Small Operators Can Employ Big Ideas to Gain Customer Loyalty

NATIONAL REPORT — A customer is the most important asset to any retailer. However, the goal is to attain that customer’s loyalty, not just that customer’s transaction.

Sizeable marketing budgets have enabled big retail chains to run fast and furious with customer loyalty programs, but does that mean small operators and independents don’t have a chance to keep up in the race?

Not at all, according to several experts who shared with Convenience Store News their best loyalty program ideas geared for smaller operators in the c-store realm.

Here are their suggested tactics and best practices:

Quick & Easy Does It

Phan Meduri, director of product management for Riversand, a data sciences research firm and data management solution provider, suggests that small operators follow the key tenets of the top-ranked 2018 loyalty programs (as named by Bond Insights). They include Speedway’s Speedy Rewards, Amazon Prime and the Kroger Fuel Program.

What these program have in common, Meduri explained, is that they focus on ease of use and quick rewards, namely:

• An easy registration process —  they give a pre-generated loyalty number vs. a user-initiated registration process;
• Transaction accumulation toward a reward — for example, a digitized punch card/free coffee for every 10 coffees purchased; and
• The ability for customers to unlock rewards in quicker intervals.

“Providing reward redemption at shorter transaction limits helps in quicker acceptance of the program,” Meduri said. “Smaller retailers must also communicate frequently on deals and promotions exclusive to members.”

Narrow It Down

Small retailers should choose just one of the key loyalty tenets — recency, frequency or monetary — to design their loyalty program upon, according to Jenn McMillen, CEO of Incendio, a consulting firm that builds (and fixes) loyalty programs, including the architecture behind GameStop’s PowerUp Rewards program.

“Everyone wants everything, but a good program should be focused around one of the tenets to start,” McMillen told CSNews. “Do you want one more visit? One more incremental purchase? More visits in a shorter timeframe? Each of those things is a great goal, but best practices dictate that you choose one to start.”

Keep It Real

Roi Kliper, CEO of City Hive, an e-commerce and data platform for the wine and spirits industry, believes the most important aspect of a small retailer’s loyalty plan is to be fair and honest. Kliper has a PhD in computational neuroscience.

“Your customers will see a fake loyalty plan from a mile away. If you are trying to pretend to give something, don’t,” he said. “Customers are smart. But that doesn’t mean a loyalty plan has to boil down to discounts or eroding margins.”

Good businesses know to reward their loyal clients with a personal touch, a better service level, and early or exclusive access to unique offers or events, said Kliper.

“The most successful ones manage to use their loyalty plan to build a community where members feel connected,” he added.

Some other loyalty tips from Kliper include:

• Clubs are better to offer than subscriptions.
• Cash is better than points.
• Bother to know your customers.
• Do not sell them a quantity discount, but rather a unique relationship. “Punch cards are so 1980s — even the digital ones,” he remarked.
• Figure out what makes you unique and make that available for your customers at better conditions.
• Measure the effect on your business.
• Iterate — repeat these steps over and over again.

Click below to download our full report, “Big Ideas Around Loyalty for Small Operators.”