ALPHARETTA, Ga. — For everything from customer retention to basket size and visit frequency, a well-run and genuinely rewarding loyalty program is key. That’s according to PDI’s recent C-Store Shopper Report: How to Fuel Customer Loyalty.
The report is based on a survey of 2,221 consumers and 239 U.S. retailers. It was conducted by a third-party research firm, Researchscape, earlier this year.
“Loyalty programs are extremely popular because they work. The good news is most c-stores have a program in place. The not-so-good news is that they haven’t maximized their programs to increase foot traffic and encourage higher spending,” said Brandon Logsdon, senior vice president of marketing cloud solutions for PDI, which has North American headquarters in Alpharetta, Ga.
The new report builds upon a similar research report launched by Excentus last year. PDI, which acquired Excentus in April 2018, has expanded the scope of the independent study to include information from c-store operators, in addition to consumers and c-store shoppers.
Click through for key takeaways from the report …
The state of loyalty
The vast majority of U.S. adult consumers—89%—have visited a c-store in the past six months. Meanwhile, loyalty program membership is expanding, with 42.5% of consumers saying they belong to a c-store loyalty program, up 6% from 2017.
According to the study, 73% of c-stores have a loyalty program in place, with 97% of those with loyalty programs saying they have been in place for more than one year.
Members and nonmembers
The survey found that 57% of c-store loyalty members will purchase gas and also visit the store, whereas only 33% of nonmembers will do the same.
Seventy-eight percent of customers surveyed said it is important to be able to earn rewards for fuel when prices are rising, and 77% said the same for when fuel prices are falling.
Members also spend on average 29% more money overall: $11.17 on average per visit compared to $8.66 from nonmembers. The survey also found that loyalty programs generally improve customer stickiness. According to the study, 66% of loyalty members engaged with their program at least once a week.
Retailers taking the survey cited “decreasing store visits” and “attracting new customers” as two of their most serious challenges. Also, 42% of retailers feel that training staff to effectively communicate the details of the loyalty program to customers is their top challenge.
Those aren’t the only worries from retailers. More than half—55%—of retailers said they struggle to keep up with technology and the pace of change, while 43% are concerned about customer fraud.
How retailers use data
Most c-stores—72%—collect customer data in some manner, but the survey found only 25% use the information the collect to identify new potential customers. Otherwise, 53% of retailers use customer data to encourage participation in a loyalty program; 47% use it to send personalized messaging and communication; and 36% deploy customized offers and promotions.
While the majority of retailers use loyalty programs, 37% of shoppers surveyed weren’t aware of c-store loyalty programs, and 26% of customers had never been asked to join one. But 29% of retailers struggle to connect to customers through multiple channels such as SMS and email.
The study found that a customer could be more likely to visit a c-store if they knew of and enjoyed its loyalty program. While the survey found that most customers choose a c-store based on location and low gas prices, 22% visit a c-store because of its loyalty program’s rewards, savings and offers.
All from the smartphone
For the first time, the survey found that most c-store loyalty members—52%—prefer using a mobile app for tracking and redeeming rewards. That’s a 21-point increase from 2018, when 31% of respondents said the same thing.