Ulta Beauty's chief executive has put a firm line under the company's loyalty strategy: the program exists to build relationships, not to hand out discounts. That's the verdict from the CEO, as reported by CX Dive, and it's a line marketing leaders have heard before — though rarely this bluntly from a retailer whose loyalty mechanics span millions of shoppers.

The distinction matters. Discount-led loyalty programs train customers to wait for the markdown. Relationship-led programs, at least in theory, train them to come back regardless of the price tag. Ulta's chief executive has clearly picked a side in that argument, framing the program as a long-term customer-bonding instrument rather than a promotional lever.

What does the CEO's framing change?

For a retailer of Ulta's scale, the loyalty program is not a side project. It's the connective tissue between store visits, app sessions, and the beauty-services appointments that differentiate the chain from pure e-commerce rivals. When the CEO says the program is about relationships, the implication for CMOs is straightforward: measure it like a relationship asset, not like a coupon budget.

That shift in framing typically moves the scoreboard. Retention, repeat-purchase frequency, and share of wallet become the headline metrics. Discount redemption rates quietly step down to footnote status. It also changes who owns the program inside the org chart — a relationship instrument belongs closer to CRM and lifecycle marketing than to trade promotion.

Why 'relationships over discounts' is having a moment

The beauty category is crowded, and price competition from Amazon, Sephora, and drugstore chains is relentless. In that environment, a loyalty program built on discounts becomes a margin-erosion machine with a member card attached. Ulta's chief executive is essentially arguing that the company would rather own the customer than rent her with a coupon.

There's a self-interested logic here. Beauty customers are habitual, high-frequency buyers who respond well to personalization, tiers, and experiential perks — services, early access, product education. None of those cost the same as a straight percentage off, and several of them actually deepen the relationship the CEO says the program is for.

What should marketing leaders take from it?

A few read-throughs for CMOs watching Ulta's approach:

• Reframe the KPI set. If leadership calls the program a relationship tool, the reporting should lead with retention and frequency, not redemption rates.
• Audit the discount dependency. A program that can't hold members without price incentives is a promotions budget wearing a loyalty costume.
• Check the emotional inventory. Relationships run on recognition, relevance, and experience. If the program's offers are 100% transactional, the relationship claim doesn't survive contact with the member inbox.

The verdict

Ulta's chief executive has said the quiet part out loud. Loyalty programs that compete on discounts alone end up competing with everyone's discounts. Programs that compete on relationships compete on something harder to copy — and, conveniently, cheaper to fund.

Whether the retailer's execution matches the rhetoric is a separate question, and one its quarterly numbers will answer in due course. But as a strategic statement, it's the correct one. Discounts buy a purchase. Relationships buy the next ten.