Madison Reed, the at-home and in-salon coloring brand, is rolling out an updated loyalty and subscription program to amplify its continuous growth.
Since its inception, Madison Reed has offered an online subscription membership centered on automatic purchases at a 15% discount. It’s also offered an in-salon membership, allowing customers to get unlimited root colorings for a set fee. But now, Madison Reed has retooled the program to include loyalty rewards and new membership levels, as well as free shipping and additional product discounts. The online membership currently has about 500,000 subscribers, while the in-salon offering has 30,000 members.
The launch of the new Limitless Membership series comes after a year of growth for Madison Reed. In 2022, Madison Reed opened 30 new Hair Color Bars bringing its total to 84 locations. It also raised $33 million in venture funding from Sandbridge Capital and Marcy Ventures, and cemented its omnichannel footprint by expanding at Ulta and Ulta Beauty at Target. Amy Errett, CEO of Madison Reed, said the timing of the new membership and loyalty offerings is tied to the national presence the brand now has. She added that approximately 20% of Madison Reed customers color their hair both at home and in the salon.
Madison Reed made a concerted effort in 2022 to become a full-fledged omnichannel brand, as other brands were leaning back into the strengths of retail. Notable DTC brands Glossier and Beautycounter have since expanded to Sephora and Ulta Beauty, respectively. DTC sales account for 60% of Madison Reed’s revenue, while Hair Color Bars are 30%, and 10% is wholesale retail. By 2024, Color Bars will account for 50% of sales, Errett said, adding that the loyalty programs are a massive business driver for Color Bars. She declined to comment on exact revenue but said revenue has grown 20% year-over-year.
“We will continue to fine-tune these memberships to meet the needs of our customers. We think we’ve gotten it pretty right; membership and loyalty have become a big focus of our business,” she said. “We aspire to end the year with 70% of our customers being members.”
Aside from the loyalty program, Madison Reed will continue its growth in multiple ways. It will expand to almost 95 Color Bar locations in 2023 and approximately 115 by 2024, plus it will focus on international expansion. It will also add more undisclosed retail partners and product launches this year.
Madison Reed now offers four options under its Limitless Membership program for customers who color at home or in a Madison Reed Hair Color Bar. For at-home use, there is a baseline free offering called Limitless Premier, where members earn 15% off every Color Kit on auto-delivery and $10 off in rewards for every $200 spent, plus receive welcome and birthday gifts. There is also a Limitless Plus offer for an annual payment of $42. It provides 15% off every Color Kit, $10 off in rewards for every $150 spent, a birthday gift, free shipping on every order, 10% off all products and services, and either one free roots service a year at a Hair Color Bar or one free full-size product.
The in-salon offer includes Limitless Pro, which starts at $42 every four weeks. Members receive one roots service every six weeks, $10 off for every $300 spent, 10% off all services and products, welcome and birthday gifts, early access to new products, and flexibility to use membership at any Hair Color Bar. And lastly, the Limitless Pro+ in-salon tier starts at $70 every four weeks. Members can access unlimited roots services to color their roots as often as they’d like, plus receive $10 in rewards for every $300 spent, 20% off all services, 10% off all products, welcome and birthday gifts, early access to new products, and flexibility to use the membership at any Hair Color Bar. They can also choose to have at-home color delivered when they can’t make it in monthly.
The rejiggered loyalty and membership programs arrive as the purpose and format of such programs are rapidly changing across the beauty and fashion industries. What was once seen as a customer retention tool is also now a data-collection asset for brands trying to hone in on zero-party or first-party data from customers. Sometimes, it can also juice sales, such as the loyalty program offered by fashion retailer Francesca’s — according to the retailer, its loyalty members shop 12 times a year, and their average order values are 40% higher than non-members. According to loyalty SaaS company Antavo, 56% of companies in 2023 view customer loyalty as essential to overcome the inflation crisis and a potential recession. And another, 79% of respondents with an existing loyalty program are likely to revamp their loyalty program in the next three years. This is a 7% increase over 2022.
“[Our survey] results indicate that loyalty programs can easily generate revenue for companies, but they must be executed well. In other words, organizations should spend their time, human capital and budget wisely,” said Tomas Oszi, senior loyalty program specialist at Antavo.
Madison Reed’s core customer demo is women 35 years old and up with household incomes of $100,000 or more. And 40% of Color Bar appointments are within a two-day booking period or are walk-ins, underscoring the last-minute business of Madison Reed clients.
“We want to access busy, primarily professionals and mothers, where time and convenience plus [clean] ingredients are important,” said Errett. “This woman has had two challenges to date that we’re solving. She’s short on time, and she wants access whenever she wants to get it. We’re stealing major market share from the salon-lover category, which is a person who likes to go and sit in a chair for three hours. I don’t know many of those anymore.”