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FMCG Loyalty Programs: Did L’Oreal Get It Right?

l'oreal fmcg loyalty program

It’s no secret that brands which favour customer acquisition over customer retention do so at their own peril.

After all, a two per-cent increase in customer retention is the same ascutting costs by 10%, and a five per-cent increase can result in a125% rise in overall profits.

But how can brands that sell fast-moving consumer goods (FMCG) through supermarkets, pharmacies and retailers directly engage consumers to boost brand loyalty and retain more customers? FMCG loyalty programs seem to do the trick.

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Case in Point: L’Oreal Worth It Rewards

cosmetics fmcg loyalty program

Image Source: Today

You can find plenty of tips onhow FMCG brands can increase customer loyalty in our other article, but let’s take a look at an FMCG brand that’s already achieving phenomenal results with a digital loyalty program: L’Oreal.

As a titan of the skincare, cosmetics and haircare industries, L’Oreal has consistently proven itself to be adept at innovating new marketing strategies as trends shift over time.

Recently, L’Oreal appears to have redirected its marketing efforts away from time-tested strategies like celebrity endorsement and high-budget advertising. This new strategy is all about creating a personalized customer experience, and it’s very much geared towards customer retention, instead of customer acquisition.

Cosmetics-lovers are encouraged to subscribe to L’Oreal Worth It Rewards by signing up via the online portal (registration can be linked to Facebook for social media sharing, thus paving the way for additional free advertising).

From there, customers fill in details about their current beauty regimes or patterns, personal tastes and style preferences, products they’re interested in trying, and so on.

fmcg loyalty programs tiered rewards

Image Source: L’Oreal

The more information that subscribers offer L’Oreal, the more rewards they receive in return, thus the more targeted their product recommendations and special offers become. This tempts subscribers into buying more items, which provides L’Oreal with more information.

The offers get more and more targeted, the customer experience gets more and more personalized, the spending gets higher and higher, and round and round it goes!

Not only does this kind of digital brand loyalty trump physical stamp cards or “Buy X, Get Y” rewards models in almost every way, but L’Oreal controls the entire process without requiring any input from the intermediaries that actually sell L’Oreal products worldwide.

This is a great example of how FMCG loyalty programs allow brands to bypass third parties and engage their end-customers directly.

This approach to loyalty marketing is basically competitor-proof; especially when you provide your customers with anomnichannel experience.

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That’s not to say the Worth It Rewards program is perfect, though...

l'oreal worth it loyalty programs

Members earn five loyalty points for every dollar they spend, and these points can be cashed in for makeup, haircare, skin care, and just about every other cosmetics item you can think of.

If you’re feeling charitable, members can also donate their loyalty points to a good cause of their choosing, under L’Oreal’sWomen of Worth program.

Here are some other ways members can earn loyalty points:

  • Follow L’Oreal on various social media channels (50 points, or the equivalent of spending $10 on L’Oreal products)
  • Viewing and saving articles on the L’Oreal website (5 points per article, or the equivalent of spending $1 on L’Oreal products)
  • Referring friends (10 points per referral, or the equivalent of spending $2 on L’Oreal products)
  • Writing product reviews (25 points per review, or the equivalent of spending $5 on L’Oreal products)

However, while this all sounds great, it’s worth noting that 450 points (the equivalent of spending $90) gets you a $3 discount on your next purchase. When you crunch the numbers, the overall value is a little underwhelming.

As for the convenience factor, L’Oreal has missed a huge opportunity by failing to offer its rewards members a mobile app.

no app for loreal fmcg loyalty program

If you’re looking for Worth It Rewards in the App Store or Google Play, don’t bother… you won’t find it.

Customers who wish to engage the loyalty program on their mobile devices will need to look up the L’Oreal website in their web browser and log in, where you’ll quickly realize the website is hardly optimized for mobile.

There is also no receipt scanning technology whatsoever. Customers must manually enter the 12-digit UPD (unique product code) from each and every L’Oreal product they purchase, and then take a photo of each individual receipt to send L’Oreal, ensuring that the photo is clear and all information on the receipt is legible.

loreal worth it rewards validation system

Image Source: Below Freezing Beauty

As indicated by some reviewers, this system is quite tedious, and it just seems like a very roundabout way to go about the redemption process.

This is where L’Oreal falls short on offering Worth It Rewards members a cohesive and user-friendly experience across multiple devices and brand touchpoints – something which is crucial for FMCG brands looking to directly engage customers.

As enticing as the Worth It Rewards loyalty program is, L’Oreal has failed to add the icing on the cake for a fully integrated and engaging brand-customer relationship.

So, let’s talk about the icing…

Receipt scanning makes FMCG loyalty programs more convenient for the consumer.

Receipt scanning is a method in which customers engage a brand’s loyalty program via mobile app, using their phone camera to upload receipts and accrue loyalty points for purchases.

It provides the brand with access to all the same data points that a program like L’Oreal’s Worth It Rewards grants, but it’s also much easier for customers to engage.

The receipt validation software analyzes the data on customer receipts and automatically uploads it to the rewards platform database. With no need for point-of-sale integration, this solution is remarkably easy to implement across various locations and distribution channels at once.

Unique QR codes are another way that FMCG brands can directly engage the end-consumer, and you can weigh up the pros and cons ofreceipt scanning vs. QR codes in our other article.

To discuss how Stamp Me can create a fully customized and highly engaging digital loyalty app for your brand, get in touch with a member of our friendly team today.

Stamp Me provides loyalty solutions to businesses large and small, from our own Customer Loyalty App to fully customised loyalty and rewards programs for enterprises and brands.

Contact us if you would like to discuss a loyalty or rewards solution for your business or brand.

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