Finding success in the beauty and cosmetics industry: Five loyalty strategies to get ahead

While the global beauty market is in a state of rapid growth (the global market is expected to reach $863 billion by 2024) the industry is undergoing some seismic shifts.

The market is saturated and brands have to find new ways to make a statement, with influencer marketing playing a key role in most success stories. It’s always felt like a grey area in relation to ROI, but a 2017 study showed that for every £1 spent on influencer marketing, there was an average return of £8.81.

Furthermore, shoppers are turning their loyalty away from own-brand ecommerce stores and are instead purchasing from big-name brands like Amazon for their beauty needs. The increased interest in organic and environmentally-friendly products also means the ethical niche is booming.

To stand out, beauty and cosmetics brands must find new ways to appeal to customers. A great starting place is to utilise a loyalty program to engage existing customers, curate a unique customer experience and, ultimately, come out on top in a crowded marketplace.

In this blog post, we lay out five loyalty strategies you should implement today to get you jumpstarted on the road to differentiation. They are:

  1. Make them feel special
  2. Make it personal
  3. Build trust with user-generated content
  4. Communicate your vision
  5. Create a community

Strategy 1: Make them feel special

Who doesn’t love to be treated with unexpected gifts? Use your loyalty program to create a VIP shopping experience for your most loyal customers.

Show them how grateful you are for their custom by segmenting them into a top tier on your loyalty program that rewards them with points and perks the more they engage and spend.

Creating a tiered system allows customers to move up the tiers, unlocking access to more and more goodies such as free samples, exclusive events, tips and tricks and birthday gifts. The shopper feels well rewarded for their custom and is more inclined to continue their relationship with you, improving their customer lifetime value and average order value.

For example, 100% Pure run a tier based system where the higher the engagement, the more exclusive, experiential and personalised the rewards. For instance, members belonging to the highest tier, “Pure Revolutionist” get early access to new product launches and free upgraded shipping on all orders.

100% Pure Tiers

Strategy 2: Make it personal

According to Janrain, 74% of people hate being shown irrelevant content and 48% of consumers spend more when their experience is personalised. Neglecting the chance to personalise your customers’ shopping experience is a missed opportunity to showcase products they’d actually be interested in buying.

Beauty is a very personal thing,” says Finding Ferdinand Founder, Nhu Le. “People don’t want to be told. They want to choose what looks good.”

While some brands are going the whole nine yards and giving customers the opportunity to create their own one-of-a-kind lipstick, starting with personalisation basics is a good place to begin.

A loyalty program allows you to collect important data on your customers such as the pages they have visited most on your site, the items they have added to basket and time spent on each page. All of this data forms an overall picture of their interests and preferences.

Use this data to tailor product recommendations as a way of cross-promoting and upselling more items. This can be done via personalised homepages, targeted social media advertising and loyalty emails. All of these personalised and highly relevant interactions increase the chance of purchase.

Go a step further and personalise the experience for your customers every time they log into your site. Brand your loyalty page with their name, a reel of their previous purchases and complementary products.Beauty Bakerie 2

Strategy 3: Build trust with user-generated content

Instagram and Facebook are just a few swipes away as we wait for the bus, make a cup of tea or wait for a friend in a restaurant. It’s not surprising that influencer marketing is now a key part of any brand’s strategy, but especially in the beauty industry.

It’s important for brand endorsements to come off as genuine and authentic. If the relationship between influencer and brand appears fake or paid-for, the effectiveness of the collaboration is considerably weakened as savvy social media users easily spot a paid-for ad that feels half-hearted.

Make sure the user-generated content (UGC) you collect and share is natural and authentic to build a connection with your audience. 84% of customers trust online reviews as much as personal recommendations. Use your loyalty program to reward your existing customers for sharing their real-life experiences with your brand on social media to build trust.

You could also reward customers for sharing experiences with your products on social media. These images are more influential than brand campaign photos as they are shot by your customers. They act as social proof, showcasing how your products look and work on real people, not on models and influencers with hair and make-up teams behind the scenes.

Velour Lashes, for example, shares images of their customers wearing their products on their social channels. This builds up trust for new customers as they can see their lashes being modelled by real-world customers.

Velour Lashes Social Image

Strategy 4: Communicate your vision

Research shows that 65% of customers buy on the basis of their beliefs. Many brands in the beauty industry will shout loud and clear if their product has a particular USP such as being organic, vegan or a certain percentage of profits being donated to a social cause.

In the pursuit of authenticity and transparency, beauty shoppers want to weigh their decisions on what the brand gives back in relation to environmental policies, animal welfare and human rights.

Using a loyalty program to communicate this vision is a critical part of showing your consumers what you stand for. Aligned customers will feel part of your brand world and able to connect with others who share their worldview. Design your loyalty program to really communicate what values lie at the heart of your business.

Ren Clean Skin Care use their loyalty program to communicate that their products are chemical-free. They have cleverly named their loyalty currency “Clean Credits” and their program “Clean Collective Rewards” to demonstrate this USP.

Ren Clean Skin Care Loyalty Program

Strategy 5: Create a community

The beauty industry is extraordinarily social with a strong sense of community. Beauty shoppers want to connect and share knowledge, tips, tricks and recommendations with each other.

If your customers are craving connection, give it to them! Use your loyalty program to create a community around your brand of like-minded beauty lovers. Make yourself a go-to destination for your customers to share knowledge and inspiration. Kat Von D is a great example of a brand that has leveraged this knowledge sharing on site by curating a page called the “Artistry Collective” which houses hundreds of video tutorials.

Brand your loyalty program in a way that resonates with your community – choose colour palettes, fonts and images that clearly convey your business values and speak to your ideal customers.

Annmarie Skin Care places high importance on the value of giving back to the world. They encourage a sense of community by offering exclusive perks to loyalty members including a private Facebook group as well as education resources where customers can share knowledge. Wildandbeautifulcollective (2) Copy

Now you have the tools, go out and foster loyalty

With worldwide revenue from beauty ecommerce expected to rise to $863 billion by 2024, it’s a thriving industry, there are plenty of opportunities for beauty merchants to make the most of.

From finding the right influencers to promote your brand to compete with the boom in organic, natural products, it might seem intimidating and hard to get ahead. But if you build strong, long-lasting relationships with your customers through utilising a loyalty program, you can be a leader in the beauty and cosmetics industry.

Want to become the go-to loyalty expert in the beauty and cosmetics industry? Visit the LoyaltyLion Academy where you can find everything you need to know about customer loyalty and retention.