Scale success story: Sephora’s Beauty Insider

Beauty Insider – cosmetic brand Sephora’s loyalty program – is among the most talked-about loyalty programs in retail. Offering members access to promotions, extra perks via store credit cards, exclusive promotions and discounts. It’s been giving back to its community in a big way since 2007.   

Allegra Stanley, Sephora’s vice president and general manager of loyalty says

“The way we think about loyalty is that our clients are the core of everything we do. We are driven by what our customers love and want more of. So it’s not about what their loyalty demonstrates to us, but what we can deliver to our clients that creates the most meaningful and connected experience with our brands.” 

Source
Starbucks

The evolution of the Sephora loyalty program

Here’s a quick recap of the progression of its infamous loyalty program: 

It was first launched in 2007 and was an innovative example of a loyalty program at that time. This is because it gave customers access to luxury products they wouldn’t have been aware of. 

In 2009, the program was extended to include a higher tier called “Very Important Beauty Insider”. This was exclusive for the most highly engaged members who spent more than $350 a year. Then, in 2013 a third-tier called “Rouge” was added for customers who spent $1,000 or more per year. This tier gave first access to new products, limited edition products and invitations to special events. 

Not content to sit on their laurels, Sephora added an exclusive Rewards Bazaar in 2016. This became an exchange platform where members could redeem points for a range of curated products. 2017 saw a more emotional shift away from purely transactional behavior with the introduction of the Beauty Insider Community. 

“As we learned more about our clients, we saw the opportunity for beauty lovers to come together, ask questions, post inspirational beauty looks and get product recommendations, not just from us but for them to share with each other,”

Allegra Stanley, Sephora’s Vice President and General Manager of Loyalty

This year, Sephora continues to evolve the Beauty Insider program. This includes a Brow House Call with Jared Bailey – the brand’s resident brow expert – and a Francis Ford Coppola Winery tour for two with a special bundle of Sephora products.

Bringing to life personal and emotional experiences is what drives the most recent update to the Sephora loyalty program.

How does the Sephora loyalty program work and why is it a success?

Across the retail loyalty landscape, many programs are focused only on transactional loyalty where points equal prizes and discounts are rife. For Sephora, the loyalty program’s success correlates more closely to community and emotional-drivers. 

Research has found that almost 75% of what drives customer engagement and loyalty are emotional perks. Now more than ever customers decide to engage with brands based on emotional loyalty drivers.

One method of acting on an emotional driver is to provide birthday perks through a loyalty program. Sephora surprises members across all tiers with birthday gifts, tapping into that personal element. These gifts include mini-sets from coveted brands such as Kat Von D and Drunk Elephant. These added loyalty perks give shoppers an incentive to join the loyalty program.

The Sephora loyalty program benefits from personalized program perks. Current and future VIB and Rouge members can personalize their perk options. Members can pick one of three benefits for the year, such as extra points, sharing makeover experiences with a friend or quick shipping.

By allowing members to choose their perks, they’re ensuring that their loyalty program is adaptable to each member’s needs. This level of personalization empowers customers to take control of their loyalty program to make it something that gives them personal benefits.

The Sephora loyalty program boasts 17 million members in North America alone. These members are responsible for 80% of the company’s sales. Through their loyalty program, they bring customers to the Sephora website even when they aren’t shopping. Improved engagement leads to a 22% increase in cross-sell and a 13-51% increase in upsell revenue. Not only does this brand engagement encourage people to spend more, it also increases customer loyalty.

How to scale your ecommerce business like Sephora

Build a community around your brand 

47% of customers become loyal to a brand if it has a brand community of like-minded individuals. To build a brand community, first, you need to define your brand values and customize your loyalty program accordingly.

No matter who you are, using personalization and your loyalty program together is a recipe for success. Use data from your loyalty program to learn about the kinds of perks and rewards your customers engage with most. Cupshe displays personalized information for their members on their loyalty program page when they sign in. They also encourage visitors to refer the brand to their friends, making sure they acquire more customers who fit into their growing community. Find out more about Cupshe’s success by checking out the case study.

You can then send personalized loyalty emails to attract shoppers back to your store. These could show related products to previous purchases, and the points they would rack up if they buy them. They could also communicate your customers’ existing point balance, and the benefits they’re missing out on by not spending them.

Make it exclusive

Take a page out of Sephora’s success and use your program to gift members exclusive experiences.

Bikini brand, Cupshe, gives their most loyal customers access to VIP member events and discounts not available to guest shoppers. Providing experiences like this will create a buzz around your brand. Your attendees will be excited to share the event with friends and family. This way, your loyal customers naturally become your brand advocates as they’re sharing their positive experiences with your store.

A tiered approach 

Sephora’s loyalty program also makes clever use of tiers. By having different levels of membership, with unique perks tied to each, members have something to aspire to. To reach the higher tiers, members spend more to get the exclusive rewards – a win-win situation for both Sephora and their VIPs.

From 2019, Sephora gave members at higher tiers more choices for their birthday surprise – either a rotating gift that changes monthly or an extra 250 points. This perk gives customers another reason to aspire to move up to the next tier. They’ll then be more likely to increase their basket size and spend more regularly to meet the criteria.

Learn from Sephora and try implementing a tiered based system in your loyalty program. Cupshe correlates exclusive rewards with each tier that are not accessible at lower levels (such as priority customer service). And, just like Sephora’s VIP shoppers, your customers will want to move up tiers when they see there are extra benefits they’ll unlock.

Conclusion

Sephora is one of the best examples of customer loyalty, with a customer-centric approach at the heart of its strategy. Sephora is excellent at providing rewards and incentives that people want, and an easy way to achieve them.

Implementing a tiered loyalty program and building a community will help you to scale and achieve long-term growth. 

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About the author

Mollie Woolnough-Rai

Mollie is a Senior Content Marketing Executive at LoyaltyLion. After graduating from UCL in 2016, she has worked both in-house and at marketing agencies providing expertise in content for both B2B and B2C clients. At LoyaltyLion, Mollie manages our content, making sure our readers get the best quality resources about customer loyalty and retention.

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