Sephora rocks the boat with loyalty programme changes

Many big retailers have rewards and loyalty programmes to be admired we would fall over ourselves to replicate. Sephora was one of those, and if you’ve got more than a passing interest in makeup (we do – we put a post up about lipstick mere hours ago) you’ll have heard of the brand. Housing multiple beauty counters in one place, it’s Disneyland for highlighters with loyal followers and devotees online and offline. It also racked up loyalty with nice gifts, miniatures by the till to get people interested in new products, and a reward programme that offered perlks every time a customer spent with them, which could be redeemed for free products or exclusive trips.

However, the retailer announced a major change that affects how customers might choose to use their points on the Beauty Insider, VIB, and VIB Rouge loyalty schemes and now, have a minimum spend of over $300 for VIB benefits and $1000 for VIB Rouge membership.  They’ve also added an 18-month expiry date – much tighter than the last window of ‘never expiring’, and the internet is hopping.

Twitter was filled with the customers who had been quietly, loyally spending and saving the points feeling upset, let down and confused about the change and how that spoke to them as customers – fans, even.

One user – CLVK19‏ @MoonMagic19 tweeted:
@Sephora So our loyalty now has an expiration date? Take a clue from other closing retailers. ALWAYS MAKE YOUR LOYAL CUSTOMERS HAPPY

It’s a steep lesson in how to get your loyalty points bang on before execution coming on the heels of a ‘Reward Day’ for the brand that was executed poorly and led to more Tweets of Doom.

Read: Twitter Is Really Pissed at Sephora Over Their “Epic Rewards Day”—Find Out Why It Became an “Epic Fail”

Speaking to DallasNews Melissa Fruend, a partner at LoyaltyOne Global Solutions said “Brands can’t be complacent. They have to look at their top-tier customers and make sure they’re taking care of them. People want to be recognized for their loyalty.”

It echoes the dip in Starbucks growth over 25 quarters at 5% or more reported in 06 by Forbes., which coincided with the change to their reward programme – which had previously given perks for frequent visits but instead moved to give loyal customers free drinks depending on the value spent, which led to slower turnaround at the cash register. Whilst it was a move that was meant to salvage against cannibalization of the programme through ‘gaming’ the system, it still went down like a lead balloon, especially when the changes showed that members of the rewards program went from getting a free drink after buying just 12 $2 coffees to $63.

How to handle it

It’s nothing that a strong brand can’t handle. The same backlash hit Birchbox when they changed their points scheme in 2016, and advocates of the brand did back them up. It’s key to stress your pure motives for changing any programme – and to talk in benefits, not losses.

Any change to a loyalty or reward programme will cause friction. People hate change and they don’t like to feel shortchanged. It’s important to make a slow roll out and have your comms prepared. Starbucks released a blog post speaking of the merits of the change. It took the heat out of the situation.

ASOS gave a big heads up when they changed their programme in June 2017  – the changes to the ASOS A List rewards scheme means points expire if customers don’t shop for six months, but the alerts came out way before, with details launched in May.

Accor hotels have also got a greatly detailed web explainer of the changes to their reward programme – no scrappy PDFS here!

Make sure your loyalty and reward programme sets out it stand from the start. Take a look at the Harvey Nichols page – a stunning example of how to do FAQ’s in a way that’s on brand, simple, and smart.

Importantly – loyalty is key, but it’s not life or death. If you’ve made savvy, analytically based business decisions on why to move or pivot your programme, then stand by that, be polite and respectful, and roll with it.