United Dairy Farmers Makes a Loyalty Connection

NATIONAL REPORT — When convenience store retailers and suppliers discuss how to boost basket sizes and pump up overall sales, loyalty programs continually come up as a key factor — and that's no surprise, considering all the benefits they bring.

To get those benefits, c-stores need to focus on more than just numbers. NACS data shows that three-quarters of c-store shoppers feel valued by convenience retailers where they are enrolled in loyalty programs.

"Creating that connection is really important," said Ryan DiLello, content specialist at Paytronix, during the recent webinar "United Dairy Farmers: How a Nationally Ranked Loyalty Program Drives Customers from Pump to Store," presented by Convenience Store News and sponsored by Paytronix.

Cincinnati, Ohio-based United Dairy Farmers (UDF) first launched its U-Drive Plus loyalty program more than a decade ago but has been evolving it considerably over the last few years. The program began as a tool to offer fuel rewards but has grown and changed over time, according to Denise Jenkins, vice president of marketing, insights and loyalty at UDF.

[Read more: United Dairy Farmers Reaps Rewards From Revamped Loyalty Program]

The current U-Drive Plus core structure consists of everyday cents off, fuel rewards, U-Drive Plus pricing and market basket savings for all members, while registered members who provide more personal information also receive exclusive benefits such as a registration and birthday rewards, weekly app freebies, targeted offers and a low-price lock, which automatically rolls back the price they pay to the lowest fuel price of the day.

These features drive customers in from the fuel pump to the c-store because "people don't want to leave savings on the table," Jenkins said. "Often, if you can get them to come for gas, you can get them for something else." For example, those who take advantage of the Wednesday freebie offer often have add-on purchases.

UDF campaigns typically feature three tenets of being personal, exclusive and unique, which in combination "give us great differentiation," she noted. Examples include a free birthday sundae reward paired with a personalized birthday message and a personalized survey with the reward of a beverage discount.

A personal approach can mean targeting registered loyalty program members who are active but lapsed on fuel. Paytronix Senior Loyalty Strategist Donnie Fairbanks pointed to UDF's offer of a richer reward to those who completed a two-visit challenge, which resulted in a 28.9 percent lift in gallons vs. the control group, a 17.8 percent lift in spend and a 5.9 percent increase in visits.

"It's been super effective," Fairbanks said.

The company has also offered exclusive win-back offerings that are customized based on an individual's activity levels, such as offering the chance to visit within the next 14 days for a free regular milkshake or malt. Results include a two-times retention level on a 28-day basis, a 57 percent increase in spend and a 98 percent lift in customer lifetime value post six-months.

Finally, UDF offers unique rewards to registered members once a week. Wednesday freebies have included a free Twix bar, Starbucks packaged beverage and ice cream cone. Results show a 48 percent lift in app registrations and a 4.1 percent average redemption rate. Additionally, 60.7 percent of registrants became active members and 27 percent of UDF's total base has redeemed a Wednesday freebie at least once.

The main point of the Wednesday freebie program is that there are no strings attached, according to Fairbanks.

"Loyalty programs should give hugs to their best members," he said. "This does that really effectively."

Since the summer 2022 launch of U-Drive Plus, both absolute registrations and rate of registrations have increased, bringing the program's count of registered, active members to 278,000. These members typically spend $90 per month per U-Driver.

C-stores don't have to follow UDF's specific path to loyalty success to do well, but they should consider applying the underlying principles to their programs, according to Jenkins.

"Think about what you have in your toolkit that's unique and proprietary that your company and your brand personifies and blow it up," Jenkins encouraged retailers. "Make that big and bold in your program so you can stand out."

A replay of "United Dairy Farmers: How a Nationally Ranked Loyalty Program Drives Customers from Pump to Store" is available here.