Beauty being an intimate industry with very personal choices of cosmetics and services demands a high level of personalization and targeting. A loyalty program backed with data analytics can accelerate the ability of beauty brands to personalize their approach, deliver experiences, and build engagement. New research shows a 222% increase in customer acquisition costs puts renewed focus on e-commerce profitability and repeat sales.
Loyalty program essentials to:
- Increase revenue
- Increase purchase frequency
- Boost customer retention
- What helped the DefenAge Skin Club Rewards Program succeed?
In this webinar conducted on 16th February 2023, industry experts Brad McLaughlin – Director of e-Commerce, DefenAge®, Annette Berg – Director of Customer Experience, DefenAge® and Dibyo Ghosh, Director of Enterprise Solutions at Zinrelo share their insights on how DefenAge, a leading beauty and skincare company, increased repeat revenue by 2.89X by launching a very successful loyalty program with Zinrelo. Watch the recording for the webinar below:
Watch the webinar recording here:
Key highlights from the webinar:
Why was DefenAge looking for a Loyalty Program
- Defenage already had a high customer retention rate but wanted to increase it further while giving their customers a great luxury experience.
- Purchase frequency – Increase re-order rate within current customers and increase AOV with upselling & cross selling.
- Improve advocacy – Acquire new customers via referrals and word of mouth, social sharing (Earned media)
- Improve branding & customer engagement – Building a better understanding of who we are as a company with a connection for our customers, and specific to their industry.
- Provide a seamless experience to customers and also for the admin at the backen
Why did the loyalty program work
1. Contextual Program design
- Zinrelo helped in the program structure by analyzing Defenage’s historical purchase data and understanding their business objectives.
- This helped in creating a well-structured program that was tailored to our needs, which improved customer retention and repeat purchases.
2. Multi-dimensional loyalty – transactional to emotional, including advocacy
- The big win was referrals & customer acquisition through advocacy.
- Defenage achieved 100X of our investment for the setup of referral campaigns.
3. Ongoing strategic consultation
- Custom reports: list of members downgraded on Jan 1, 2023.
- TAT: 10 days – outside of Zinrelo’s contractual commitments
- This helped in re-engagement, winback campaigns and boosted Jan sales (a typically low season)
4. List of recommendations made by Zinrelo based on analysis
- Promotions (e.g., 5x points on the 4th July weekend for Purple tier members)
- Optimum Tier thresholds Points – 3Tier
- Win Back at 6 months
- Points expiration of 12 months (vis-à-vis 15) – business strategy to be aggressive
- Adding additional Tier Benefits apart from Tier Acceleration 1.25X for Middle Tier and 1.5X for Top Tier
- Repeat revenue per member: 2.89X increase
- Purchase frequency: 71% increase
- Customer retention: 31% increase
- Referrals: ~ 100X ROI of referral module
Excerpts from the Q & A Section of the Webinar
Q1. How did Defenage keep new customers engaged?
- Different activities to earn points which gets customers engaged with the brand keeps them coming back to the website.
- Loyalty points and targeted campaigns with very specific customer attributes ensured the customers remained emotionally attached to the brand.
Q2. Apart from the numbers what other benefits can we get from a loyalty program?
- Defenage have benefited in other ways that are difficult to quantify.
- For example, there is a much better overall customer experience and delight – a bit of an emotional experience for customers, and that’s attributable to not only the program but the design and perks.
- Conversion of website visitors to customers has increased and Defenage sees more traction on social media, increase in advocacy, and referrals.
Q3. Summer months are generally low volume for cosmetics products. How can a loyalty program help?
- Focus on highest selling product and provide tier upgrades.
- Targeted bonus points campaigns