Updating Loyalty Programs for the 21st Century Customer

A recent webinar hosted by Convenience Store News examined the ways stores can use new technology to refine their rewards programs.
Illustration of woman surrounded by loyalty program money and rewards

CHICAGO Despite convenience store companies spending up to 10 percent of their budget to run a loyalty program, roughly 69 percent of their customers will go inactive in the program, with 42 percent of those customers leaving it entirely.

These revelations came via Tom Byrnes, senior vice president of marketing at PayiQ, during the "New Research: What Executives & Users Really Think of Loyalty" webinar hosted by Convenience Store News and sponsored by Quisitive's global payments business unit, PayiQ. The presentation examined the different ways consumers interact with loyalty programs, what they expect to get out of them and how stores can better utilize technology solutions to engage with their customers.

Meeting the Customer Where They Are

According to Byrnes, while most loyalty programs make it easy to join consumers will, on average, join up to five other programs if they've already joined one keeping members engaged and using the program can be trickier.

"It can be up to 11 times more expensive to attract a new customer than it is to retain a current one," Byrnes said. "So, while it makes a lot of physical sense to lean into your previous successes and generate as much value as you can, it's also important to remember that your most active customers are already likely to be your best customers."

He also acknowledged that even small changes in customer engagement can make a big difference on the back end. For instance, increasing the engagement of program members by only 7 percent could boost the lifetime profits per visitor by up to 85 percent. However, if stores don't regularly update their design plan, they might be missing out on these opportunities.

"Bottom line, the customer has moved and is now moving all the time," Byrnes said. "That's going to require operators to find a new way to leverage loyalty solutions that deliver the kind of customer data that they're going to need to align offers, rewards and messaging."

Byrnes did offer ideas on how stores could implement new loyalty plans or update old ones. The days of receipt coupons, mailers and even social media rewards are falling behind, he said, so it's up to stores to adapt to new methods of outreach to meet customers where they are. He suggested companies start using point-of-sale credit card data to analyze shopping habits and pinpoint areas of engagement or outreach for individuals.

"You either face a big strategy shift and a significant investment hoping to increase ROI, or you accept a traditional one-size-fits-all loyalty experience that's not aligned with what the customer's expectations have become," he said. "The good news is you don't have to accept second-rate results."

Data sources for convenience stores

Utilizing New Technology

Launching off Byrnes' presentation, James Becker, head of payments intelligence business development for PayiQ, provided a brief overview of PayiQ's Payments Intelligence solution, which allows stores to track all customer purchases with a credit card, not just those already enrolled in a loyalty program.

The goal of the software, he said, is to provide better information on all card-paying customers while still protecting personal and private information.

"Customers that are not enrolled in or maybe do not engage through your loyalty program can now be securely tracked and interacted with automatically," Becker explained. "For the first time, you can have automated personalization at scale."

Becker emphasized the ways this could provide better experiences for customers over time, as the more purchases a guest makes, the more data is gathered, and the better a personal profile is built. This, in turn, can lead to a real-time outreach experience tailored specifically to each customer. If they subsequently choose to become a rewards member, all of their previous information moves with them, allowing the solution to work in tandem with existing programs, he noted. 

"This ability to deliver a personalized offer while a customer is still in the store or at the pump surprises and delights them," Becker said. "It creates a positive emotional dimension at the moment of purchase that enhances their perception of your brand."

A replay of this webinar, "New Research: What Executives & Users Really Think of Loyalty," can be accessed here.

About the Author

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Amanda Koprowski

Amanda Koprowski is the associate editor at Convenience Store News. She is a new member of the team, having joined the company in December of 2022.

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