Loyalty programs result in 18-30% more spend, plus an additional trip per week, said Peter Rasmussen, CEO and founder of Convenience and Energy Advisors, St. Petersburg, Florida, at CSP’s Convenience Retailing University event in Nashville, Tennessee, last week.
To gain the most out of a convenience-store loyalty program, Rasmussen called out several ideas on how to engage, relate to and retain loyalty members.
Present a Simple App Design
An app’s design has to be simple or people will abandon it. He said that a quick registration is beneficial, and then the customer can get enticed and ultimately register fully.
“I also encourage that you should let customers see your app,” he said.“Don’t create a barrier where you have to go through a long registration just to see what’s going on. Let them get enticed, and then the goal is that they register for it.”
Catch Interest With Mobile Games
Mobile games within a loyalty app can act as a link to social media, Rasmussen said.
“What if you had the opportunity to post your ratings on social media?" he said. “Then the game is not only influencing customers to spend more time on the app, but it’s also providing social media reach and potential engagement.”
Mobile games can also be a way for customers to earn points.
Offer Point Redemption Outside the Store
When customers have gained enough points, there’s more than one way to reward them. Some companies give customers a choice in how to use their rewards points, he said. Instead of giving in-store offers, retailers can experiment with allowing points to go toward another company outside the convenience-store industry, expanding their offers to outside their own store.
While that means sending customers elsewhere, retailers might want to try it and see if it results in more customers or not, Rasmussen said.
“Maybe they don’t care about getting an offer on a Gatorade and would rather spend rewards somewhere else,” he said.
Focus on Existing Members With Personal Offers
The lower end of a successful loyalty program represents around 5% of inside transactions.
“If you’re just getting started, that’s really good.”
When a chain has top-tier membership numbers, with one in three transactions being loyalty-based (30-40%), then strategy is important. There are two routes to go: continue to grow or further nurture the existing member base.
Further nurturing the existing customer base is important because the top 10% of a store’s loyalty members typically represent about 56% of the total loyalty visits, Rasmussen said.
“You’ve got these people in the program that are your super group,” he said. "They’re your best customers. You nurture them, and you don’t want to lose them because if you lose them, it really, really hurts.”
To make sure the existing loyalty members don’t leave, develop targeting segments and provide personal offers to them, he said. You can gather data about how often a customer comes into a store and what they’re purchasing.
“As folks shop your store, you can start to develop segments. As you develop those segments, you can start to get to know people and personally offer to them.”
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