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Editor’s Note - This story was originally published in December, and is part of Loyalty360’s “Best of 2016.” We wish you and your family a happy holidays, and will return to our regular content schedule in 2017!
Ulta Beauty has firmly established itself as a premier beauty destination, and it is on a self-proclaimed quest to “Bring the fun of beauty to all.”
Delighting its guests is at the heart of what Ulta Beauty does and who it is. The company focuses on the customer in every step, from rolling out the credit card offering, to developing the value proposition, to store associate training, to targeting the most relevant customers, and to its multichannel communication strategy.
Ulta beauty’s very successful Ultamate Rewards loyalty program has more than 20 million members, while a staggering 90 percent of company sales are driven by program members.
As a result, Ulta Beauty recorded two big wins at the third annual Loyalty360 CX Awards held on Tuesday at the 6th annual Engagement & Experience Expo presented by Loyalty360.
Ulta Beauty won a Platinum Award in the Brand Messaging category and also garnered the Marketer’s Choice Award.
Opened in 1990, Ulta’s total sales in 2015 were $3.9 billion.
Linh Peters, senior director of loyalty marketing and strategy, Ulta Beauty, told conference attendees that the company’s former loyalty program wasn’t so rewarding.
“This (Ultamate Rewards) is very focused on the guest,” she said. “The loyalty program is about building an emotional connection, making it fresh, fun, and real.”
Ulta has about 1,000 stores, 20,000 products from 550 brands, with a goal of opening 100 new stores per year, reaching goal of reaching 1,700-plus stores. Most people, Peters said, don’t know that each Ulta store has a salon.
Ultamate Rewards loyalty program has three tiers: Diamond, Ruby, and Emerald.
The company’s brand vision is to be a beauty lifestyle, “creating new and current guest obsession by becoming an emotion- and experience-centric brand,” Peter said.
In 2003, the company rolled out Ultamate Rewards in three markets, testing different versions of the program. Over the next 11 years, it added markets and refined the program. It wasn’t until 2014 that the company introduced Ultamate Rewards to all of its stores across the country.
As an organization, Ulta’s overarching strategic focus across the enterprise is to put the customer at the center of everything it does. The foundation for this focus lies within its loyalty program.
Ultamate Rewards’ value proposition is focused on three key areas (1) rewarding her purchases with points (often 2x-5x the base value) (2) recognizing her key moments such as her birthday, membership anniversary and upgrade to elite status and (3) providing its most engaged guests additional rewards and recognition, such as product exclusives, early access and richer rewards to thank her for her loyalty.
At Ulta, it’s all about exceeding customer expectations. And that starts with understanding the customer.
Ulta’s transactional customer data helps it understand guest behavior and preferences, which allows for relationship building through highly targeted and relevant messaging and promotions via direct mail, email, mobile, digital, and point-of-sale communications.
The company’ sophisticated customer research data, such as demographics and psychographics collected through primary and secondary research, helps it develop a holistic understanding of its guests, further fueling a CRM and loyalty strategy that is highly targeted, relevant, exciting, and engaging for our guests.
A final key element to understanding customers at Ulta is listening to her “voice” through each interaction with Guest Services and our social communities. Customers are encouraged to provide feedback through satisfaction surveys, obtained shortly after a shopping visit or Guest Services interaction.
The Ultamate Rewards program has established an incredibly strong foundation that enables Ulta to truly be guest-centric in every part of the business. Recently, Ulta took the loyalty program to the next level by launching a credit card program as an add-on benefit for loyalty members-only. The value proposition for the credit card leverages the founding principles of the loyalty program, which is to be simple to use, easy to understand, and rewarding.
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