Leveraging Technology for Customer Retention : A safe strategy to increase revenue in Beauty

Updated: Jun 6, 2019

Bain & Company has stated that increasing customer retention by 5% increases profits from 25% to 95%. It is also said to be 5 to 35 times more expensive to gain a new customer than to keep a customer (Harvard Business Review ). Therefore, loyal customers are the most profitable customers.


A successful loyalty programme can be achieved through the use of technology in order to collect consumer data and know not only what customers are purchasing, but also the reasons behind these customer purchases and patterns. Beauty brands and retailers have now the power to continuously re-target customers offering an enhanced customised shopping journey. Specifically, Artificial Intelligence (AI), is what enables beauty brands and retailers to take their advocacy efforts to the next level. A study carried out to identify the top 100 retailers in personalisation abilities, ranked the beauty brand Sephora as number 1. Their loyalty programme for "Sephora beauty Insiders" which offers birthday presents, custom products and points to be redeemed in exchange of beauty products, has achieved that 80% of their customers will not purchase from a competitor.


At the end of the day, it all comes to the power of data. Consumers are willing to give companies their information in exchange of an enhanced, more customised shopping experience. Without the collection and comparison of data which shows customers' behaviours, beauty brands would not be able to re-target and offer personalised recommendations and loyalty programmes. Salesforce found out that personalised product recommendations account for 26% of a company's revenue. Yet, what beauty brands need to have in mind is that long, tedious forms demanding too much personal information can actually push consumers away, having a counter-effect and missing on a powerful opportunity to increase sales and revenue. Instead, brands and retailers should aim to make the digital experience more humane, by allowing 2 way digital conversations.


For instance, Beauty Machine Engine (BME), the 1st AI beauty specific personalisation software company in the world, provides beauty brands and retailers with the implementation of a fun, quick and appealing quiz so that beauty companies can get to know the customers' specific needs and demands in order to offer them the most suitable recommendations. The incorporation of the quiz also allows consumers to see their percentage match with each of the products displayed. BME has already made 17.8m product recommendations and has contributed to customer advocacy at a large scale by implementing its AI and machine learning driven technology in beauty websites such as My Beauty Matches, a beauty product recommendation and price comparison site.


With the increasing choice of goods available for consumers off and online, embracing and leveraging the use of technology is key for beauty brands to make the most out of data collection and be able to offer a personalised experience , which will guarantee customer loyalty and increased profit margins. It is the time for beauty retailers and brands to step up their marketing efforts to make customers feel cared for, and accomplish to build a strong loyal community, with a minimum churn rate.








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