Brands in the beauty industry are proving they’re more than just a pretty face when it comes to creating and retaining loyal customers — and they’ve got the numbers to prove it, especially stateside.
According to Statista, the United States was considered the most valuable beauty and personal care market in the world in 2017, with $86.1 billion in revenue. China came in second with $53.5 billion.
There’s no lack of brands in this industry, making it imperative for companies to keep their customers happy — lest they make an about-face. And if that happens, their revenues will feel it. To get a chunk of that money, beauty brands are stepping up their game to keep customers coming back for more. Here are five examples of what these companies are doing.
“Worth It” Rewards
The largest cosmetics and beauty company in the world, L’Oréal, launched its reward program last year. Worth It Rewards allows customers to earn five points for every $1 spent and then use those points toward rewards — in addition to other benefits like birthday gifts, product launch sampling, and coupons.
That’s pretty standard when it comes to a reward program, but what makes it stand out is that customers can also donate their points toward the company’s charity, Women of Worth. The program honors women who volunteer and serve in their communities, and customers can read more about the nominees to further build a connection with them and the brand.
So not only will L’Oréal’s customers look good when using their products, but they can also feel good about where their money is going. And that’s a big deal, considering that 84 percent of consumers globally say they seek out responsible products — and 90% say they expect companies to operate responsibly to address environmental and social issues. Associating with a worthy cause is good for business and the overall perception of the brand.
Ulta knows a thing or two about creating an attractive loyalty program, considering theirs has 27.8 million members– and that those members drive more than 90 percent of their sales. So how do they retain their base of loyal shoppers? Ulta understands that customers expect an experience from the beauty industry, and that’s just what they create.
Beyond what they offer in their retail locations, Ulta also has a Glam Lab in its app that allows users to try on thousands of makeup products when they upload a selfie (or use a model’s photo). Once the user picks their favorite items — like mascara, lipstick, eyeshadow and eyeliner — they can add them to their cart and check out.
Ulta gives customers an interactive purchasing experience, all without them having to come to the store. But their retention efforts don’t stop there. They also provide two-day shipping for 95% of their customers through Google Express, covering the need modern consumers have for immediacy.
Sephora’s Beauty Insider rewards program must be doing something right, considering it has more than 10 million members. A Smile.io case study looked at what makes this program successful, and one of the key standout features is their use of three tiers: Insider (free), VIB ($350 spent per calendar year) and Rouge ($1,000 spent in a year).
The company’s tier approach works because they make their top tier an elite group, creating a sense of status for those who reach it. Rouge members are also able to earn exclusive rewards, like special products and free two-day shipping.
As the case study points out, Sephora has created a luxurious brand persona, and their rewards program matches that. Members don’t earn discounts with their points: They earn products. It’s those details that show they know their customers.
But not all beauty brands use loyalty programs to retain customers.
Maybelline New York (Owned by L’Oréal) leads the way when it comes to social media interactions. They had more than 59 million likes on Instagram from the start of 2017 through Oct. 20, 2017. Compare that to L’Oréal’s 27 million likes and Estee Lauder’s 5 million likes during that same period, and you’ll understand just how impressive those numbers are.
Maybelline’s social pages feature influencers, celebs, and of course, their products. They also give their followers a chance to be featured if they use their hashtag, which has more than 100,000 posts. And while they don’t offer a rewards program, they do dispatch a newsletter that keeps customers in the know and gives them special deals. It’s clear they’ve put a good bit of resources into their digital marketing strategy and engaging their audience.
But do those social numbers correlate to what consumers think of the brand? In a word, yes. According to a Statista survey, 74% of its respondents said they viewed Maybelline favorably. With so many beauty brands competing for consumers’ attention, earning their favor might just point them in Maybelline’s direction and persuade them them stay with the brand.
With brands in every industry vying for millennials’ business, CoverGirl wins the prize for most impressive brand loyalty among that coveted group. The brand also earns the top loyalty standard among Generation X and Baby Boomers. In addition, about half of the company’s customers have used their products for five years or more — which says a lot considering 80 percent of women have switched beauty brands within the past year alone.
The brand has partnerships with “America’s Next Top Model,” Miss USA, and Miss Universe, keeping their products in the spotlight for their target audience. CoverGirl also moved a new tagline, “I am what I make up,” to the front of all of its campaigns to create an empowering message, acknowledging their audience’s tendency to use makeup as a form of self-expression.
Beauty Industry Makeover
The beauty industry is tasked with creating an experience for consumers, no matter where they sell their products or whether they offer a loyalty program. How they do that will determine how successful they are with their retention efforts and how much of this billion-dollar industry they claim.