The Dos and Don’ts of Effective C-store Loyalty Programs
NATIONAL REPORT — The evolution of loyalty programs in the convenience store space has been phenomenal, moving from physical punch cards where customers could buy 10 cups of coffee and get the 11th free to interactive digital apps featuring coupons, points redemption, fuel savings, and more.
Often, the first step in converting a customer into a loyalty member in today’s retail world is getting that initial app download or sign-up. However, after that is when the real work begins, which includes not only getting them to keep the app on their phone, but also use it with more frequency — ideally spending more money than before they became a member.
“Getting the app in a customer’s phone is a very big thing, but the user only keeps a mobile app if he sees value,” said Saurabh Swarup, general manager at Liquid Barcodes Inc., a marketing technology company in Fairfax, Va. “To make customers see value in your mobile app, it’s about building lasting impressions. Every interaction you have with the consumer has to be meaningful.”
Retailers put a lot of time, attention and money into creating and revamping their loyalty programs because they want to increase the frequency of customer visits, as well as the amount of money being spent each visit. But they also benefit from the data collected through these programs, noted Vikas Mehta, head of sales and operations at Velocity Logic, a rewards platform provider based in Binghamton, N.Y.
“Loyalty programs allow them to engage with their customers, and it opens the door for communication and for understanding what the customer wants,” he noted. “Over the long term, they can learn where they need to go as a company, and what they need to do for their customers. Without this data, it’s more hoping they will come in and buy based on what you offer.”
The biggest change in loyalty during the past five years has been the ability to personalize experiences and offers. Once a customer joins a program, c-store operators can begin to collect data, such as how many times a week a person visits, if they are a gas-only customer, what they purchase when they visit, what products are purchased together in a single visit, etc.
“If a customer identifies themselves every visit through a loyalty program, you can personalize their experience and offers. If I come in five times a week and four times, I get coffee, then coffee is a driver for me and a store can personalize offers around that, as well as what other customers like me are buying,” said Jeff Hoover, a strategist for convenience store brands at Paytronix, a provider of customer engagement and loyalty solutions.
Engineering Loyalty Program Success
Whether launching a brand-new loyalty program or reimaging an existing one, here are some of the biggest pitfalls to avoid, as well as the must-haves to include:
1. DON’T Launch & Leave
A loyalty program has to be maintained and evolved, and that includes buy-in from corporate, operations and marketing to keep it going. It should be part of a “central marketing message,” according to Hoover. “Loyalty is the layer that should be involved with all your marketing communications,” he said.
2. DON’T Make It Too Complex
Simplification is key when it comes to loyalty programs because when it gets too complicated, it’s not only difficult for customers to understand and use, but it also becomes difficult for employees to explain it to customers as well. “Keep it simple and focus on the main things — taking advantage of what you do well, like coffee or foodservice. Then, you can start learning and adapting.” said Mehta.
3. DO Make It Simple to Join
If joining a loyalty program is complicated or takes a lot of time, odds are consumers won’t do it. Be sure to make it simple to sign up and start participating. “You need a simple process to get customers registered, even partially at first,” Mehta noted. “At BP, if a customer isn’t recognized at the pump, it prompts them to sign up for the program with a text to join.”
4. DO Think Outside the Box
Working with manufacturers and community partners on giveaways, promotions and non-traditional loyalty offers will keep customers interested and participating. “Build those relationships with manufacturers to get funded offers and other unique options that are not traditional c-store rewards,” advised Mehta. “You have to think about partnerships and where else you can take the program. Find other complementary brands to make what you offer more valuable, and acquire new customers.”
5. DO Get Personal
Offering coupons and promotions is an important part of a loyalty program, but when you can target those promotions to the needs and wants of a specific customer, it takes it to another level. Today’s technology can make this happen. “Consumers look for loyalty programs that offer ways to save money with personalized rewards and that make it more convenient to do business with you,” said Steven Root, director of loyalty for Pilot Co.
Creating Superfans
Pilot Co., headquartered in Knoxville, Tenn., with a network of more than 1,000 retail and fueling locations, launched a revamped loyalty program and app in April 2021 for its myRewards Plus program for drivers. The chain still offers its legacy card program, but now there is “a mobile-friendly way to earn more points, save more money and get assistance with tools like trip planning, mobile fueling, shower and parking reservations,” said Root.
The chain added a permanent tiered points program for professional drivers, so they can earn more points faster. They begin earning four points per gallon after only six fueling fills, and can redeem their points for food, drinks and supplies. The program also offers a fully customized customer experience based on the driver type, so a professional truck driver profile is different than a regular automobile driver in the app, he pointed out. They can also switch profiles as needed; for example, an RV profile if they need to find RV-friendly locations.
“Once inside the app, guests are delivered tailored features and rewards that matter to their experience and needs,” Root explained, noting that professional drivers are able to earn points with tiered rewards, earn free showers with “Shower Power,” and have access to deals on truck supplies because these rewards would be the most relevant to them.
Simply launching a loyalty program isn’t enough if the goal is to create more visits and ultimately increase the bottom line. For that, c-stores need to create superfans who continue to come back and engage — choosing their store over others again and again.
“It’s important to put the guest and their needs first in order to create a loyalty program that is easy to use with features and perks that matter,” said Root. “Retailers should take the time to understand the guest’s journey and have a clearly defined purpose with goals before launching. For Pilot, it’s important that our loyalty program is achievable, engages our guests, and delivers the greatest value to more of our guests.”