DALLAS -- Loyalty programs generally fail or disappoint for a number of reasons. Figuring out what is wrong starts by understanding what successful loyalty programs should accomplish: They should change your customers' behaviors.
To achieve that kind of change, a loyalty program must be easy to integrate and cost-effective for owners to operate. they should provide value to members, and be seamless and convenient for them to use.
A successful program also requires time, money, technology and expertise—all of which are a challenge in today’s convenience retailing environment.
Loyalty programs must satisfy a range of shoppers, including pump-only patrons, repeat buyers, impulse shoppers and those who stop at the pump and come into the store. Whether they are predictable shoppers, most customers have only a few minutes to interact, so the loyalty program has to work at the right moment for just the right reason.
Here are three common reasons that convenience-store loyalty programs fall flat, and some thoughts on how to turn them into successes …
In-store execution falls flat
The challenge: One of the most important pieces of the loyalty puzzle exists at the moment of checkout: the cashiers who interact with every customer. As the primary points of contact between shoppers and the loyalty program, cashiers and store associates must be successful marketers, explainers and cheerleaders for the program and related offers. Upfront training of store associates is critical, of course. But what really makes the difference between a lackluster program and an engaging, successful one is ongoing communication and excitement about the program from local managers to their employees.
Loyalty programs need more than management buy-in; they need a wholehearted stamp of approval and ongoing conversations with employees about the importance of the loyalty program to the store's success. Manager and owners will experience greater engagement if they build into the store associate’s job description a requirement to understand the loyalty program and promote it enthusiastically.
The fix: Loyalty program providers can ease the burden on already-busy store associates by putting the power of loyalty and rewards directly into consumers' hands. Some programs can communicate directly with program members and tailor offers that are based on their purchase history, preferences, location and other critical pieces of shopper data. Some underlying loyalty marketing suites can drive program engagement by helping consumers find, earn and redeem the valuable rewards and promotions they prefer.
The offer isn’t compelling, valuable or unique
The challenge: Successful convenience-store loyalty programs must differentiate a particular store or chain from similar outlets and nearby competitors. Ask yourself these questions: Will your customers truly like this program and the rewards offered? Is the offer compelling enough to convince them to sign up, engage with the promotions or download the mobile app? What specifically will attract shoppers to your store (and its loyalty program) and attract them away from competitors?
The fix: Work smarter, not harder about how you market your loyalty program. Rely on the expertise of loyalty program providers who understand your category and have experience in developing loyalty strategies for the convenience retail sector. That’s critical because you’ll need their experience to help execute programs that give members a differentiating reason to shop with you, and promote the right offers to the right consumers.
Leverage financial investments from other players, including fuel brands and consumer-packaged-goods manufacturers, to fund offers and capitalize on their brand recognition to communicate directly with shoppers. Given that most convenience stores use similar and industry-standard point-of-sale systems, owners and program managers must design creative, unique programs that stand out from the crowd.
The smartphone isn’t involved
The challenge: It's no secret that convenience stores have been slower than other retail sectors to adapt to the mobile environment. But now that the smartphone has become a ubiquitous consumer device, convenience retailers need the ability to stay competitive and engage with shoppers within the mobile channel. Smartphones and mobile apps serve as critical connectors to all other channels that members rely on to search for offers, find nearby locations and engage with promotions and brands wherever they are.
The fix: Out-of-the-box solutions can provide ready-made mobility, but their one-size-fits-all nature means they are not easy to customize and personalize to meet your operation’s specific needs.
Loyalty programs need scalable platforms that give them the flexibility to build, manage and change programs to satisfy the needs of their customers and their markets. Store owners will have a competitive advantage if they can design and customize their offers, mobile app and mobile website on an as-needed basis to stay current with the ever-evolving mobile channel.
If you think your loyalty program is "broken," chances are it can be fixed.
Your challenge is to identify your program’s weakness, and then refocus on the core objectives that will turn around deficiencies, strengthen results and deliver more of the nearly 16 billion trips that consumers will make to convenience stores in a year: more traffic, more sales and more customers who love your rewards so much they’ll keep coming back for more.
Jamie Hudson is vice president and general manager of promotional solutions for Excentus, a Dallas-based firm that provides customer loyalty programs and rewards programs. He is responsible for the company’s convenience retail operations that specialize in creating offers and promotions, handling their setup and testing, managing signage, social-media strategy, training, support, rebate settlement, budgeting, reporting and everything needed to help convenience retailers differentiate their brands in a highly competitive marketplace. He can be reached at [email protected]