How to Create a Strong Customer Loyalty Program

LAS VEGAS -- Beginning a customer loyalty program can seem like a daunting task. But with proper preparation, convenience store retailers -- both large and small -- can be successful implementing such a program, panelists noted during today's NACS Show workshop entitled "Best Practices in Fuel Loyalty Programs."

Before creating a loyalty program, retailers must first make sure it is properly aligned with their business strategy, cautioned Drew Graham, manager of loyalty and customer service at Pilot Travel Centers LLC. A successful program, such as Pilot's MyRewards program, also requires extensive legwork to understand customers; a consideration of how to differentiate from the competition; and it must have an element that will get customers engaged, he said.

"It's simple," Graham said. "It's about customers coming back to your store."

In addition, the Pilot Flying J manager noted that a solid technological infrastructure must be in place, and retailers can't offer promises they cannot keep. "You have to do something you can deliver on," he said.

Fellow panelist Kevin Thomson, manager of strategic partnerships for Speedway LLC, agreed that a solid technological system to support the loyalty program is a must and requires an ongoing expense.

Although large c-store chains can afford such an expense, smaller retailers perhaps cannot. But that doesn't mean independent c-stores should shy away from loyalty programs. Thomson recommended smaller c-store chains look to partner with other retailers such as grocery stores.

"I never thought we would partner with grocers [because] they are building c-stores in their parking lots," said Thomson, referring to Speedway's Speedy Rewards program. "But it has worked."

Finding the right partner for a loyalty program can be another daunting challenge for retailers, however. Thomson said when determining whom to partner with, Speedway first looks at that retailer's image and vision.

"What does their customers think about them?" he said. "And we also think about if this is a company we can grow together with."

Not all aspects of loyalty program are difficult, though. Thomson noted that simple things can help advance a loyalty program, such as online tools and kiosks where customers can check and redeem their rewards points.

Such systems also allow for invaluable feedback. "People told us things we didn't want to hear," Thomson said of the feedback. "But it made us better."

Renee Andrew-Lewis, loyalty consultant for KickBack LLC, dba KickBack Rewards Systems, explained that most loyalty program success can be attributed to a retailer focusing on what they do best and encouraging cashiers to promote the loyalty program every time a customer checks out.

"For example, we started working with a small retailer this year who had a great fountain program and we focused on that," relayed Andrew-Lewis. "The one thing retailers can't offer is a 'me-too' program."

Looking ahead, Graham said loyalty programs are simply about providing customer service. "It's about [making] incremental progress," he said. "There are no 'home runs' out there. There only a lot of 'singles.' But that adds up to the point where you won't believe how far you've come [in the loyalty program]."