Wednesday, April 2, 2014

Thank You for Shopping: Customer Loyalty Programs

Spend $350 at the Red Cross and you get a free pint of O negative!

Yesterday, I was informed that I’d “unlocked” the “VIB Level” of Sephora’s customer reward program. What this means in Sephoraspeak is that by “earning” 350 “points” at the store, I will receive seasonal VIB-only gifts—presumably along the lines of the free lip gloss I received whilst shopping during my birthday month, back when I was merely a Sephora “Beauty Insider”—that I will have advance access to sales, and that I get “dibs” on new products, so that I will be the first lady on the block to have NARS’s newest nail polish in Quivering Otter, or whatever the color of the season is. 

What this means in you-and-me-speak is that I have spent more than $350 at Sephora—not, as the company would put it, “earned” more than 350 “points” at Sephora—since this time last year.

It was a shock to realize that I’d spent $350 at Sephora in the past 12 months, to be sure, but my financial navel-gazing is another post altogether. What “unlocking” this “VIB Level” made me think about was customer reward programs, and what we’re supposed to get out of them. With many customer loyalty programs, you actually save money. You might do this immediately/directly, as in my drugstore’s practice of advertising “specials” that are only “specials” if you are literally a card-carrying member of the drugstore’s loyalty program, or it might be savings down the line, as with frequent-flier miles. But the point is: You save money, as in cash, as in you have a compelling financial interest to use the loyalty program (which, of course, means that to some degree you’re loyal to the vendor, though of course consumers can belong to multiple loyalty programs, making them not loyal at all).

Sephora is a different beast altogether. You don’t save money with Sephora’s loyalty program; it’s more that you get the opportunity to spend more money at Sephora. I mean, sure, getting a free lipstick now and then might count as saving you money, if that shade and opacity of lipstick happens to be the kind of lipstick you’re looking for. Same thing with access to sales on specific products that I’d “unlocked” via spending 350 smackers. But as I hemmed and hawed over my possible “loyalty gifts” at checkout I realized that what I was spending my points on—which, as a reminder, are "points" "earned" because I’ve already blown plenty of cash there—were sample sizes of products I could then buy full-size versions of if I liked them. My options were things like a Sephora kit with a mini bottle of makeup remover, black liquid eyeliner, and a tiny gold shimmer creme liner costing me 500 “points,” or, as a token of appreciation for spending merely 100 dollar/points there, I could have a wee tube of makeup primer or something I think was called “lip sugar”?

If a company is going to supposedly reward me for being loyal to it, what I want them to give me as proof of their loyalty is what they have plenty of—money. I’ve got some thinking and research to do about loyalty programs before I come to any grand conclusions, but my hunch here is that part of why Sephora can get away with a loyalty program that promises specific goods, not money that can be spent anywhere, to its customers is that in some ways it’s truly a unique outlet—there are plenty of beauty stores out there, but few with the ability to try on nearly everything offered for sale from a variety of brands. (Estee Lauder’s technique of touching everyone who came into her stores translated into more sales of Estee Lauder products, but when Sephora associates touch you to guide you to the right blush for you, that touch is translated into sales for Sephora, regardless of the intermediary brand.) In this sense, Sephora doesn’t need to have a rigorous loyalty reward program—they don’t have a competitor that’s truly equal. Sephora doesn’t need to give you a financial discount for your loyalty; what Sephora needs to do (and has done) with its reward program is give consumers the sense that by shopping there, you’re special. You’re a Beauty Insider, or a “VIB” (which, by the way, acronym for…? Very important Beauty? Why, thankyou) if you accrue enough “points”. You get access to a VIB-only section of Sephora.com discussion forums; you get to attend private Sephora events. You get the sense of somehow being a part of something exclusive, even though the only reason you’re invited is because you’ve managed to drop enough cash there over time.

Still, the free-goods approach makes more sense when the goods are something of equal-ish value to all consumers—like, say, frequent flier miles and airline tickets. If I’ve earned enough miles to get a domestic ticket anywhere in the lower 48, well, great, I can go to Kansas or Los Angeles or the Outer Banks or wherever I want to go. But when I earn enough Sephora points, I get to choose between, say, a “Caviar CC Cream” for my hair or a self-tanning gel and maybe a couple of other things, none of which might apply to my desires. This might sound like the ultimate middle-class whine: Oh, after the three hundred and fifty dollars I spent at fucking Sephora I have to choose between hair caviar and a self-tanner, life is hard. But that’s not really my gripe here—sure, I like money back as much as the next person, but after one has “earned” 350 “points” by buying lip liner, one sort of forfeits the right to grumble about money per se. My gripe is the way this particular loyalty program uses its customers’ loyalty to reinforce its own importance and expertise: “Get a taste of some of our most coveted products,” coos the copy above the rewards you can choose from. Our most coveted products, not your most coveted products. That is: You don’t need to get money back from our loyalty program—trust us, the experts, to give you fair value. You’re literally paying to align yourself even more with the company; its loyalty program doesn’t just reward past loyalty, it engenders future loyalty too. I mean, one of the “gifts” you can opt for is the 250-point Sephora phone cover, which allows you to essentially pay Sephora $250 to advertise for it.

I’m wondering about people’s experiences with reward programs in general, whether it be at Sephora, another beauty company, or something like your grocery store. I have what’s probably a disproportionate amount of hatred for them, having grown up with a mother who steadfastly refused to participate in them because, as they tracked your purchases, it was “just too Big Brother.” (Side note: Her anti-surveillance stance dueled for years with her frugality, until she devised a compromise—she would participate in loyalty programs if they offered a steep enough discount, but she would only pay in cash so that the credit card companies couldn’t track those particular purchases. One Big Brother cancels out another, it seems, though even she will admit the logic is dubious at best. Anyway.) What are your experiences with customer loyalty programs? Do the returns seem worth it to you? Do the sorts of goods in question factor into your signing up—like, are luxury goods such as high-end makeup more or less likely to make you participate in a rewards program? And am I the only one who now wants to spend far less at Sephora now that I can so clearly see how much money I’ve been spending there?

13 comments:

  1. I was recently downgraded from a Sephora VIB to just a Beauty Insider, and I realized that I really didn't care. I don't wear enough makeup to make it worth spending more just to become a VIB (upon reflection, I think I became a VIB after a couple of trips with my teenage daughter). The one or two "gifts" I picked up with my points went to her as well.

    It's like Birchbox; I unsubscribed from that a couple of years ago, but I still have points I could use if I bought more stuff from Birchbox. I just can't be bothered.

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  2. I've had similar thoughts about Sephora's loyalty program, especially after participating on a makeup forum where some women belonged to the highest level, meaning (I think) that they spent $1000+ at Sephora each year. They felt there was such cachet in belonging, but I was rather baffled. The program simply means you are spending a lot of money there, and when some of the "rewards" are just opportunities to purchase new items before the hoi polloi, it seems like an artificial demand is being created. Now I shop at Sephora myself, and I've qualified for some of their rewards, but they are often dinky enough that I let the points sit in my "beauty bank" for years. And I agree that they aren't necessarily items I would ever purchase myself. Besides, we all know that samples are only inducements to purchase at full size.

    I like Sephora. It's fun. But I don't buy that spending a certain amount of money there makes me special or creates any value.

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  3. A store earns my loyalty by offering high quality merchandise at fair prices. I am currently boycotting a local drug store because of its "customer loyalty program" that send me zillions of emails and offers what is essentially a graduate level computation requirement in order to know what their prices might be "for me" (special little me), as opposed to everyone else. Ditto a supermarket that "targets my needs" and supposedly offers "personal discounts" (they were recently fined for misleading customers, and they richly deserved it). I absolutely despise the marketers who try to pander to my perceived pathetic need to feel special, and who imagine that I just plain can't count. And I am far too old to fall for such shell games.

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  4. I avoid all such programs because they're set up to manipulate you. Any "rewards" they offer aren't worth the trouble. The reaction you describe is one I try to avoid having.

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  5. I'm mildly embarrassed to admit that I'm a VIB Rouge, which is the top level. You're right, there really isn't any value to it, and it's especially disappointing to those of us who really like samples and sales. Getting to buy a new product a few days before everyone else isn't a big deal to me - I'd rather have more sales per year and more sample offers. I also think they should let you stack codes for samples at checkout the way Gap/Piperlime/ON/BR does for discounts. I'm a VIB Rouge, shouldn't I be able to enter up to 3 codes and get more samples?! You don't get any more discounts than you would normally, except for a 15% off deal each April. VIB Rouge also automatically gets you free 3-day shipping with any order, but apparently they kick you out of the program if you do small, frequent orders. See here: http://www.makeupwithdrawal.com/2014/01/sephora-vib-rouge-disappointment.html It's not such a great deal. The only thing that appeals to me is the sort of "prestige" - not the amount of $ I spend, but taking out that member card when they ring you up...it makes me feel special. Which, as other commenters have pointed out, is dumb. Yet I'm not inclined to spend less there.

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  6. Savannah ScorpionApril 3, 2014 at 3:07 PM

    I am a Sephora VIB, and I enjoy the program because I find the samples to be pretty generous. I haven't had to buy black mascara in 6 months because I keep getting so many deluxe samples as rewards. I recently got a deluxe set of hand creams from a company I like,, but wouldn't necessarily pay full price for.

    I used to work at Ulta, which has an ULTAmate rewards program. the points you accrued could be redeemed for discounts, and members got a coupon every month that could be used toward the mass products.

    If you work in retail, you'll watch plenty of training videos that encourage you to sign up people for a loyalty program because members of loyalty programs spend more money at the retailer.

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  7. I have to admit, I also just reached VIB status at Sephora, and while my initial reaction was to be appalled at how much money that meant I had been spending there, this was closely followed by a small glow of completely baseless satisfaction. I don't know why, but unlocking higher levels of membership DOES feel like some kind of achievement to me--even though I know that the only thing I've actually achieved is the further depleting of my checking account. I don't know if it's just me, but I was raised by parents that believed in obtaining the highest level of accomplishment that can be measured and acknowledged in some concrete form--e.g., grades, standardized test scores, etc. I feel like that feeds into it somehow.

    If it makes you feel any better, I consistently place significantly more faith in the VIB user reviews on Sephora's website. I figure if those people are spending so much damn money on cosmetics, they're probably more qualified to talk about them and compare them.

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