Loyalty Programs – The Health and Beauty Industry’s New Best Friend

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It has often been said that if you want loyalty, get yourself a dog. For the health and beauty industry, however, this statement may not be entirely true. As the sector continues to navigate the fallout from the current COVID-19 pandemic, it seems that it may have found a new best friend, in the form of the loyalty program, to help it get back on its feet.

As hair salons, spas, nail bars and the like contemplate how to get customers back through their doors, loyalty programs are proving to be a critical component of this strategy. Let’s examine how.

Not a Pretty Picture

In a recent article, we highlighted the toll that the Coronavirus crisis and subsequent lockdown regulations have taken on the hair, health, and beauty industry. By most estimates, the global sector stood to lose up to 30% of its annual revenue due to the crisis. Since then, new statistics have proven these estimates to be mostly correct.

According to research, US prestige beauty sales experienced a decline of 36% year-on-year during the second quarter of 2020. During this period, however, online sales spiked, helping offset some of these losses. Overall, it is estimated that the US beauty market value declined by at least 25%.

South Africa’s health and beauty market has experienced similar ups and downs. While many salons and spas took a major hit during the more stringent lockdown levels, the industry did see growth in the sale of DIY grooming products. Online sales have also grown during this period.

While this has not been enough to completely offset losses, it has helped to stem the tide.

Back To (the New) Normal

Since the reopening of beauty salons, hair salons, spas and nail bars under lockdown level 3 regulations, the health and beauty industry has seen some movement towards recovery. With customers slowly returning to their favourite hairdressers and beauticians, businesses now have a shot at survival.

Make no mistake though; the rules of the game have changed. No more spur-of-the-moment trips to the salon, no more idle chatter in the waiting areas. Sanitizers, surface disinfectants and sign-in registers have all become part and parcel of the ‘new normal’.

There’s Beauty in Loyalty 

As the health and beauty industry seeks to rebuild their customer bases, many businesses are turning to customer loyalty programs to aid their quest. Loyalty programs build customer engagement through constant interaction, ultimately leading to increased customer loyalty and growing sales.

According to recent studies, more than 70% of consumers believe loyalty rewards programs help engender loyalty towards a particular company or brand. Customers who are loyal to a brand are also four times more likely to refer someone else to that brand.

There are numerous reasons why loyalty programs are the perfect partner for health and beauty businesses. Here are some of the key takeaways:

  • Beauty products and services are used with relative frequency. As a result, there is already an established loyalty to the industry. A great customer rewards program can help drive that loyalty towards one’s own business.
  • Customer loyalty programs can provide much insight into current market trends. Businesses can more effectively track purchases to see which products and services are most frequently used. This allows them to prominently position those items which are in high demand. Beauty salons, nail bars and other players can also leverage the ‘social effects’ of the industry.
  • Considering the high mark-up costs associated with some health and beauty products and services, loyalty programs can incentivise customers by offering cashbacks, discounts and other rewards in exchange for their continued loyalty, without sacrificing too much of their bottom line.
  • While much of the health and beauty industry’s earnings are still generated in-store, online purchases are gaining steam. This is no surprise, given the rapid digital transformation currently taking place. Customer loyalty programs present wonderful vehicles for beauty companies to take advantage of this digital proliferation.

Help in the Marketplace

Loyalty programs hold many benefits for health and beauty companies. However, many companies in this sector may feel that customer rewards programs are beyond their reach, due to the setup costs involved.

Fortunately, help is at hand. UBU International has made it simple for any beauty salon, spa, or any other company in the health and beauty sector, to be able to offer their customers an excellent loyalty program without incurring all the costs involved.

UBU allows companies to list their businesses in the marketplace featured across multiple mobile wallet apps, and enjoy exposure to a whole new customer base. These customers are highly incentivised to do business through these mobile wallets since they receive instant cashback rewards on every purchase. Through the innovative payment system and built-in mobile wallet, customer payments are easily facilitated. This feature is quite important, given the drive towards contactless payments in the sector. UBU also makes it easy for new customers to discover businesses offering the goods or services they’re looking for.

The geolocation functionality allows customers to search for new businesses near their location. It’s everything that a health and beauty company needs to solidify its existing customer base, as well as attract new. 

The health and beauty sector has had to quickly adapt to a different way of doing this. Health and safety practices have been pushed to the fore to ensure the safety of customers. Businesses have had to streamline appointments and payment facilitation to minimise contact.

The current status quo requires health and beauty businesses to think outside the box to move forward. Customer loyalty programs are groomed to succeed in this climate. By incentivising customers to keep coming back for instant cashback rewards and other deals, increased engagement is promoted. They can also be used to schedule appointments, facilitate payments, and even detect developing trends.

Given these benefits, it’s safe to say that the health and beauty industry has found a new BFF.

If you’re interested in attracting new customers and rewarding them to keep coming back, while having a fully functional mobile payment solution in place, you can find out more about how it works here.

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