In Cosmetics, Manufacturer Rebate Program

Manufacturers of beauty products and cosmetics face many challenges regarding marketing products as they are often considered restricted consumer good.

Finding solutions for such challenges can be extremely costly and time-consuming. A lot of product development and labeling tasks will require the support of legal experts to ensure that all products are fully compliant with regulations.

But once you have a new product that is fully compliant, one of the best ways to get it in front of a much bigger audience is through cosmetic rewards programs.

And that’s where Incentive Insights can help you gain maximum ROI from your marketing incentive programs.

Common Marketing Challenges In The Beauty And Cosmetic Industry

Here are some of the most common challenges you can expect to face when marketing beauty products.

  1. Highly Competitive Market

    The cosmetic industry is one of the most competitive industries globally, and there has been a boom of new beauty products on the market in the past ten years.

    E-commerce has also thrived during this time, which means that manufacturers no longer only have to compete with local companies but also with global ones.

    With so many brands of cosmetics available, customers having access to global online marketplaces, and online retailers such as Amazon offering competitive prices, cosmetic prices are dropping, making it more difficult for companies to offer unique product lines.

  2. Diverse Sales Channels

    Cosmetic brands are no longer only sold in drug stores. They are also available in pharmacies, brick-and-mortar stores, online stores such as e-commerce sites, TV shopping channels, social media selling, and they are marketable through Influencers.

    But to be successful, a company must sell its products through as many of these channels as possible. Such diversification can provide a tremendous boost to the company’s brand image, leading to a rise in sales with a growing customer base.

    Diversifying sales channels will also ensure that you reach new audiences of potential customers, as your products will be available to them in various outlets.

  3. Constantly Changing Prices

    Consumers only expect to pay the average manufacturer price for their cosmetic products after being offered discount coupons, codes, or loyalty programs, which makes it difficult for producers to keep up with constantly changing prices.

    A rebate program can give you a lot more control and insight into how customers respond to different offers. You can set up different percentage rebates depending on how much consumers spend on qualifying products.

    With such a tiered approach to rebate incentives, you can ultimately find out which combinations deliver the best results for your marketing budget.

    And as the program also collects customer data, this will help you know your customer’s price expectations along with purchasing habits.

  4. Breaking Customer Loyalty

    Finding a solution to avoid breaking customer loyalty is a challenge that all companies face. But, according to research, the cosmetic industry has a lower loyalty rate than any other retail branch world-wide.

    This is partly due to the abundant choice of cosmetic products available on the market these days. And as there is a wide choice of channels for customers to select from, they are more likely to shop around before making a purchase.

    Building strong customer loyalty could be an issue. But, if you want to retain your customers, a rebate program is the best solution.

  5. Customer Acquisition Costs

    Due to the diverse sales channels available, manufacturers’ product lines must be competitive with other cosmetic brands in order to succeed. And this is especially important regarding online sales of cosmetic items.

    Consequently, the omni-channel strategy of marketing cosmetic items impacts the cost of customer acquisition.
    Costs increase because companies must carefully work out their sales strategy.

    Additionally, the competition in using the same keywords to attract customers’ attention in e-marketing is immense, and companies are often forced to compete in price wars.

  6. Limited Purchase Volumes

    With so many online stores offering beauty aid products, customers generally tend to shop around rather than purchase everything from one particular store, whether or not the company has a wide product range.

    The negative aspect is that consumers spend less in individual stores. And this results in low customer lifetime value.

    But rebate programs can help increase a company’s sales volume per customer by collecting and utilizing customer data that will help in understanding and reacting to customer behavior.

Plan Your Rebate Program

The success of a marketing plan depends on the type of rebate program implemented. Incentive insights offers support for the following rebate programs that can be customized to a company’s needs.

Mail-In Consumer Rebates

Companies offering mail-in rebates for their product lines must include a rebate form in or on the packaging. Consumers are only eligible for reimbursement after filling in the form and returning it to the company together with proof of purchase.

This type of rebate allows companies to promote their beauty products effectively and provides an incentive for customers to purchase multiple products.

It’s also an excellent way of collecting customer details which can be stored in a database for future use.

This is especially beneficial for companies when introducing new products onto the market and learning about how the market reacts.

Want to learn more about instant rebates vs mail-in rebates? Check out our blog.

In-Store Rebates

Beauty product companies are often unwilling to reduce the price of their product. But by providing in-store rebates, they can offer customers temporary discounts, which is one way of trying to increase sales and brand awareness.

Such instant rebates might seem simpler to manage but they don’t deliver the same results as rebate programs.

Firstly, all customers buying the product will instantly get a discount, rather than your marketing efforts specifically targeting those who are not willing to pay the full price.

Secondly, you won’t be able to gather any data on the customers and their purchasing habits to further fine tune your marketing efforts in the future.

Retail Sales Rebates

The most effective way for producers to persuade retailers to promote their cosmetics is by offering retail sales rebates.

The incentive is generally based on discounts associated with sales targets. And that financial incentive encourages retailers to place the products in more visible and high-traffic locations as well as actively promote them through recommendations.

The end result is exposure to a wider audience for better brand recognition and increased sales.

Let Us Help You Create A More Efficient Rebate Process

Let Incentive Insights help you execute a more efficient rebate process for your beauty products that will ensure a highly successful marketing campaign.

Our customized rebate processing service deals with customer data collection, handling rebate data, issuing rebate payments, and discovering innovative rebate solutions that help increase sales and encourage brand loyalty.

Don’t hesitate to contact us to find out more about how our innovative techniques can help your company become more competitive and customer-friendly in your rebate marketing process.

To learn more about the benefit of rebate marketing, connect with our team, we are happy to be of assistance.

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