Six essentials for c-store rewards program success.
Customer rewards programs are a core component of marketing for convenience stores that are proven to increase revenue by driving incremental visits and sales.
Rewards programs also enhance the customer experience, establishing brand loyalty and opening communication channels to engage customers directly. A carefully crafted rewards program presents an opportunity to drive targeted customer behaviour, getting them to visit more often and increase their purchases, ultimately driving a return on investment for the brand.
Not all rewards programs are created equal, and the path to success requires a solid understanding of the core options and the potential offers presented to customers. Poor planning makes success more challenging, and an unsuccessful rewards program has the potential to waste a great deal of money and manpower.
The foundation for a strong rewards program is built upon two elements: the core program, and the layers and promotions that leverage the program. The core program is the heart of your loyalty initiative. It defines the rewards as well as how they are earned and redeemed.
The core program is what the brand communicates to customers and what is displayed in your store. Successful core programs will motivate guests to visit more often and spend more of their budget with you. The core program can reward guests based on their spending or how often they visit the store. Design the program to align with your brand and your business objectives.
The second part of the program – the layers and promotions – consists of the challenges, bonuses, and occasion-based rewards that you can add to your core program. Examples of layers include traditional birthday rewards or contributing a portion of the customer’s spend to charity. These layered programs can differentiate a brand and strengthen your customers’ connection with it.
Meanwhile, promotions are more targeted and timely offers that can be sent to boost traffic during slow periods, to increase customer spend, or even to win back lapsed customers. Promotions and layers are designed to influence buying behaviour and introduce an element of fun for your loyalty members with one-off interactions that create urgency and drive sales.
Here are six common elements of convenience store rewards programs. It’s not critical, or even recommended in many cases, to implement all of them; but it’s important to consider the value of each as it relates to your brand and program objectives.
EARNED POINTS — This is the primary element many rewards programs are built upon, where registered members earn points for making purchases or taking other specified actions. The accrued points can then be traded in by the customer for specified rewards or automatically converted to rewards at set intervals. Be creative with the rewards offered, and consider vendor-funded bonus points, where guests earn rewards for purchasing items in a promotion funded by consumer packaged goods (CPG) partners.
FUEL DISCOUNTS — Another common element in convenience store loyalty programs, fuel discounts offer member discounts per gallon of gas. Be creative to drive more interest and visits, as fuel discounts don’t have to be uniform. Offer three cents off per gallon, or consider a larger 10 cents off per gallon during the first month of membership to drive new signups. This is also a great reward to leverage with targeted offers that are not part of the published program.
CLUB PROGRAMS — Club programs motivate customers to visit and spend more, as customers work toward getting a free reward with offers like “buy 6 drinks, get the next one free.” Club programs have evolved from traditional punch cards by introducing easy-to-implement digital offers that allow tracking of customers’ behavior. Digital club programs can be automated, with reminders about customers’ standings and communications motivating customers to visit.
MEMBER PRICING — Consider offering popular items like coffee or soda at a lower price for members who use their loyalty account. This is an especially effective tactic for generating program sign-ups and everyday value for members. People naturally want to save on the items that they purchase regularly, and a small discount on high-profit items that you own, like drinks, will go a long way toward building loyalty. Member pricing can also open the door for additional vendor funding for CPG items.
SWEEPSTAKES — Convenience stores can use a sweepstakes element to reward members with automatic entries. Sweepstakes promotions allow members to buy products or redeem points to earn extra entries, incentivizing them to make more purchases. High-value sweepstakes promotions can bring a wow-factor to a rewards program, as c-stores build entire marketing campaigns around big-ticket prizes like travel vacations or a new car. While sweepstakes can drive increased awareness and excitement, it is important to implement other elements within this list since some customers will not be motivated by a sweepstakes alone.
TIERS — Creating different levels of membership adds depth and complexity to a rewards program and an element of status that motivates customers to take action. Build levels of advancement into your rewards program for customers to ascend to new tiers of escalating rewards based upon their visit and purchase frequency. Vary rewards by level to reward higher-value guests, and reset tiers monthly or at least quarterly to reassign status aligned to current behaviour. Be sure to clearly define and publish the tiers to avoid confusion, while incentivizing members to move up the tiers for better rewards.
A well-designed loyalty program can reinvigorate your brand, increase revenue, and improve profitability; however, the benefits and complexities of a rewards program come in nearly equal measure. While well-designed programs can’t be beaten when it comes to driving visits and incremental purchases, they are also incredibly difficult to successfully implement on your own.
Take time to plan, execute, and evaluate your customer relationship management tactics, and build your loyalty program to offer the rewards and bonuses that customers value. Leveraging these six elements to successful loyalty programs will draw more customer visits, but more importantly, a well-built program will provide insights about customer behaviour and demographics, allowing c-stores to continually assess and improve their programs to make more informed business decisions.