Customer Engagement, Loyalty Are Key Themes of NACS Leadership Forum

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Customer Engagement, Loyalty Are Key Themes of NACS Leadership Forum

By Don Longo, Convenience Store News - 02/24/2012

MIAMI BEACH, Fla. -- On a day in which digital marketing was the prime topic of discussion, convenience store retailers at the 2012 NACS Leadership Forum explored how to effectively engage consumers and build customer loyalty in the new mobile-dominated media world.

Leadoff speaker Paul Ollinger, CEO of The Absolutely Huge Co. and a former Facebook executive, posed the issue as one between old media vs. new media. "Old media is like bowling where you take a ball, aim it and try to hit as many of your target customers as possible, while new media is more like a pinball machine where consumers take your message, help define the direction it goes, add to it, diminish it and keep it going on and on and on," he said.

Discussions revolved around the major social media players, including Foursquare, Twitter, Facebook and Google+, as well as social couponing sites such as Groupon, Living Social, Gilt City and Google Offers; city guides like Yelp and Patch; mobile loyalty programs like Shop Kick and Shop Savvy; fuel applications (apps) such as Fuel Finders and Gas Buddy; and mobile payments such as Google Wallet and PayPal.

Ollinger showed how the leading online marketers make their messages local and bring the identification to the store level.

Meanwhile, Tristan Walker, who is responsible for business development for Foursquare, illustrated the power of geographic targeting and how Foursquare appeals to the human nature of collecting things, such as award badges.

Kimberly Gnatt, director of My Coke Rewards for Coca-Cola Refreshments, emphasized the importance of integrating a promotion across many different platforms, and taking it down to a specific customer level -- for instance, the way its Coca-Cola Freestyle fountain machine collects data on individual customer preferences. "Define your community, understand what you want out of mobile communication and stay away from just doing the next big shiny thing," Gnatt noted.

Jeff Lenard, vice president of industry advocacy for NACS, presented research on how consumers view convenience stores, and gas retailers in particular. Asked what one word would describe the "perfect" convenience store, consumers most often said: easy, cheap or convenient. But when asked to describe the "reality" of convenience stores, the words most often used were: convenient, convenience and expensive.

This disconnect grew even wider when consumers were asked to describe their impression of food at c-stores, as they said: expensive, junk, unhealthy and convenient. Then, when asked their thoughts about "gas retailers," the words that came up most often were greedy, expensive and rip-off.

Grant Heminger, vice president of marketing for Speedway LLC, discussed the Enon, Ohio-based retailer's Speedy Rewards loyalty program, which launched in 2004 and now has roughly 3.5 million active members. The goals of the program have been to capture consumer data in order to make relevant offers to members, increase retention and capture a greater share of the c-store shopping trips from existing customers.

As a result of the program, Heminger said Speedway has seen year-over-year growth from members at a much greater rate than from non-members. "More customers are coming into the store and buying merchandise at a much higher rate than the industry average," he added.

Speedway rolled out a new grocery fuel discount partnership a year ago that allows customers to earn fuel discounts for buying groceries at a select group of various partners. "Members get to double-dip and get rewards from both programs," said Heminger, who also noted that the retailer ensures it is careful to partner with retailers that will not cannibalize Speedway's in-store sales.

Greg Parker, president and CEO of Savannah, Ga.-based Parker's Convenience Stores, discussed his company's less-than-a-year-old PumpPal customer loyalty club, which launched in March 2011. The loyalty program, which uses an ACH (automated clearing house) payment method to avoid the high debit card transaction fees charged by the major credit card companies, has been a tremendous success, according to Parker.

"We currently have more than 44,000 members who have saved more than $1.3 million since the program's inception. That's real savings during tough economic times," he noted. The card offers members up to 10 cents off per gallon of gas, essentially giving profit to consumers out of dollars that would normally go to MasterCard and Visa in debit card fees.

Matt Drinkwater, vice president of East Coast sales for Groupon, offered examples of how retailers such as Jewel-Osco have benefitted from using Groupon's social media couponing to boost sales and, more importantly, brand perception.

Michael Newman, president of NOCO Energy Corp., a c-store chain based in Tonawanda, N.Y., noted that the return on investment from his company's mobile marketing are not always quantitative, but "you must do it or you'll be left on the outside looking in."

The day's final speaker, Brad Call, general counsel and executive vice president of Maverik Inc., gave a presentation on how social media marketing fits into Maverik's customer segmentation strategy. Maverik separates its customers into seven segments: The Adventurer, Blue Collar, Emerging Adults, Health/Fitness, Hispanics, Women With Children, and White Collar. Each segment requires a separate marketing strategy, Call explained.

For example, tech-oriented Emerging Adults are engaged with viral subculture video via "Maverik Mayhem" -- special monthly videos created each month and posted on YouTube. Meanwhile, The Adventurer is engaged by Maverik's sponsorship of high-energy outdoor events, and Hispanics, a rapidly growing segment that accounts for 18 percent to 50 percent of the retailer's customer base depending on location, are reached through Maverik's purchase of a radio station that it converted to a 100-percent Hispanic station. The station has become No. 1 in the market in just a year.

The 2012 NACS Leadership Forum concludes today.