Loyalty and Retention

Discover How to Retain Customers with these 5 Ideas from the Ulta Rewards Program

June 2, 2022
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As a store owner of beauty products, you've probably wondered how you can retain customers and drive them to buy more from you. Beauty rewards programs are quite common, with many leading beauty brands, like the Ulta reward program.

In fact, the beauty and cosmetics industry is one of the best industries for loyalty programs.

And if you work in the beauty industry, then you've probably heard of Ulta's rewards program 'Ultamate' and Sephora's Beauty Insider.

You're probably thinking 'But these are really BIIIIG brands. My store is much smaller!'

Well, here's the thing: Beauty rewards programs work for everyone. :)

Whether you have hundreds of customers or just a handful but want to grow, loyalty programs work.

Loyalty marketing is literally for everyone. And it helps to have a loyalty program that shows you care about your customers not just their money.

In this article, we'll show you how the Ulta rewards program works, its top perks, and how you can create your own.

The Ulta loyalty program: Ultamate

Founded in 1990, Ulta Beauty Inc. is one of the largest beauty stores in the United States. As of April 2022, the Illinois-based beauty retailer operates 1,318 retail stores, according to its May 2022 bourse filing. Ulta plans to have 1,500 to 1,700 stores across the US by the end of 2023.

By 2015, Ulta, which is popular for carrying many makeup brands and its beauty salon experience, had created over 22,000 new jobs across the United States.

Moreover, the Ulta rewards program 'Ultamate Rewards' is considered one of the best beauty loyalty programs in the industry.

Since launching its loyalty program in 2003, Ulta has made regular updates to it. And in 2015, the beauty products retailer launched its referral program.

By 2020, Ulta had nearly 32 million members in its rewards program. These members account for roughly 95% of Ulta's sales, including purchases across its mobile app and website.

Moreover, its platinum and diamond members (tier 2 and tier 3, respectively), on-average spend $1,700 per person each year.

How does the Ulta loyalty program work?

One of the most beautiful things about the Ulta rewards program is how they are super clear about every step and aspect of their program.

This clarity distinguishes Ulta from other beauty brands and also helps it brand its loyalty program.

Ulta describes its rewards program as "our way of thanking our loyal guests for choosing Ulta Beauty." This statement immediately signals a connection between the brand and its customers.

But Ulta isn't just about fancy words. The benefits in its rewards program show customers how Ulta says 'thank you.'

Like most loyalty programs, the Ulta rewards program is free to join. And customers get one point for every dollar spent on Ulta's website, mobile app, or in-store.

But that's not all. By creating a tiered loyalty program, Ulta can easily rewards its super loyal and top-spending customers. Ulta's Platinum and Diamond tiers offer more perks to those who spend more.

benefits of the ulta rewards program for customers

As you can see, the more you spend at Ulta Beauty, the more benefits you get. The value for each dollar spent increases and you get a voucher on your birthday along with other perks.

And even if you're on the Free or basic tier, you still get a free gift and 2X points during the month of your birthday.

Create your own beauty rewards program the Ulta way

Now that you've seen how the Ulta Beauty rewards program works, let's see how you can mimic its top benefits in your beauty reward program.

By the way, you don't have struggle with code and launch your program from scratch. Use Gameball's loyalty and rewards program and customize it to your brand and products.

1. Tell your customers you have a rewards program

The first step in getting customers to use your loyalty program is to tell them that you have one.

You'd be surprised but some customers discover stores' and brands' loyalty programs by chance! (Don't be like those stores!)

2. Explain how your rewards program works

You've seen Ulta's loyalty program frequently asked questions (FAQ) page. They've included information for every possible question they could think of – and that customers have probably asked over the years.

Define the main elements in your loyalty program and create an explanatory page to answer your customers' most pressing questions.

This will help them get a clearer picture of what's in it for them so they can use your rewards program more frequently.

3. Remember your customers' birthday  

When customers join your loyalty program, ask them to include their birthday. That way, you can make customers feel special on their birthdays.

Ulta gives customers double points for the entire month of their birthday. You can do the same, or change this perk to the same day or to a whole week.

This entices customers to buy more seeing as they will be rewarded twice.

Consider offering them a birthday voucher. Ulta gives customers a $10 gift voucher. Not too much, but enough to encourage a customer to buy something they may have been considering for some time.

One brand offers a 50% discount on a single purchase during the customer's birthday month. You don't have to go all the way to 50% but consider a 20% discount for any single purchase during the week or month of your customer's birthday.

They won't miss the chance to use the discount, buy more products, and increase their average basket size.

4. Encourage inclusivity

The beauty industry is one of those industries that caters to people, especially women from all colors and walks of life.

One way to build loyalty, and Ulta does this well, is to encourage inclusivity and diversity.

In February 2021, Ulta launched its Muse campaign which celebrated Black women and their influence in the beauty industry.

Whether you choose to celebrate Black History Month or create a campaign through partnerships with other brands is up to you.

5. Use tiers to entice customers

The Ulta rewards program is a great example of a tiered loyalty program. The US-based beauty brand uses its tiers system to offer bigger benefits to high-spending customers. In other words, Ulta recognizes its brand-loyal customers with better perks.

Considering creating similar tiers in your rewards program and offering your top-spenders additional perks to keep them coming back.

The tiers also translate into a higher average order value for your business. In addition, they may entice customers to spend more in order to move up and gain the extra perks.

Further reading: How to Measure the Success of Your Loyalty Program: 7+ Metrics You Need to Know

More ideas for your beauty rewards program from Gameball

If the above Ulta-inspired loyalty ideas aren't enough, here are a few more you can do with Gameball.

1. Segment customers and personalize rewards

Whether you choose to do that with tiers or using Gameball's profiling and segmentation feature, that's up to you.

Using Gameball, you can segment customers based on how much they buy from you, the type of products they buy, or even how many points they earn per month.

You can then display certain ads to them, provide them with unique purchasing opportunities, create personalized rewards, and more.

2. Use challenges and badges to engage customers

One of the most fun-filled features in Gameball is the challenges feature.

You can create a challenge with a few easy-to-do requirements and customers who perform these requirements, win the challenge and earn a badge.

Create challenges with Gameball

What they win in the challenge is entirely up to you. It could be a gift voucher, double points, a special discount, one month of free shipping, or something else.

3. Let customers redeem points in various ways

One of the problems that often occur with loyalty programs is that they become too transactional.

Instead, and using Gameball, you can provide multiple ways that customers can redeem their points.

Mistakes to avoid in your loyalty program

Operating in the beauty industry can be quite challenging, from high competition to picky customers, to much more. Having a loyalty and rewards program means you can stand out and retain customers.

After all, customer retention means you can cut down on acquisition costs and increase your revenues.

Further reading: 6 Creative Ideas to Boost Your Customer Retention Rate

However, when you begin setting up the basic elements of your rewards program, you may want to avoid a few common customer loyalty program mistakes.

These mistakes include not setting up a value for points earned. How much does a customer need to spend to earn 100 points? And what do these 100 points translate to when it's time to redeem them?

Another common mistake is to keep changing the value of points without notifying customers. Are 100 points today worth $10 and tomorrow worth $1? The customer's first thought would be 'I'm outta here!'

Final words

You don't have to be a major retailer to create a loyalty program. All you need is a website, products, and you're good to go.

But having a loyalty program for your business means you can build brand loyalty, create unique experiences, acquire new customers, and retain current ones.

As the owner or marketing manager for a beauty brand, you don't have to follow in all of Ulta's footsteps. Just remember that Ulta is a big brand and they've had years of trial and error. What you can do is get the icing of their experience and use it to your advantage.

If you'd like to see just how a loyalty and rewards program can help your business acquire new customers and retain current ones, book a demo or explore the free version of the Gameball app on Shopify.

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