Case Synopsis, Uses, Discussion Questions, and Answers
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CASE 19- Sephora Loyalty Programs: A Comparison Between France and
the U.S.
Synopsis: Sephora is a beauty products retail chain founded in France by Dominique Mandonnaud
luxury goods group. Sephora has a strong presence in several countries around the
Discussion Questions :
1. Identify the benefits for a company to implement a loyalty program
– Develop repeat purchase behavior
2. What are the design characteristics of an effective loyalty program?
– Identify each customer and provide rewards for their purchases
– Use a tiered program. Not all customers have the same value for a company, therefore
rewards should be tiered according to the volume of purchase.
3. ?
Not all clients have the same value. In general, 20 percent of the customers account for 80 percent
Case Synopsis, Uses, Discussion Questions, and Answers
4. countries. What
are the main differences? Which loyalty program is most effective at developing customer
loyalty? Why?
US loyalty program French loyalty program
Common to all programs: $1 spent = 1 point Common to all programs:
Rewards Beauty Insider Program:
Rewards White card:
Premium program
V.I.B: minimum of $350 spent a year
Rewards in addition to the regular program:
Premium program
Gold card:
Rewards in addition to the Black card benefits:
The main differences are:
– Discount: in the French program, there is a mix of discount and rewards; whereas
the American program only offers rewards. Discounts are used to tease consumers at the
beginning of the relationship. This entry-level relationship, which is based on a lower price
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– A different tiered program: American program is a two-tiered program and French
program is a three-tiered program. Adding one level might allow having customer segments
that represent different values for Sephora in order to differentiate marketing activities. The
three-level program echoes the customer pyramid developed by Zeithaml et al. (2001).
– Customer service: the French program offers a large number of services including
5. h and American premium programs worth what they
spend to reward customers? Why do both programs have a limited time validity and
a specific requirement regarding the amount spent per year?
French premium program:
The costs include: (1) the costs of rewards; (2) the cost of shipping; (3) the costs of
(6) the costs of additional gifts and private sales.
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6. Could the premium loyalty program implemented in France be adapted to the
U.S. market? Explain.
Since there is no information in the text, further information needs to be sought. Data about
the beauty market in both France and the U.S. are available on Datamonitor, on the websites
of the French National Institute of Statistics and Economic Studies, and the website of the
U.S. Census Bureau.