What comes first – the chicken or the egg? Tough one. But when it comes to Ulta Beauty, it’s pretty obvious that the 40 million active loyal members (people who purchased within the last 12 months) who drive more than 95% of their sales came after the brand worked to create an unmatched value proposition.
One based on brass tack consumer insights about what consumers value. Convenience. Price points. Assortment. Experience. Celebration.
I think of their success as based on 5 ‘integration’ pillars that hold everything up.
5 Types of ‘Integration’: Lessons from Ulta Beauty
1. Integrating with the business
Ulta has a loyalty culture, which means everybody owns loyalty, says Nicole Bernhardt, the Head of Ultamate Rewards. Loyalty is embedded into the product and the experience, with the Ulta Beauty and Ultamate Rewards value propositions closely aligned.
Business KPIs are driven by ‘transactional, receipt level’ data (items like basket value and member tenure) but also by ‘program engagement’ data, which tells them what features of the program are actually being used, and how members derive value from it.
The 95% ‘member sales penetration’ metric speaks to the strategic importance of the program to the business. It is respected and supported by the C-suite and every team – from logistics to finance, seen as a brand and business differentiator, and discussed (and celebrated) in every earnings call.
2. Integration with partners
External partners help expand the network of earning and redemption possibilities for Ulta members. But thanks to nifty co-branding, consistent messaging, and ease of sign-up and use, it’s easy to believe it all comes out of one office.
For instance, the Ultamate rewards program is supported by an ‘in-house’ credit card to earn and burn within the Ulta system. The Beyond Ultamate Rewards with Mastercard offers more range in terms of where a member can earn and redeem points, including at partner brands.
The credit card and loyalty program concepts are closely integrated and seen as a multiplier and accelerator of loyalty.
3. Internal integration with associates
More than 55,000 field associates in 1300 stores stand at the forefront of the loyalty program and the CX.
They are trained not just in how to deliver the brand and loyalty value proposition to the customer, but also in the value a loyal customer brings to their store and to their own success.
A team works full-time to engage these associates and get the field dynamic right. The playbook is all about engaging customers with meaningful experiences – not just in the rewards, but in everything from product discovery to checkout and promotions.
4. Cross-channel integration
A seamless experience, be it a mobile app, website, or in-store ensures that the brand and the program follow every shopper’s unique but non-linear journey. The loyalty program, says Bernhardt, is the key to delivering those seamless experiences because of the rich data it delivers. ‘Personalized experiences’ are a broad spectrum – as simple as addressing a customer by name to as complex as serving the right product recommendation at the right moment on the right channel. The business model, powered by macro and micro-level data, is built to handle such ongoing consumer shifts across the breadth of products and propositions, on any channel.
5. Integration into the members’ life
Salons, credit cards, partner stores like Target mini-stores, and more. The Ultamate Rewards program factors in all the key aspects of the consumer’s life to create value.
Products, services, payments – everything people may want is available within the brand. The reality is beauty can be anything from health and wellness to cosmetics and hair care rituals – the program is designed to work through that range of needs and create value at multiple points.
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