Do Loyalty Programs work for Beauty and Cosmetic brands?

June 6, 2023
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Loyalty programs are marketing strategies designed to target customer engagement, retention and the lifetime value. They are gaining traction due to rising costs of acquiring new customers and the improvement they make on the user's experience. These programs center around rewards and customer shopping history, making it advantageous for customers to continue shopping at your store. Although the quantity of rewards and their values play a major role, the best loyalty programs align with a brand's image and support their cause as well.

Beauty and cosmetics stand to benefit greatly from loyalty programs since these programs promote long-term usage and loyalty is especially important for these industries. Due to the broad competition, it becomes important to find and retain your target niche. Loyalty programs are designed specifically for this purpose and are therefore a strong addition to your brand. Due to the large untapped potential of e-commerce and its unique challenges, it becomes increasingly important for us to concentrate on long-term relationships.

What makes a successful loyalty program?

1. Identifying your core demographic: A top priority for any successful loyalty program is finding the demographic that fits your brand. Your loyalty program will work most effectively and your rewards will be most persuasive when you have found your dedicated customer base. In order to do that, we need to understand our customers and align our loyalty program and brand with those values.

2. Brainstorm some creative ideas: Loyalty programs have a habit of being overly reliant on apps and software solutions. These programs can sometimes lack luster and that’s why we encourage that you take a more creative approach to your loyalty program. The real goal is to think of a way that your loyalty program supports your brand to give you that extra bit of engagement without having to increase reward values.

3. Balancing reward values: Reward values are a whole world on their own, they have the power to create demand and to support your goals. By altering the value of your rewards you can increase demand and to drive the interactions that you want like more followers or more subscriptions. Thinking of rewards as fixed components fails to utilize their true value. In all things, taking a varied approach gives you a baseline on what rewards work best, which rewards to focus on and how much to reward.

Suggested Reading: Complete Guide to Loyalty Programs

How do loyalty programs work in the beauty and cosmetics sector?

In the beauty and cosmetics sector, every brand must first consider how they intend to capture registrations. It’s possible to leverage brand identity, but loyalty programs also have the ability to reward points for simple sign-ups. Loyalty programs such as Growave, allow you to design your own custom set of rewards for a wide variety of actions; allowing customers to decide how they intend to spend their accumulated points. Along with points for dollars spent, it’s also common to set-up tiers that allow more dedicated customers to benefit from their history with your brand. 

Keep in mind that how your loyalty program interacts on page and how you display your rewards is another important consideration. Above all else, it must be clear why your loyalty program is the preferred option. This is exactly when the previous recommendations play an influential part.

Overall, loyalty programs are an effective way for beauty and cosmetics brands to incentivize repeat purchases and to identify their dedicated customer base. At their core, loyalty programs are tools that you can use to leverage your marketing spending. They are deeply strategic and subject to your brand, industry and goals.

Suggested Reading: How can Growave help you setup your loyalty program?

Benefits of loyalty programs for customers

1. Tailored product recommendations: Keeping track of a customer's history at your store means an improvement into their behavior and preferences. By leveraging email notifications in combination with your loyalty data, you can tailor your recommendations, which in turn can improve the customers experience at your store. Generating interactions is a real problem, but with the help of impactful rewards you can drive those interactions and learn from them. Remember to keep an open ear as your loyalty program matures, this could help you find key factors to implement.

2. Freedom of choice: Customers adore the option to choose their own rewards, and that’s something that loyalty programs afford you. Due to the broad variety of options available, you have full control over the type of rewards and the value of those rewards you offer. These options include discounts, gift products, free shipping, exclusive access to catalogs, early access, tier promotions and more.

3. Exclusive access: A major focal point for many successful brands is the ability to cultivate the perception of exclusivity. By leveraging this intersection between quality and the creativity of your loyalty program, shoppers can feel like they have an elevated status by using your products. We know exclusivity to be a real difference maker that is only further amplified by social advocacy.

4. Trust and benefits: One of the pillars of e-commerce is inevitably trust. One of the more obvious advantages of loyalty programs is that members have already shopped at your store and know what to expect. This effectively means that the whole issue of converting a first time shopper and the associated pressure is lifted. This coupled with the constant availability of rewards makes their decision much simpler.

5. Community and advocacy: It is perfectly possible to create a community of dedicated loyalty members and in turn those shoppers into your own advocates. This can be achieved by leveraging UGC and focusing on scaling your social media platform. Consider taking up a social cause such as sustainability, which can help you make an appeal and attract like minded thinkers. Another option is to try and attract reviews with rewards and featuring customer content on your platform, sort of like promoting your favorite shoppers.

Advantageous of loyalty programs for brands

Beauty and cosmetics are highly competitive industries and brands are constantly looking for their competitive advantages. Let's take a look at what the possible benefits of loyalty programs are.

1. Increased customer retention and lifetime value: One of the main motivations for loyalty programs has to be their effect to retain customers with cumulative points and their ability to increase lifetime value of members. In addition to the mentioned, we also see a reasonable improvement to the average order value because of the value of the rewards. Satisfied customers that see real benefit from your loyalty programs are also more likely to recommend your brand to their friends and family. We have seen brands implement double referral rewards to increase the likelihood of these referrals. Loyal members are especially valuable for beauty and cosmetics brands. It is perfectly likely that a satisfied customer will take advantage of your rewards and turn into life time shoppers. 

2. Enhanced customer data and insights: The value of the information that loyalty customers provide is valuable. These members are also more responsive and happen to be more open to leaving reviews. Apart from the constructive nature of these shoppers, they also provide refined hard data that can be used to refine catalogs. This information can be leveraged in your other channels and marketing strategies. There are multiple layers of benefit that these insights can produce.

3. Opportunities for upselling and cross-selling: Due to the openness of dedicated customers, they are also open to product recommendations. Using this foothold you can test new products or recommend your best performing items for what can be your best converting channels. These new opportunities can make a major difference which can prove to be especially helpful for smaller businesses.

4. Competitive advantage: Customers have often used terms such as transactional experiences to describe their shopping experience. This difference is most compelling when we consider the difference between brands with and without loyalty rewards. If these brands offer similar products, the proposal of rewards can make a dramatic difference. Loyalty programs are relationship based and record a customer's support. We can therefore say that loyalty programs are a way of showing gratitude, while also adding a new dimension to e-commerce.

Overall, there are countless advantages that loyalty programs provide brands that extend beyond the obvious financial value. They build bridges that last and cultivate a relationship that can prove to be mutually beneficial. Apart from the intrinsic benefits, brands also make us more competitive across similar competitors.

Examples of successful loyalty programs in beauty and cosmetics

Innovation is common in these industries and with all the rush to keep up, we may miss a beat, but thats ok! Loyalty programs are strong approach towards retaining customers and these three unique examples are a great starting point to your own loyalty program.

Sephora’s Beauty Insider Program

Sephora’s Beauty Insider program is an awesome example and one of the more successful loyalty programs in the beauty and cosmetics industry. Sephora offers three unique levels of rewards that depend on your yearly spending, and each tier is designed to grow more and more desirable. This program is completely free to join and even offers a big discount on your first purchase. The way the program is structured, you can tell that it was meant to reward loyal customers and not to solely drive revenue. They further divide their rewards into savings, where members can earn discounts and point multipliers. Samples, where they can test new products at the courtesy of Sephora on special occasions. And experiences, where shoppers can access special events and features unavailable to standard shoppers. The beauty insider program offers much more than your average program, there is so much benefit that it's almost difficult to say no. If you're trying to build an irresistible loyalty program that you have the blueprint through Sephora.

Sephora's loyalty rewards

La Roche-Posay Preferred Rewards

La Roche-Posay is a stand out for its ease and simplicity more than anything else. If we compare this program to the Beauty Insider program we can see a vivid contrast that demonstrates how simplicity can also be effective in persuading loyalty. Rather than implementing a complex and feature loaded program, they opted for the simple to use option. The program starts with one-click sign up and immediately unlocks a set of free rewards just for registration. Although they only offer two tiers, it's very easy to access the second tier. We can see a trend beginning to form that focuses on forming a connection and showing gratitude. 

 

La-Roche Posay Loyalty Rewards

MAC Lover Rewards

MAC Lover is brimming with charm and youthful energy. You can instantly tell that there is a sense of creativity at play and we can wholly agree that it works. Their program is divided into three parts, but being part of the lowest level is enough to make it interesting. MAC checks all the boxes; they let you choose how to spend your rewards, they leverage creativity, and their benefits are highly desirable. We noticed how they ask their loyal customers to leave a review for a pleasant reward, something we thought was clever because they know that loyalty members are leaning towards positive reviews. The best part has to be how they create exclusivity by offering access to special events and priority delivery for more committed members. All in all, Mac Lover is a well constructed and stylish program that makes a difference.

MAC Lover Loyalty Rewards

Overall, we’ve learned from these programs that gratitude is the most important consideration. As much as the loyalty program is driven by the benefits, they should focus on being sincere and showing gratitude to loyal customers. By thinking of loyalty programs as ways of driving customer retention is proven wrong by these examples. 

Suggested Reading: More Example of Loyalty Programs

Conclusion

We have seen that some of the most popular brands in the world are implementing their own loyalty programs. We looked at the benefits for the customer and for the brands. We saw how they used these programs to meet their goals. But most importantly we saw that the most important thing to remember about loyalty programs is that they are about showing that you're grateful.

Growave is an all-in-one marketing app thats dedicated for Shopify stores. With Growave you can set up your own loyalty program in a matter of minutes and take full advantage of its powerful features. You get more than just a loyalty programs. You can Book a Demo or Start a Free Trail today!

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