards: For upper-class spenders, Lancôme offers a set of exclusive experiential rewards in the form of beauty consultations with their makeup artists. The company even offers a cool set of partner rewards, such as Uber credits, spa gift cards and donations to charity.
- Community building: One final highlight of Lancôme’s loyalty program is that there’s an activity feed where users can see what people are doing in the program as a form of building a sense of trust and community.
4. Sephora – Beauty Insider
Mega beauty retailer Sephora’s Beauty Insider program is a benchmark on how to build a next-gen loyalty program with exciting features. From early access to birthday rewards and tiers, it demonstrates that modern loyalty programs should go beyond simply earn & burn logic.
- Incremental tier benefits: Beauty Insider has three different levels of loyalty membership. The first level really doesn’t offer much, but that’s why it’s so motivating to spend your first $350 to get to the VIB (Very Important Beauty Insider) level.
- Exclusive rewards: Another noteworthy feature is the Reward Bazaar. Just like the name implies, it’s a treasure trove of gifts and services that are only available for high-ranking members. So if you managed to reach the VIP or Rouge rank, then you are now able to redeem points for full-size products or trial samples.
- VIP benefits: Speaking of exclusivity, members who are in the illustrious Rouge tier are entitled to premium perks, such as free shipping or a first dib on upcoming products, currently unavailable for the wider public.
5. Dr. Brandt – Brandt Loyalty
Let’s jump to a specific area of beauty – skincare products. An online store selling a single brand in one particular product category, like Dr. Brandt Skincare, can definitely benefit from tying loyalty and social media together to reach audiences everywhere.
- Promotional days: In an environment where companies are encouraging shoppers to try new things, it’s particularly important for brands to experiment with point redemption. Dr. Brandt, for example, offers double points during promotional events.
- No point expiration: An expiration day is a good motivator, but it can mean trouble as well. You need to constantly keep track of it, as well as communicate the deadlines to customers. If the collected currency disappears without notice, it’s convenient for everyone.
- Motivate social media activity: Just like Lancôme Elite Rewards, Brandt Loyalty rewards advocacy and engagement by offering points for referring a friend, leaving a review or signing up for the newsletter. Doing so ensures that the customer action spills over onto their social media channels.
6. BlueMercury – BlueRewards
BlueMercury is an American luxury retailer of beauty and cosmetic goods, including La Mer, Oribe, and Jo Malone. The company is unique in the sense that they have a similar in-store presence as other competitors but offer more exclusive and high-end brands, coupled with a memorable customer experience through its loyalty program.
- Widely accessible: Membership for cosmetics and beauty loyalty programs like BlueRewards can be approached two ways: either make the program free to join, or charge a recurring subscription fee. For companies that serve customers with a high purchase frequency and low basket value, a subscription fee can work very well.
- Reward members for staying loyal: BlueMercury highlights the difference between rewarding customers for a purchase and rewarding them for staying with the brand. To reward loyalty for the long run, the company offers high-tier members a special annual gift package.
- In-store surprise: The company puts a lot of emphasis on in-store engagement via its events. For example, customers can go to its stores for a one-on-one consultation session with one of their brand partners to receive customized, expert beauty advice, or visit the place on their birthday for a special reward.
7. Birchbox – Loyalty Program
Based in NYC, Birchbox is an online monthly subscription service for makeup and other beauty products. Customers just sign up and fill out a profile to customize their box. Subscribers receive 4-5 samples each month from new and well-known brands, and can purchase full sizes of their favorites. Naturally, this unique business model calls for a unique cosmetics and beauty loyalty program.
- Using standard rewards as an appetizer: Birchbox offers a standard membership that’s activated automatically for everyone. On this level spending $1 earns 1 point, and customers enjoy free standard shipping on orders $50+ or free two-day shipping on orders $150+.
- Tier level, but with a twist: Birchbox has another level, called Ace, for customers who reach $300 annual spend. For a $10 monthly subscription fee, they receive access to free standard shipping on all orders, early access to new product samples, promotions and events.
- VIP customer service as a benefit: One noteworthy perk of being a Ace-level member is the priority customer service. Receiving adequate support is a must for every service. But VIP support? Now that’s a benefit we’d all love to have.
Be Your Own Kind of Beautiful With a Loyalty Program
There’s a certain thrill when it comes to designing a new program for your brand. It’s a great time to really hone in on what your brand stands for. What are the most important KPIs? Which loyalty program features would your audience love the most? (And if that answer isn’t clear, it’s a great opportunity to ask!)
Hopefully this guide has provided the right insight to help you get started. If you’d like to learn more about loyalty programs and how to implement one, our definitive guide is a worthwhile read. And of course, our team of experts is here for you whenever you’d like to introduce or revamp your own program.
Zsuzsa is CCO and Co-founder of Antavo, listed by Forbes as one of Europe’s top 100 female founders in tech. After acting as Antavo’s CMO for nearly a decade, she took over the role to help the company’s clients. She is also a former journalist and has been awarded by the European Commission.