Ulta Beauty uses Growth Marketing initiatives to expand Loyalty Program
Ulta's loyalty program was launched back in 2014 and has since amassed an impressive
42.2 million active members over the past decade, as reported by the company.
Kelly Mahoney,
Senior Vice President of Customer and Growth Marketing at Ulta, emphasized that the enhancements made to Ulta Beauty Rewards go beyond just a name change. They have been tailored to cater to the desires of their most loyal customers, demonstrating the brand's appreciation for them. She expressed excitement for both new and existing members to explore the revamped program.
The existing benefits of the loyalty program include earning points with every purchase, additional perks for platinum or diamond status members, accelerated earnings with the Ulta Beauty Rewards Credit Card, and the ability to redeem points for beauty products and salon services.
Mahoney highlighted that while some loyalty programs are scaling back,
Ulta Beauty Rewards remains committed to delivering outstanding benefits and an improved birthday experience to its members. The program continuously evolves to meet the ever-changing needs of beauty enthusiasts, aiming to capture the hearts and minds of the beauty community.
Ulta's recent performance also speaks to its success, with
Q3 net sales rising by 6.4% to reach $2.5 billion. Comparable store sales showed significant growth of 4.5%, building upon the impressive 15% growth from the previous year, while net income increased by 10% to $249 million.
CEO Dave Kimbell has underscored the significance of Ulta's loyalty program, describing it as a crucial element of their business and overall success during recent earnings calls. The program's strong performance is attributed to both retaining existing members and attracting new ones, with healthy spending per member driven by increased shopper frequency.
Furthermore, Ulta is expanding its product and brand offerings, with skin care brand OleHenriksen set to launch in 700 select Ulta stores and online in January. This expansion includes a range of OleHenriksen's best-sellers, along with new product launches and exclusive items scheduled for release throughout the upcoming year.
Source:
Marketing Dive
Loyalty Program Benefits
A well-designed loyalty program can offer several significant benefits to a business:
- Customer Retention: Loyalty programs encourage repeat business by rewarding customers for their continued patronage. This helps retain existing customers and reduces customer churn, ultimately increasing long-term revenue.
- Increased Customer Spend: Loyalty program members often spend more on average than non-members because they are motivated to reach certain thresholds or earn rewards. They might choose to buy more frequently or buy higher-value products/services to accumulate more points.
- Data Collection and Analysis: Loyalty programs provide valuable customer data that businesses can analyze to gain insights into customer behavior, preferences, and trends. This data can inform marketing strategies, product development, and customer segmentation.
- Personalization: With access to customer data, businesses can personalize marketing messages, offers, and recommendations. Personalization improves the customer experience and can lead to higher conversion rates.
- Brand Loyalty: Loyalty programs create a sense of attachment and affinity to the brand. Customers who feel valued and rewarded are more likely to become brand advocates, recommending the business to friends and family.
- Competitive Advantage:
A well-executed loyalty program can differentiate a business from its competitors. Customers may choose to shop with a particular brand due to the enticing rewards and benefits offered.
- Enhanced Customer Engagement:
Loyalty programs foster ongoing engagement with customers through email marketing, app notifications, and other communication channels. Engaged customers are more likely to provide feedback and participate in surveys, helping businesses improve their offerings.
- Improved Marketing ROI:
Targeted marketing efforts directed at loyalty program members tend to yield a higher return on investment (ROI) compared to broad, non-targeted campaigns.
- Cross-Selling and Upselling Opportunities:
Loyalty programs can be used to introduce customers to new products or services within the same brand, increasing the chances of cross-selling and upselling.
- Feedback and Customer Insights:
Loyalty programs often include mechanisms for gathering feedback and reviews from customers. This feedback can be invaluable for refining products and services and addressing customer concerns.
- Competitive Differentiation: A well-structured and rewarding loyalty program can set a business apart from its competitors, attracting customers who are looking for added value and incentives.
- Customer Advocacy: Loyal customers who have positive experiences with a business are more likely to become brand advocates. They may actively promote the brand, refer new customers, and defend it in case of criticism.
Overall, a loyalty program can contribute to increased customer loyalty, higher revenue, and a deeper understanding of customer behavior, which can drive sustainable business growth and success.
If you're interesting in implementing or revitalizing your company's loyalty program, speak with a
marketing consultant
that has years of focus on growth marketing.
Your Fractional CMO,
Emilia Andrews
