Thank You for Shopping: Customer Loyalty Programs

Autumn Whitefield-Madrano:

Yesterday, I was informed that I’d “unlocked” the “VIB Level” of Sephora’s customer reward program. What this means in Sephoraspeak is that by “earning” 350 “points” at the store, I will receive seasonal VIB-only gifts—presumably along the lines of the free lip gloss I received whilst shopping during my birthday month, back when I was merely a Sephora “Beauty Insider”—that I will have advance access to sales, and that I get “dibs” on new products, so that I will be the first lady on the block to have NARS’s newest nail polish in Quivering Otter, or whatever the color of the season is.
 What this means in you-and-me-speak is that I have spent more than $350 at Sephora—not, as the company would put it, “earned” more than 350 “points” at Sephora—since this time last year.
 It was a shock to realize that I’d spent $350 at Sephora in the past 12 months, to be sure, but my financial navel-gazing is another post altogether. What “unlocking” this “VIB Level” made me think about was customer reward programs, and what we’re supposed to get out of them. With many customer loyalty programs, you actually save money. You might do this immediately/directly, as in my drugstore’s practice of advertising “specials” that are only “specials” if you are literally a card-carrying member of the drugstore’s loyalty program, or it might be savings down the line, as with frequent-flier miles. But the point is: You save money, as in cash, as in you have a compelling financial interest to use the loyalty program (which, of course, means that to some degree you’re loyal to the vendor, though of course consumers can belong to multiple loyalty programs, making them not loyal at all).