Unlocking the Secrets of Successful Loyalty Programs
NATIONAL REPORT — A loyalty program has been a benefit for Family Express Corp.'s customers since 2009 — the year the 80-plus-store Valparaiso, Ind.-based chain launched its F.E. Perks program.
In the years since, F.E. Perks has evolved right alongside advances in technology and customers' changing expectations of what a loyalty program should be.
In January 2024, the convenience retailer launched a next-generation, personalized mobile app experience powered by Richmond Heights, Mo.-based Rovertown that lets customers easily order food to-go and pay using Stripe. In March, a beverage subscription that gives customers a free dispensed beverage once every four hours for just $9.99 per month debuted. Family Express also has begun leveraging artificial intelligence and predictive scoring through Paytronix to communicate and reward its loyalty members.
"This allows us to meet our customers where they want, when they want, and with what they want," explained Thierry Lyles, the retailer's digital marketing manager. "I think, in some cases, we may know our customers better than they know themselves. It's a truly one-to-one experience."
Family Express' approach illustrates how savvy convenience store operators are navigating the ever-changing world of loyalty. Data underscores just how important a robust loyalty program is. C-store loyalty members are 100% more likely to visit than nonmembers, and loyalty member checks are 12% higher than nonmembers, according to Paytronix research.
The challenge is to create a program that surfaces in the sea of loyalty programs that are currently flooding the marketplace. As Michael Jaszczyk, CEO and chief digital transformation officer at Raleigh, N.C.-based GK Software USA, noted: "There's no shortage of c-store loyalty options for consumers. The retailers that aren't investing in the right capabilities to deliver the seamless experiences that customers expect will only fall behind."
Evaluate to Evolve
By now, most c-stores have at least a basic loyalty program in place. But having the "right capabilities" that Jaszczyk references is the key to turning loyalty members into high-frequency shoppers, ultimately boosting sales and building long-term loyalty. Operators must continually evaluate their programs and make changes when necessary — or suffer the consequences.
"Brands that opt to maintain the status quo of their programs will likely begin to see some level of regression in KPIs as competitive programs offer a better loyalty experience to their member base," said Jeff Hoover, director of strategy and analytics for c-stores at Paytronix.
Having staff focused on loyalty — not only externally, but internally as well — can help head off that kind of regression. "Watch what your competitors are doing. I'm not saying chase everything that's out there, but understand what's going on," Hoover added.
He also warned against doing too much at once when evaluating and fine-tuning a program; not everything, after all, needs a complete overhaul.
[Read more: The Trends Shaping Online Ordering, Loyalty & the Convenience Channel]
"Bring in one thing at a time, so you can inform your team and communicate to your customers," he continued. "Just tweak the program and bring in a new component. You can roadmap these things out. Maybe you want to drive proprietary foodservice and that's going to be your focus for 2025."
When making changes to your existing program, Family Express' Lyles said retailers must make sure they are looking at things from the customer's perspective first.
"You could implement the best feature in the world, but if the experience is clunky and frustrating, you won't find success," he cautioned.
Jessica Starnes, director of loyalty at Powell, Tenn.-based Weigel's Stores Inc., which partners with PDI Technologies for its My Weigel's Rewards program, believes retailers must plan ahead — several years, in fact. Customers at Weigel's 80 c-stores can earn points on every purchase whether it is online or in the store by joining the brand's loyalty program.
"Decide on what you want your loyalty program to look like in three to five years, then begin planning on how to get there," Starnes advised her fellow retailers.
The Personalization Component
While the best tweaks to make will depend on each retailer's specific dynamics, there is one aspect of loyalty that is becoming a must. "The future of convenience store loyalty lies in personalization," according to a recent report from Electrum Holdings LLC.
According to that report, more than 80% of shoppers favor personalized interactions and 65% of them are willing to share their data for personalized benefits. "In a market saturated with loyalty programs, retailers must leverage data insights to craft personalized promotions that resonate with individual preferences," the report stated.
That is a path Melissa Willis, senior director of strategic partnerships at Alpharetta, Ga.-based PDI Technologies, sees more convenience retailers taking. "C-stores today are actioning data to deliver more personalized consumer experiences. They're creating messages and moments that create value, and that value is what keeps the loyal consumer engaged," she observed.
Crucial to success on the personalization front is taking a deep dive into data, said Hoover, who noted that reviewing performance frequently can help get ahead of downward trends.
"Look at how you're performing ... look at the KPIs of your program," he said. "Maybe they're not acquiring new customers or retaining existing customers. Maybe they need to lean in and do a survey. This is where we can learn what new things are going to be most relevant."
Data also enables c-store retailers to home in on specific customers, allowing for deployment of personalized promotions instead of one-size-fits-all offers. This is especially important for the group Hoover calls "casual loyalists" — customers that stores can start losing quickly, perhaps when a competitor enters the market. "We can hyper-localize a promotion to win them back. For example, a 20-cents-off-per-gallon offer just for them," he said.
Final Words of Advice
So, what is the secret to executing a loyalty program that continues to succeed as the industry evolves? Not overlooking the basics is an important first step, according to PDI's Willis.
"As simple as it is, implementing a customer segmentation model is one of the most fundamental things you can do when revamping your loyalty program," she stressed. "From that starting point, you then can deploy personalized offers based on your customer segments and where individual members are in their lifecycle, better enabling you to move them to the next stage to build even more loyalty while also achieving your business goals."
Measuring impact and collecting feedback is important as well from Hoover's perspective.
"Monitor the competition for cool new ideas and be sure to set up promotions and specially targeted campaigns in a way that can measure their impact, so you don't have to speculate on what's working," he said. "Talk to team members in your stores — they know what's out there, they know what's working, they're hearing the feedback directly from customers. And have a conversation about how to grow or how to respond when the program is reaching maturity point and starting to fall off a bit."
With the numerous loyalty options available to consumers today and the myriad of data available to tap, there is one message not to be lost in the quest for success, Jaszczyk concluded.
"Convenience still needs to be at the heart of the experience," he underscored. "Ensuring customers have access to the loyalty program, including their personalized rewards and offers, at every touch point is paramount."
Whether it's engaging at the fuel pump or the in-store checkout, ordering ahead on the app or a combination of these channels, seamless integration across a retailer's operation ensures the shopper has the best experience possible and encourages future spending.