Five Keys to Driving Membership in Advanced Loyalty Programs

For consumers, it’s never been more “all about me.” Shoppers’ expectations for a personalized experience that delivers rewards they truly value have been driven even higher as more commerce activities moved online during the pandemic. Savvy convenience stores are answering this demand with advanced loyalty programs, taking cues from more mature offerings in retail and services to enhance their young programs with everything from personalized offers and incentives to membership tiers. Advanced loyalty programs create a virtuous cycle through which consumers share data, get rewarded, and come back for more. Convenience stores can use that accumulating data to create ever-more-refined offers that in turn drive more revenue and loyalty. But for all of that to happen, advanced loyalty programs need members. Planning for membership recruitment is a key part of any well-rounded loyalty program, and is inexorably tied to the program itself. Better programs attract and retain more members. “An advanced loyalty program, in our view, is one that takes the necessary steps to deliver a wonderful experience along with the offering. And then, the offering has to be customer-specific, and it has to be as frictionless as technologically possible,” said Gus Olympidis, president and CEO of Family Express Corp., a c-store chain based in Valparaiso, Ind. The Ingredients to Enrollment Success To build programs that attract enrollment, experts say convenience stores should make sure these five factors are in place: 1. A Clear Value Proposition With their low transaction values and focus on speed, convenience store operators face challenges in getting busy customers to stop and consider signing up. A clear value proposition piques consumer interest, so it’s important to focus not on rewards and incentives that are easy for the operator to offer, but on what shoppers really value. Katie Thomas, lead of consulting firm Kearney’s Consumer Institute, suggests starting with traditional, widely popular rewards such as fuel discounts or free items, or perhaps a newer service such as free delivery. Consumers should become eligible for these rewards quickly to reinforce the value. “Advanced loyalty programs are the ones that have a good understanding of what consumers want and what they’re already doing,” she said. 2. Easy-to-Understand Messaging Focusing on that clear value proposition is key in developing marketing materials that will quickly catch a shopper’s attention. “The biggest message is to keep it simple and make the consumer feel it’s prudent to at least belong to the program,” said Dan McKone, senior partner at LEK Consulting. Operators must walk a fine line in hinting at the richness of their more advanced programs while keeping initial messaging clear and succinct. Too much complexity is a turn-off, but some find success by indicating that the consumer will be in control of their own membership experience. According to Accenture, the factors most likely to entice shoppers to share personal data — an essential part of the sign-up process — are discounts or coupons (cited by 78 percent), loyalty card points (52 percent), and highly relevant promotions (47 percent). Family Express’ pioneering loyalty program, for example, includes membership tiers, a fact the retailer touts in recruitment. “I think it’s a very important part of driving membership,” said Olympidis. “In our case, there is a significant tier advantage to facilitate registration, which would allow you an entirely different array of offers and freebies or deals, because we obviously need to know who you are in order for us to be able to engage with you effectively.” 3. Many Ways to Enroll KPMG, a global organization of independent professional services firms, found that 69 percent of millennials feel loyalty programs are too hard to join or earn rewards. A fast, frictionless enrollment experience is critical to overcome resistance to making that effort. Experts suggest offering a wide range of sign-up vehicles so that the consumer can use whichever one they find most convenient. Make sure the software and devices facilitating sign-up are fast and frictionless through thorough testing. Options include NFC, text, QR codes, app downloads, browser-based enrollment, and more. Customers at Jimmy John’s Gourmet Sandwiches, for example, can instantly enroll in its Freaky Fast loyalty program by tapping their NFC-equipped phones on the payment terminal; the solution instantly grabs their information from Apple Pay or Google Pay. Such contactless options resonate in this era of heightened concerns about safety and hygiene. Retailers should resist the urge to collect a lot of data at enrollment, LEK’s Malone advises, because this slows sign-ups and can cause shoppers to aban-don the effort. Plan instead to collect more data incrementally as time goes on to minimize friction. 4. Easy-to-Explain Value Cashiers can be a convenience store operator’s most effective loyalty program sales tool. But transactions are short, and turnover in that position is high. So, the same concise, clear messaging used in other materials can help cashiers quickly explain the program as they complete the sale. Interestingly, cashiers are another reason the enrollment technology must work seamlessly. “The technology at the point of sale has to be super quick and be flawless in terms of the guest’s and the cashier experience,” said Michelle Tempesta, head of product and marketing at Paytronix, a provider of customer engagement solutions and loyalty programs. “If it’s clunky and the cashier has trouble with it, they’ll stop asking customers if they’re a member of the program.” 5. Widespread, Effective Communication Like enrollment vehicles, marketing to promote membership must also be widespread and varied. As with every other aspect of driving enrollment, the message itself must be brief and clearly communicated. A/B testing can help identify the creatives that are most effective. “You’ve got to constantly talk about your program like it’s new,” said Casey’s Sebastian. “We’re 13 months in and I’m treating it every month as if we just launched it.” Casey’s promotes its program via TV and radio spots, digital media, display, video, organic, social, paid, and via in-store media and cashiers. And loyalty program marketing doesn’t have to be limited to the convenience store’s own assets. Other options include the marketing vehicles of program partners, such as CPG companies or fuel companies. Great Recruitment Pays It’s no surprise that convenience stores are racing to catch up to other industries and consumer expectations when it comes to loyalty programs. According to Harvard Business Review, loyalty leaders — companies at the top of their industries in Net Promoter Scores or satisfaction rankings for three or more years — grow revenues roughly 2.5 times as fast as their industry peers and deliver two to five times the shareholder returns over the next 10 years. To get there, c-store operators are under pressure not only to design compelling programs that deliver real value, but also to attract enough membership to make those programs work their magic on the bottom line. Building a well-subscribed-to program starts with the value proposition. “It’s taking a step back and having honest conversations about who your consumers are, why they’re using you, and why they should be loyal to you,” said Kearney’s Thompson.

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