loyalty basics, loyalty program
A successful loyalty program will increase foot traffic, attract new customers, keep existing ones and engage them more effectively.

Though most convenience retailers already have a loyalty program in place, those who don’t are missing out on the significant, measurable ways a loyalty program can attract new customers, keep existing ones, and drive higher revenues and profits. As our Road to Rewards 2017 report indicates, 43% of c-store shoppers choose a specific store because it offers a loyalty program, just behind the 44% who decide where to shop based on location and 31% because of gas prices. This shows that loyalty programs can change c-store shopper behaviors, which is why, according to our most recent research, 73% of convenience retailers currently have a loyalty program.

But what about the remaining 27% of convenience retailers who don’t have a program yet, or even those who do but aren’t sure if it’s working? How can they build and evaluate a successful strategy?

These are the basic components of successful loyalty programs that all convenience retailers should master – a “Loyalty 101” for those just getting started, and an important refresher for c-store operators who already have a program in place.

Deliver value

The first and most important aspect of a successful loyalty program is that it delivers recognizable value to members. A loyalty program simply for the sake of having a loyalty program doesn’t accomplish anything; a loyalty program that provides direct, everyday value to customers gives a convenience retailer a competitive edge.

“Value” isn’t always monetary. Rewards that consumers find meaningful are key, but so are convenient processes and positive customer experiences. Consider the customer’s viewpoint, and focus less on selling products/services and more on what makes participation in the program easier for them. High-value loyalty programs feature smooth, efficient transactions at the pump and inside the store as a benefit for their members.

As the C-Store Shopper Report explains, shoppers are loyal to c-stores and convenience retail brands that consistently provide value along with simplified experiences. The majority of shoppers will shop more at c-stores if they are members of that store’s loyalty program, and some will shop exclusively at those stores. This means a loyalty program that offers value will drive repeat visits and help operators stand out from their competition.

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Embrace data

But a good loyalty program doesn’t just provide benefits to its members. It also helps convenience retailers understand who their customers are and what they want. Loyalty program data can be used to track customers’ activities, preferences, behaviors and patterns, and convenience retailers can use these insights to reward customers for the behaviors that lead to more foot traffic and sales.

That same loyalty program data can identify trends and opportunities for the c-store operator. Understanding member shopping patterns allows convenience retailers to offer promotions on slower days/times to increase traffic and shorten the time between visits. The next step would be for convenience retailers to use loyalty program data to go beyond influencing member behavior to attracting new customers in a targeted way.

Because customer data is the key to understanding customer behavior, the ability to capture and easily analyze data is essential to a successful loyalty program.

Mobile first

Understanding customers through data is critical, but so is reaching them in the channels they prefer. Today’s on-the-go, tech-savvy consumers increasingly prefer the mobile channel. A well-designed loyalty program will allow members to access the program through a mobile app, so they can stay connected and engaged no matter where they are.

Nearly every customer that walks into a convenience store carries a smartphone, and interacting with them through that device allows convenience retailers to reach them before, during and after the moment of decision making. Loyalty program members are particularly connected to mobile – 31% of c-store loyalty program members use a mobile app to manage and redeem their rewards, including 60% of Millennials. This means a mobile app is a must-have for any c-store loyalty program.

Rewards matter

The right rewards mix is another must-have for successful loyalty programs. Rewards must be seen as valuable, of course, but customers also like to be rewarded individually for their actions. An across-the-board price reduction or coupon anyone can use is less emotionally satisfying than giving a member a reward for something specific that they did. This is why successful loyalty programs use flexible rewards currencies – like fuel savings – that can reward members for a variety of behaviors – cumulative spend, repeat visits, or purchasing specific products.

It helps that consumers love fuel savings; again, according to Road to Rewards 2017, 64% of loyalty members join a loyalty program for the opportunity to save on fuel, making cents-per-gallon rewards the most popular rewards currency, preferred even more than cash-back.

A successful loyalty program will increase foot traffic, attract new customers, keep existing ones and engage them more effectively, and ultimately drive revenue and profitability for convenience retailers. Starting or rebooting a loyalty program is no small undertaking, but if the program can pass loyalty 101 – providing value, embracing data and mobile, and choosing the right rewards mix – it can deliver real results.

Convenience retailers don’t have to go back to school to get loyalty right – they just need to identify a partner that can provide the technology and expertise they need to get started.

Did You Know: Your Source for PDI News provided by PDI, the leader in enterprise management software for the convenience retail and petroleum wholesale markets.