With so many convenience retailers offering customer loyalty programs these days, consumers can have their pick of the points- and rewards-generating campaigns. To stand out from the pack and attract customers not just for their next visit but for a lifetime, c-stores need to look beyond the omnipresent points/rewards options and consider multifaceted loyalty programs woven throughout store operations, while also demonstrating their own loyalty to valuable patrons.
“People aren’t joining c-store loyalty programs just to be entitled to buy two bags of M&Ms for $5,” said Eric Sales, chief marketing officer at Abierto, which provides digital signs, menus and kiosks for stores. “Rather, they’re interested in supporting stores that are investing in their brands, including food and coffee programs and new store build-outs.” Instead of using loyalty programs to just incentivize, “it’s more effective to use them as rewards,” he added. Fortunately, some c-stores are moving in that direction, Sales noted, and “are beginning to conceptualize customers as long-term clients.”
Loyalty members today want mobile checkout, a personalized experience, access to secret menu offerings and exclusive events.”
The recently published “Driving Engagement From Convenience Retail Loyalty Programs” report from NACS—produced in partnership with Bounteous, a digital consultancy—details how c-stores can build loyalty program affinity beyond rewards and provides insights on shopper expectations, program engagement, personalization and communicating with members. The research is based on data from 1,000 responses to a survey conducted last summer among individuals who belong to c-store loyalty programs in the U.S. According to Patrick Loftus, manager of survey research and data visualization at NACS, the polling of c-store loyalty members found that in many cases, the programs have become “commoditized,” as the average member is enrolled in nearly seven different plans. As a result, he said, “c-stores that are basing their loyalty programs on a simple points incentive aren’t going to get very far” and should consider popular enhancements, such as payment solutions, exclusive offerings and driving home a “feeling of belonging” among customers.
To be sure, loyalty programs have become increasingly important to c-store shoppers, even as the channel has lagged others in advancing the plans. Over the past decade, punch-card incentives have evolved into fob-swipe programs and, most recently, integrated mobile apps. Many consumers today will seek out stores where they’re enrolled in loyalty programs, even when other, more convenient options exist, the study found.
But for such a dedicated shopper, fuel and merchandise discounts and rewards are mere “table stakes,” according to Abby Karel, vice president for convenience retailing at Bounteous. “Loyalty members today want mobile checkout, a personalized experience, access to secret menu offerings and exclusive events.” And importantly, best-in-class customer service is vital to these consumers, Karel added. “Loyalty members want that special experience of feeling a part of a community that stretches from the forecourt to the person at the counter to receiving communications via text message,” she said, touch points that provide a deeper level of engagement with the plans.
STATE OF THE ART
App-based loyalty programs are the state- of-the-art option for c-stores and other retailers today, offering more features and ways to communicate with members than physical cards and fobs. Apps are useful for alternative payment methods, tracking past purchases, last-mile fulfillment, exclusive menu items and sweepstake entries. “Driving Engagement” found that 60% of c-store loyalty members access the programs via apps, while 24% use a physical card. According to Karel, c-stores that don’t offer a digital loyalty program “aren’t driving growth of their customer base.”
While consumers—particularly millennial and Gen Z members—are increasingly using the apps, the data generated for retailers is critically important. Digital loyalty programs “allow for personalization,” Karel said. “Thanks to app-based loyalty programs, a c-store will know if a customer is a Red Bull drinker versus Monster. It will know what a customer most likely wants even before he or she walks in the door.” Loftus added that c-stores without digital loyalty programs can easily fall behind in collecting data, as well as miss out on promoting services like delivery and exclusive membership offerings. He and Karel pointed to operators like Wawa, Yesway, 7-Eleven, Spinx and Dash In as among the industry’s leaders with app-based loyalty programs.
Text messages and emails are preferred over alerts or messages generated by the app.”
The ability to obtain attractive discounts and exclusive items can be a big draw for loyalty members. United Dairy Farmers’ U-Drive Plus program, for example, recently offered members two gallons of milk for $7, ice cream sundaes for $2.99 and a six-pack of donuts for $6.96. Both Wawa and Casey’s promoted free and exclusive items to their loyalty members late last year. Casey’s offered “daily surprises” for Rewards members for three weeks on drinks, candy and snacks via its app, along with extra bonus points. Wawa, meanwhile, reprised its popular “Free Coffee Tuesdays” campaign for Wawa Rewards members, entitling them to a free hot or iced coffee for eight consecutive Tuesdays. According to the company, coffee is the most popular product among its loyalty members.
“With the recent high gas prices, people are coming into the stores less,” remarked Sales, so the focus for many c-stores has been on keeping customers loyal and not just shopping for stores based on gas prices. He pointed to one chain that recently ran a one-month promotion for loyalty members where, in addition to the standard discount on gas, they could receive a free breakfast sandwich for spending $50 on gas or a free cup of coffee for spending $25 at the pump. “That was a smart way to thank customers for their loyalty at a time when gas prices were high,” he said, while also inviting them into the store.
Another tactic is targeting offers, deals and messages to loyalty members based on their user profile and previous purchase behavior. According to the NACS report, convenience loyalty members want personalization to be a part of the programs, “but with some reservations.” Personalized offers related to rewards and promotions are welcomed, the study found, but members will push back when asked to share extraneous information about themselves or their families. “The information convenience retailers collect should assist with tailoring rewards, promotions and discounts, and not be used for communications that are unrelated to the primary benefits of their loyalty program,” the report advised.
Overall, tailored offerings can be quite effective. “We’ve seen that more tailored and personalized messaging has improved engagement and response rates with loyalty members, and in some cases has been used as a key incentive to draw customers into the program due to the personalized value it brings,” remarked Jeff Hoover, director, c-store insights at Paytronix Systems. AI-driven tools enable retailers to read consumers’ behavior and then target them with relevant messages based on factors such as what they’re likely to purchase next, their price sensitivity and even the day of the week. Such data helps improve engagement and drives consumers to visit and spend more, Hoover said, and also helps retailers identify unprofitable loyalty customers and exclude them from certain campaigns, leading to better profitability. UDF’s loyalty program, for example, can customize different offers for members who may not drive or for those that purchase gas but care more about earning a free ice cream shake than a gas discount.
While apps are emerging as a preferred platform for c-store loyalty programs, the NACS study found that when it comes to c-stores communicating with members, text messages and emails are preferred over alerts or messages generated by the app. Karel surmised that loyalty-messaging effectiveness “comes down to timing. An app notification must be relevant at the right time,” and for the most part, c-stores haven’t mastered the timing yet. She pointed to airline alerts related to upcoming flights and the gratitude travelers feel when they are notified as an example of timely text messaging. She envisioned a time when a c-store loyalty program, depending upon the information input by consumers and advances in AI, could alert members that they’re running low on gas and their preferred gas station is just ahead. “In that case,” she said, “the c-store is really responding to the needs of the loyalty member.”
Focus on nurturing new guests, retaining and incentivizing active guests to change their behavior and winning back lapsing guests.”
PROMOTE THE PROGRAM
Loyalty programs can’t succeed unless they’re effectively marketed and advertised to customers. Sales pointed to a recent promotion by a 200-unit c-store chain offering a free cup of coffee for customers who signed up for its loyalty program, simply by scanning a QR code on signage. “It was a huge success,” he reported. “In just two weeks, some 50,000 customers scanned the codes.” Similarly, Eric Sherman, executive vice president, insights and analytics at GSTV, a fuel-retailer-focused national video network, sees lots of opportunity to promote loyalty programs at the pump. He cited a recent partnership with a QSR chain to promote its loyalty program by encouraging customers to either download the app or go inside and sign up. “We saw a significant increase in app downloads and customers signing up in store,” he said. “It makes sense. The forecourt is the most highly targeted marketing space for a c-store’s most loyal customers. By promoting a customer loyalty program, c-stores will see not only increased app downloads but increased foot traffic, too.”
Hoover advised c-stores to first consider the long-term customer lifetime value of a digital loyalty program, testing it and surveying customers before rolling it out. Signup should be easy, he continued, such as a QR code for app download or a text-to-join offer. “Then know where each guest is in their customer journey and tailor communications,” Hoover said. “Focus on nurturing new guests, retaining and incentivizing active guests to change their behavior and winning back lapsing guests.” Finally, let members decide how they want to be communicated with and be rewarded. “It’s about catering to the customer needs,” he said.