period and engage with its podcasts and other unique content are more likely to place value on experiences and VIP access, while less frequent customers that have a more transactional relationship with the business want monetary benefits, such as discounts and free delivery.  “Our customers have told us they are looking for something unique and personalised for them, so Adore Society is all about being rewarded for being you,” Miranda Bliss, loyalty and retention manager at Adore Beauty, said.  Customers will be automatically placed into one of three tiers upon signing up to the program, which launches in Australia and New Zealand on Monday, March 29. Those in level one will receive $10 off a purchase of $100; those in level two will receive $20 off a $120 purchase; and those in level three will receive $30 off a $140 purchase.  According to the retailer’s first half-year earnings report since listing on the Australian Securities Exchange last October, Adore Beauty had over 777,000 active customers in the six months to December 31, 2020.  This was 82 per cent up on the prior corresponding period, reflecting the overall rise in online shopping during Covid-19 and the self-care boom that saw an uptick in sales of sheet masks and other skincare products. Adore Beauty CEO Tennealle O’Shannessy said at the time that the business was “thrilled to welcome many new customers to our platform over the last six months” and “pleased to continue to be the online beauty shopping destination for our loyal customers”.  ‘You are just giving margin away’ The reason for launching a loyalty program is clear. Studies show it’s far more costly to acquire new customers than to keep existing ones. So why doesn’t every retailer have a loyalty program? And why do some, like Adore Beauty, wait 20 years before launching one? “Loyalty is a complex subject and needs to be thought through strategically,” Mark Baartse, an independent consultant and the former chief marketing officer at online women’s fashion brand, Showpo, told Inside Retail. “Research shows many loyalty programs are ignored by casual buyers and only used by already loyal customers, so you are just giving margin away. The challenge with setting up a loyalty program is making sure you don’t fall into that trap.” Baartse said he often prompts the retailers he works with to ask themselves how many loyalty programs they are active members of.  “The usual response is ‘just my local cafe’,” he said.  According to Baartse, the key to a successful loyalty program is having a strong value proposition. Amazon Prime, for instance, not only offers discounts and free delivery, but also video streaming through its Prime Video service.  “They have […] added so much value to their program that it’s bound to be a success.” While few retailers have managed to replicate the success of Amazon Prime, the need to continue experimenting in this space is clear.  According to a 2019 KPMG survey of 18,520 consumers from more than 20 countries, 96 per cent of millennials say companies should find new ways to reward loyal customers, and 78 per cent would switch to a company that offered a better program.  “I’ve seen some companies set up ‘surprise and delight’ type loyalty programs, where customers are sent unexpected bonuses to build a positive experience,” Baartse said.  And even if the economics don’t necessarily stack up, it could still be worth doing. “One benefit of a loyalty program is simply that it puts the company focus on loyalty, which can be neglected by many companies,” he said.