Do’s and Don’ts of a Successful Reward Program

Four reward-program practices c-store retailers should adopt

loyalty card

Brought to you by Paytronix.

The reasons behind having a reward program may be the same among all convenience stores—such as improving profitability and enticing customers to make incremental sales—but all reward programs are not created equally, and a one-size-fits-all approach may not have the desired outcome retailers expect.

During the webinar “Do’s and Don’ts of a Successful Reward Program,” Paytronix discussed reward-program practices that c-store retailers should adopt, as well as the practices retailers should be cautious of implementing in their reward program.

Here are some do’s and don’ts of a successful reward program:

  1. Do open up your enrollment methods. One of the most important components of a reward program is enrollment. If you do not have enough of your customers enrolled, you will have a hard time getting them to be active in your program and provide the beneficial returns on your program. Gaining new enrollment from your customers should always be a top priority for any brand. The best way to ensure that your customers are signing up for your program is to lower the barrier to entry and allow customers to sign up in a way that makes the most sense to them.

    An example of opening up enrollment methods is Thorntons Inc., which uses a multichannel enrollment method that includes a card, mobile app and responsive web pages that are easily accessible by any device. By using multiple channels to enroll their customers, they were able to enroll 1 million customers within their first year, which contributes to their program profitability and the incremental sales they were looking for with their program.
     

  2. Don’t confuse a mobile app with a mobile strategy. A mobile app is very different from a mobile strategy. According to Pew Research Center data, 72% of U.S. consumers own a smartphone; this opens a huge opportunity to engage with customers where we know they are, which is on their phones. But, with 80% of consumers’ time spent on only five apps, your app is competing for precious attention with countless other apps out there. Luckily, there are plenty of other ways to connect with customers using a complete mobile strategy:

     - Responsive web pages
     - Responsive emails
     - Social media
     - Mobile payment
     - Push, pull and geofencing
     - Surveys
     - Online ordering
     - SMS (native messages)
     

  3. Do use segmentation within your program. Segmentation is the lifeline of loyalty programs. Being able to see the differences in your customers will greatly help your marketing efforts to try and capture their interests to come into your store. Without the ability to segment, retailers are unable to send promotions to their customers that will compel them to shop with your brand.

    Customers will respond differently to promotions that you send them; some will take advantage of it and some might be put off by it if it is not relevant to them. By using segmentation, retailers can use the three R’s in marketing: relevance (making customers feel a one-to-one relationship), retention (creating fewer opt-outs and engaging with your customers) and revenue (capturing customers and incremental spend).
     

  4. Don’t overuse club programs. Club programs are a staple in the industry and help motivate customers to visit and spend more—the c-store industry can be oversaturated with them. Any one store could have anywhere from 15 to 30 club programs going at any given time. Reducing the number of club programs offered can help to generate more revenue for your brand. Instead of running club programs for such a wide range of products, try to reduce the number by only focusing on items that are moving and generating revenue. Evaluate your club programs by asking a couple of quick questions: Are the clubs generating revenue? Are you seeing any uptick in incremental purchases? Are your customers engaged with them?

There are many more tips for successful reward programs. View “Do’s and Don’ts of a Successful Reward Program” on demand to learn more.