A Small Operator's Checklist for Cracking the Loyalty Code

NATIONAL REPORT — It's an age-old marketing question: How can small operators get more customers into their convenience stores, get them to spend more money while there, and keep them coming back while competing against larger chains with more marketing resources?

According to industry experts, the first step is determining exactly what they're up against. "Larger convenience chains have more resources — not only money to spend on marketing, but also the internal staff needed to execute large-scale programs, track and optimize performance, and build one-on-one relationships with consumer packaged goods (CPG) brands," noted Jake Bolling, CEO of Skupos, a data analytics provider that primarily focuses on independent and small retail chains.

It is also easier for large chains to stay price competitive through economies of scale via access to brand-funded programs and promotions, according to Bolling.

Once a small operator has determined what they are up against in their specific market, it is time to devise a game plan. Carl Orsbourn, a former executive with ampm and author of "Delivering the Digital Restaurant," stressed that retailers must be confident they can deliver on whatever commitment they are making to their customers.

"Speed, accuracy and timeliness are a retailer's three biggest challenges," he told Convenience Store News. "For all the technology that is out there, if you cannot deliver on these [three things], you are always going to create a poorer customer service experience."

The Small Operator's Checklist

The way Bolling sees it, three things should be on every small operator's checklist as they develop and begin to implement their marketing game plan:

• Check the data often
• Start small
• Find a partner

Lori Stout, vice president of marketing at Silicon Valley, Calif.-based Punchh, which helps convenience stores enhance their in-store and digital customer experience by centralizing data and creating one-on-one connections across all touchpoints, recommends smaller operators build up their "tech stack" to support future innovations. Begin by selecting partners that have integrations that support a retailer's business model and will allow them to expand their offerings as they grow.

"This would include ensuring the partner can support curbside service, a mobile platform, contactless payments, a subscription program, and more down the road," said Stout. "Frictionless solutions are about improving the customer experience and adding another layer of insight as to what the customer is doing in the store and in what order, so the operator can later adjust its portfolio and positioning of SKUs within the limited space."

When trying to acquire new customers, treat them as omnichannel customers, Orsbourn advises. These days, consumers interact with retailers beyond just the in-store experience, so retailers must have a presence where the customer is.

"If you are a young, hip retailer, having a presence on TikTok or Instagram makes sense. If your customer base is more 50-plus [year-olds], having an active Facebook page makes more sense," he explained. "[Either way], you need to have a social media presence, so your customer base can interact with you."

In terms of retaining customers and ultimately getting them to spend more money, Orsbourn said lack of feedback is a problem, as it makes it much harder to improve on a marketing plan. He pointed to solutions such as Tattle and Ovation, which are two companies that put QR codes on the bottom of receipts, carryout bags or leaflets on the front door of a store.

Loyalty in Focus

One of the main methods large c-store chains use to retain customers is a loyalty program. According to Punchh, 43 percent of c-store shoppers choose a specific convenience retailer because of its loyalty program and more than 70 percent of shoppers increase visits to that retailer if they are members of a given loyalty program.

Stout's No. 1 piece of advice for smaller operators is to add a loyalty program because it will allow them to invest in their customers and get to know them on a one-on-one basis. Loyalty programs also enable small operators to invest in things like inventory control, supply chain solutions, and tools to help them target customers to drive more sales, she points out.

If a loyalty program proves too cumbersome for a smaller operator to implement in terms of time and/or investment, every retailer should still know who its most loyal customers are. Even without a loyalty program, this information can be used to create an email marketing campaign to stay in touch with these loyal customers and personalize their experience. A service like Mailchimp is an effective way to create an email campaign, Orsbourn noted.

"It is not a traditional loyalty campaign, but what you are doing as an independent retailer is treating your most loyal customers in a different fashion," he said. "It means you have an initiative in place to reach out to customers and you're trying to grow that consumer base."