Two years ago, then-Mercedes Benz CEO Steven Cannon said customer experience is the new marketing.
Sally Beauty, the largest retailer of professional beauty supplies in the world, has taken Cannon’s words to heart, as it focused on delivering an improved customer experience in 2016 in its BSG (Beauty Systems Group) business.
“We implemented new in-store merchandising across cosmetics, hair care, and brushes and combs in over 2,800 stores,” Sally Beauty CEO Christian Brickman said during the company’s recent fourth-quarter earnings call. “In addition, we completed the upgrade to our own brand packaging and introduced new brands and products. On the marketing front, we completed our migration to the improved CRM and email platform. As a result, traffic in sales from our beauty customers has improved and we’re optimistic that our tactical marketing issues from the third quarter are now behind us.”
Sally Beauty accelerated its store refresh initiative in the back half of the year and, to date, approximately 1,500 stores have been updated with new flooring, LED lighting, and signage.
“In fiscal 2017, we intend to take a pause on store refreshes to focus our attention on our customer engagement initiatives,” Brickman noted.
Sally Beauty’s BSG business saw sales rise 5.5 percent with same store sales growth of 5.5 percent.
“BSG made terrific progress in expanding its CRM capabilities,” Brickman said. “This initiative should enable us to develop customized messages to licensed professionals based upon their shopping patterns and unique needs. Our beauty app for Stylus is due to be released in January. The app is a comprehensive business tool for Stylus and includes a link to our e-commerce platform for the Stylus and their customers.”
Consolidated same-store sales grew 1.2 percent in the fourth quarter while BSG same-store sales were up 1.9 percent.
Elevating the customer experience was a top priority for Brickman and Sally Beauty in 2016.
What’s more, Sally Beauty revamped the shopping experience in professional hair color, its largest category.
Cannon’s words still ring true two years later.
“Customer experience is the new marketing,” Cannon said. “If you don’t have a passionate, committed executive leadership team … you won’t get out of the gate unless you have that. It’s the most important thing we do. We have the most demanding customers on the planet. Customer experience better be at the top of your list when it comes to priorities in your organization.”
Cannon added that the table stakes for customer experience have changed.
“Now, with social media and the connected environment we live in, a good experience can lead to thousands of connections and a negative experience can lead to potentially more than that,” he explained. “When I started three years ago, customer experience was our number one priority. We put a team together under a general manager who reports to me and we empower that GM to take a more holistic look at customer experience and map the customer journey. This has to be the heartbeat within our group.”