How Mecca Built One Of The World’s Best Loyalty ProgramsWritten by Alice Cresswell | Read
Want to build a loyalty program like Mecca’s Beauty Loop, but don’t have the money or time for custom solutions?
Before building brand loyalty, you need to build a brand. And building a brand? That journey starts with the very first business plan, that spark, that idea on a napkin, that leads you to register a company and step into the wild, wicked, unruly world of retail.
So let’s forget loyalty points programs for the time being.
Look inward for a minute, and ask: Why did I start this business?
For a lot of retailers, their business started out of frustration. Frustration that you couldn’t find what you wanted at other stores, frustration about the lack of selection or curation, frustration about the customer service, concern that salespeople only wanted to sell you what they were getting the most commission for (rather than what suited your needs best).
Mecca Founder Jo Horgan shared why Mecca came to be back in 1997 in an interview for the Australian Financial Review.
“I loved cosmetics – I thought there was a real space for them that should be fun and entertaining. And yet when I went to a department store I found it exhausting, going from one counter to another,” Horgan says.
So she started to think: “Imagine the best product offer, a beautiful environment and my best beauty friend next to me taking me from zero to expert in one session…”
“That’s how I wanted to experience cosmetics myself,” she says.
The first time I went to Mecca, I admitted I used $3 foundation and substituted in cheap eyeshadow with a 10-year-old makeup brush for eyebrow pencil. The response? “Oh darling, sometimes that’s all you need to do the trick!”
He told me he often does the same… and still managed to sell me $150 worth of foundation and an eyebrow pencil. Now that’s some serious sales game.
I tried to unpack this later. The feeling I got was: He’s on my side. He knows where I’m coming from. And I can trust him.
Lesson 1: Hold on to that “why” and don’t lose sight of it. It’s your greatest brand asset.
It’s highly likely the reason you started your business is why your customer is here.
I was surprised to learn that Mecca founder Jo Horgan felt frustrated by the department store experience, just like I did. But in the same vein, it makes sense, based on how shopping at Mecca makes me feel.
Lesson 2: Points programs do not magically create brand loyalty.
A points program is one tool you can use to keep customers coming back. But the truth is, if you’re not doing anything else to support it—it’s not going to have the Mecca effect.
So, let’s take your “why” and I’m going to show you how you can build an extraordinary loyalty program with ordinary, off-the-shelf loyalty software.
How to Build An Extraordinary Loyalty Program With Ordinary, Off-The-Shelf Software
Everything here can be done using Marsello, when integrated with your eCommerce and POS software.
Step 1. Design your tiered loyalty program
Most loyalty software has the functionality to build a tiered loyalty program off the shelf. But before you jump the gun and turn it on, think about what the tiers should look like. Revisit your brand’s vision and mission, and come up with a strategy.
How many tiers are there?
Three is a good place to start. Mecca recently added a fourth tier to give those extra high spenders a more tailored experience, but we’d recommend only adding more than three tiers when you see a clear need for it.
How are the tiers structured?
Are the tiers based on spend, or number of loyalty points? And is it lifetime spend or annual spend? Generally, most retailers want their customers to maintain a minimum spend or number of points per year to keep their status. This requires the ability to expire tiers (you can do this in Marsello).
What are the rewards?
This Level 4 Beauty Looper (below) worked out that her free sample box had a retail value of $80. With 4 of these per year, plus an extra birthday box, that’s $400 for a year of free gifts. However, this person had to spend $3,500 to reach this tier. That’s an 11.4% discount, or about the same as giving away every 10th coffee for free.
The beauty (ha) of giving away free boxes, is that you mitigate price perception. Receiving a free box in the mail is a serious dopamine hit, and Mecca knows this. Customers perceive the value of the loyalty reward to be much higher than it really is. They will happily spend more to receive the reward than “risk” missing out on retaining their status by shopping somewhere else.
What will you call the tiers?
Don’t rush this part, take your time to really find the right fit for your brand. “Bronze, Silver, Gold” isn’t very creative. Mecca chooses names that really connect to its brand mission, product, and the relationship they have with its customers.
Mecca Beauty Loop
L1: Beauty Discoverer
$300-$599.99 spend per year
L2: Beauty Devotee
$600-$1199.99 spend per year
L3: Beauty Aficionado
$1200 - $3499.99 spend per year
L4: Beauty Connoisseur
$3500+ spend per year
Step 2. Get everything ready on your website and in-store
Now that you’ve got your loyalty program designed, you need to make sure it’s all set up properly.
Do you have an online store and physical shops?
If so, make sure your loyalty software is integrated with your POS and eCommerce platforms. This will ensure that points can be earned and redeemed easily across all your sales channels. Marsello integrates with a range of POS and eCommerce apps off-the-shelf, no expensive customization required.
How will customers find out about it?
In-store: Train staff on your loyalty program, and make sure they’re asking customers to sign up point-of-sale. Focus on the benefit to the customer—if you’ve really taken the time to build a considered loyalty program, customers won’t be able to resist.
On your website: Make sure it’s impossible to miss! Set up a loyalty widget on your online store to show visitors how they can earn and redeem rewards, and show the available tiers. Best practice is to create a website page dedicated to your loyalty program that goes into even more detail. See Mecca’s Beauty Loop page:
Step 3. Promote your program
How do I launch it?
Once you’ve designed your program, prepare a launch campaign. Whether it’s a ‘soft’ launch or a full-scale event—make sure your customers know about it. Marsello has all the marketing tools you need to communicate with your customers: email, SMS, automations, website pop-up forms, and more. Use these to craft your promotional campaigns.
- Teaser campaign: Pre-launch, let people know something’s coming. Get people curious and excited for the launch date. For example, you could run contests or giveaways to generate hype.
- Soft launch: It’s okay to do a soft launch to start off, just to test everything is working. But once you’re confident, prepare a launch campaign.
In-store promotion: Let your customers know about it in-store. Make sure staff are trained on your loyalty app and can answer basic questions about how to get set up, the tier structure, and what the benefits are for the customer.
Full marketing launch: add a pop-up to your website, send out email campaigns to your database, and promote the program on social media. You can even run a limited-time launch offer—for example, 200 extra points for signing up in the first week.
How do I keep customers engaged?
The promotion doesn’t stop after you launch the campaign! There are lots of light-touch, low-maintenance campaigns you can run to keep your loyalty program interesting. Plus, you can talk about all the cool campaigns you’re running to non-loyalty subscribers to get that FOMO going.
Here are some ideas to get you started:
- Run points campaigns: For example, you could have a double points week. These are great to run in slower sales seasons, as they incentivize loyal customers to accelerate their points growth.
- Hype the program on social media: Use social media to promote the loyalty program and engage with customers through interactive content and contests. See Mecca’s Beauty Loop hype in the Instagram post above!
- Run limited-time offers: Offer special rewards for a short period of time to incentivize customers to participate in the loyalty program.
- Build up a community: Foster a sense of community among loyalty program members through events, forums, or social media groups.
- Collaborate with partners: Partner with other brands to offer joint rewards and increase the value of the loyalty program.
- Build your mobile experience: Encourage customers to save your loyalty portal to their mobile home screen, so they can access their points balance and engage with your brand on the go.
Step 4. Set up important notifications as SMS messages
Your customers get so many emails, they’re missing important updates. An SMS will cut through the noise by going direct to their mobile. While you don’t want to overdo SMS marketing, automated texts triggered for important loyalty updates and reminders will be much appreciated.
Notify customers when they have a reward coming!
Whether it’s a discount in their inbox ready to redeem, or a gift coming to their physical address, let them know it’s on the way and when they can expect it.
Let customers know when their tier is about to expire
Like Mecca, you probably want customers to keep up a minimum annual spend. Expiring tiers is a fantastic way to keep customers spending to retain their status… but it won’t have much impact unless they know how they’re progressing! Send customers an automated text message to let them know they’ve got a bit more shopping to do to keep up their tier.
Let customers know when they hit a milestone
Your loyal customers will want to know when they’ve unlocked a new reward, or hit a big points milestone (for example, they’ve entered a new tier). Don’t leave them guessing, automatically deliver the good news right to their mobile.
Step 5. Keep optimizing!
The final step is that… there is no final step. Running a loyalty program is an ongoing, ever-evolving journey that you’re on with your customers. So it’s important to have fun and keep innovating as you go. Loyalty is a regular and ongoing business activity, just like marketing and sales. There will always be improvements and new ideas you can implement, so have a regular reminder set up to check in and evaluate how it’s going.
What are the top loyalty metrics I should be tracking?
Marsello’s dashboard keeps track of all your important loyalty metrics. Top things to track are repeat purchase rate and rewards redemption rate. These will show you that your loyalty program is moving the needle on sales and revenue, and getting good engagement from customers.
How do I know if my brand is doing better over time?
While Marsello doesn’t track brand impact, there are some incredible new tools you can use to measure your brand health. Take a look at Tracksuit, as one example.
Building a successful loyalty program like Mecca's Beauty Loop starts with understanding your brand's "why." A loyalty program is just one tool to keep customers coming back, and it should be built with a clear strategy based on your brand's vision and mission.
Mecca's founder Jo Horgan was frustrated with the department store experience and wanted to create a fun and entertaining shopping experience, which is exactly what Mecca and the Beauty Loop experience provides.
Using ordinary, off-the-shelf loyalty software like Marsello, you can create a tiered loyalty program with rewards that offer value to customers and keep them engaged. However, it's important to remember that a loyalty program is only effective if you're doing other things to support it and build a strong brand relationship with your customers.
Read more: 7 Steps To Building A Profitable Loyalty & Rewards Program