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For the loyalty program at Sally Beauty, everything starts with an email address. It may end up with consistent customer engagement, sophisticated data analysis, and increased sales, but the first step in the process is ensuring that it can reach customers directly and effectively.

Therefore, when customers enter one of the retailer’s 3000 stores or visit its online sites, they receive an invitation to purchase a $5 membership into the program, with the promise that they also will get a $5 coupon via email. Thus, the company learns customers’ email addresses immediately, enabling it to share information about itself that might engage these shoppers on a more emotional level.

Next, it takes a careful look at what the customer buys. As an example, the company’s chief marketing officer (CMO) notes that if a customer purchases hair dye, that person is likely going to need color-safe conditioner, perhaps a touch-up tool, and then another box of dye in about six weeks. Therefore, Sally Beauty times special offers and incentives accordingly, sending email messages and coupons at just the moment the customer is likely to be looking to purchase those items. It plans to add targeted advertising too, such that a banner advertisement that pops up when a loyal customer accesses the website would feature a model whose hair color matches the color that the customer bought most recently.

Beyond such immediate information, Sally Beauty works to leverage the data it gathers from its loyalty program to design new offerings that will appeal to the demographics and preferences exhibited by its loyal customers. In the CMO’s own words, “We’re at a place where everything is driven by the customer and driven by data.”

Discussion Question:

  1. How does Sally Beauty leverage its loyalty program to appeal to consumers?

Source: Drew Neisser, “How Sally Beauty Gave Its Loyalty Program a Stunning Makeover,” Advertising Age, April 5, 2017

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