4 Ways to Run a Successful Loyalty Program

How to make your rewards programs more rewarding

loyalty card

Brought to you by PDI.

Customer loyalty programs are not new in the convenience-store segment, but most are still early in the adoption phase. For retailers who are working on building and launching a new program, or those who are looking to improve an existing one, there are plenty of resources that can help ensure success. From planning strategically for strong adoption to customizing offerings using consumer data to continually revamping rewards systems, some of the current trends in loyalty programs can help retailers get their programs off the ground, or help existing programs thrive. Here’s how.

Ensuring strong adoption

The first and perhaps most important step to having a successful loyalty program is ensuring that consumers who are interested aren’t confused by the signup process, and that it’s easy to join.  The offer must be clear and simple. Retailers should think through a progression of loyalty program features and offers, then make certain the program’s value proposition is clear for consumers at the launch of the program. Without obvious and easily realized value, consumers won’t be interested, and the work put into the program won’t pay off.

Utilizing data efficiently

Brandon Logsdon, president of Excentus, a loyalty program provider recently acquired by enterprise software provider PDI, says some c-store retailers with loyalty programs are giving the consumer more ways to redeem the benefits being presented to them, which can help increase engagement. Logsdon says retailers are increasingly using data to move away from a one-size-fits-all to a more targeted promotion scheme within the loyalty program. This includes strategies such as targeting different customers based on past purchase preference, which is tracked through the loyalty program.

Offering different communication options for users

Logsdon notes that different consumers enjoy different methods of interacting with loyalty programs. Retailers “have to invest in all of the relevant channels of CRM to appeal to a broad base of consumers today,” he says.

While some users prefer e-mail communication, others are happy to use a mobile app, and while some prefer push notifications, others don’t mind the occasional text message from the loyalty program. This goes back to utilizing data—tracking engagement rates for different communications and associated channels is a great way to test what’s working.

Merging programs

Loyalty programs are becoming more comprehensive as well. Where major oil companies used to offer programs based on cost savings on fuel, and convenience stores had separate loyalty programs for products sold inside the store, such as coffee or fountain beverages, now the two are converging.

The technology underpinning the loyalty industry today allows retailers to launch more sophisticated programs, Logsdon says. Some of the sophisticated features include interactive mobile apps, enhanced digital elements and a stronger emphasis on analytics and data so retailers can target their offerings based on customers’ preferences and purchase history. These merged programs have the capability to tie offers together, too, like offering a beverage with a tank fill-up, for example.  But, according to Logsdon, that’s just the tip of the iceberg. “We see a huge opportunity to begin combining loyalty data with retailer transactional data to unlock the next level of insights and offer sophistication for convenience retail—it’s a really big idea.”

Logsdon notes there are numerous reasons for retailers to use loyalty programs. “You want to use the program to engage your consumers more…to retain the spend you have, but ultimately you want to grow how much your customers spend with you—whether that is through more frequent visits or more spend per visit.  Once you start to build a base and an understanding of who your customer is and how that individual customer is buying with you, you can then start to do things like optimize pricing and promotional strategies around that.”

He also suggests that retailers can start analyzing data to learn about the customer and adjacencies in the basket. “You might be running a promotion on discounted Red Bull, and what we start to learn is, the customer is buying an assortment of other products with every Red Bull. Now you have a very powerful data set to maximize your relationship with vendors outside of the energy drink category, or to create bundled offers for that customer that you know they will value.”

For retailers looking to get the most out of the loyalty programs, ease of adoption, strategic use of data, customized communication and sophisticated rewards offerings are key ways to boost customer satisfaction.