A Lesson for C-Stores from Hotels?

How a loyalty program can increase visits and improve store sales

loyalty card

Brought to you by Paytronix.

NEWTON, Mass. -- Convenience stores and hotels have at least one trait in common: Both industries are faced with selling commoditized products in a consumer-informed world that is rife with competition.

For more than two decades, hotels have improved their ability to identify their guests and engage them in a way that delivers a direct, positive impact to the business through rewards programs. In fact, in a recent survey conducted by Hospitality Technology, hotels identified traditional rewards programs as the single best interactive marketing tool to engage customers and create loyal behavior while delivering a high impact to the business.

Convenience stores can learn at least two key things from hotels:

  1. Implementing a rewards program should be treated as a strategic business decision.
  2. Engaging a critical mass of customers with a rewards program will drive more business.

Shifting to a loyalty strategy is not a simple or easy undertaking—nothing worthwhile ever is. Consider Marriott’s experience. Roger Dow, the creator of the Marriott Rewards program, saw what airlines were doing with loyalty and thought it may work with hotels. “I went to Bill Marriott, who was always open to new ideas, and he agreed we should give it a try,” Dow said. “The first two years, I had peers trying to kill this idea a hundred times over. They called it a high-cost, ineffective program. Today, Marriott Rewards is a multibillion-dollar enterprise within an enterprise.”

By the time other hotel companies started similar programs, Marriott had a two-year head start—and 2.5 million people enrolled in the program. Hotels have already done much of the hard work, and customers now expect loyalty rewards from the brands they frequent most.

Rewards programs create loyal behavior, which in turn drives sales. Rewards program members account for nearly 80% of all transient room nights booked through hotel websites because they are compelled to buy on hotel websites rather than general travel sites.

Imagine if convenience stores were able to identify and motivate 80% of their transactions through guest engagement via a rewards program. Early-adopter convenience-store brands have experienced success in reaching a critical mass of guests. One example of this success is Thorntons Inc., Louisville, Ky. With over 1.5 million registered members, its award-winning Refreshing Rewards program strives to generate one extra visit per member per month and by doing so, to add substantial dollars to the company’s bottom line.

Hotels have created a market expectation for rewards programs within the convenience-store industry, and it’s time for convenience stores to follow suit and start knowing exactly who their best customers are. It’s essential. In most rewards programs, for example, a single best customer is worth between 10 and 12 average customers. If those best customers suddenly stopped coming in, wouldn’t you want to know?

Roll out a program in 2016 and establish a stronghold in guest attention—or risk falling behind with the brands that are late to the game.