Whether the scope of a prospective loyalty package is small, medium or extra-large, ensure it includes everything to meet your needs.
By Pat Pape, Contributing Editor
Retail loyalty programs come in a variety of sizes, but there is only one goal: to keep customers returning to the store and buying more products. Whether you prefer the small, medium or super-sized loyalty program, you can make it work for your convenience store operation.
On one side of the scale, Beaverton, Ore.-based Plaid Pantry, a chain of 104 stores in Oregon and five in Washington state, launched its petite program two years ago.
“We weren’t sold on a loyalty program because we’d heard mixed things, so the whole idea behind this was to dip our toe in the water,” said Jonathan Polonsky, Plaid Pantry’s chief operating officer. “We weren’t ready to dedicate a person to it or spend thousands of dollars developing a program. We did it just to be in the game.”
One of the company’s main goals was to attract new, younger customers, who rely on mobile technology every day, so Plaid Pantry worked with technology provider Verge Connect of Henderson, N.C., to create a smartphone app that allows customers to sign up and then play games to earn points.
“You come into our store and open up the app,” Polonsky said. “There is a button that pops up because it knows you’re in a store. You check in and earn a game play. You accumulate game plays for points, and the points can be exchanged for a dollar off a soft drink or coffee.”
Among the app’s other benefits, it lets shoppers keep an eye on their favorite categories, such as candy or soft drinks, and notifies them when products are discounted. And despite the fact that Plaid Pantry has a customer service department with a toll-free number, shoppers often provide their feedback via the app.
“I get feedback almost every day,” Polonsky said. “Somebody will say something positive or someone will ask how to redeem his or her points. Our 800-number is posted in every store, but a lot of people like this path.
“To turn a blind eye to loyalty is a mistake,” Polonsky said. “But we don’t want to be on the leading edge of technology. We don’t want to be the guinea pig.”
KICKBACK AND RELAX
When the 14-store Rattlers convenience chain of College Station, Texas, wanted a customer loyalty program, Owner Jim Kolkhorst turned to KickBack Rewards Systems, the Twin Falls, Idaho organization that helps retailers reward faithful customers while gaining insight into their shopping habits.
“We wanted a loyalty program, and we had enough information about what it would cost,” said Kolkhorst. “I don’t think you can cost-effectively create your own loyalty program that would have the features that ours has. That would cost a fortune. The KickBack guys came in with their equipment and loaded it into our system. You just bring your checkbook.”
Since the c-store adopted the platform three years ago, Rattlers’ team customized the KickBack platform to meet their specific needs and called it Rattlers Rewards. Customers sign up and receive a card that they swipe with every purchase. They earn two points for each dollar spent inside the store or for every gallon of fuel they pump. One point is equivalent to a penny. A customer with 500 points can redeem up to $5 on a store product. According to Kolkhorst, customers love it.
“It is a way for them to generate additional revenue for purchases they make at our locations,” Kolkhorst said. “Obviously, there is a lot of training involved with your people regarding how the system works and how to sell it to your customers. But in terms of the simplicity of the system, it was pretty seamless.”
A c-store rewards program is pricey to implement and costly to operate, Kolkhorst added.
“Anyone who has a rewards program knows that these are expensive programs, because you are giving away a couple of cents for every dollar in sales,” Kolkhorst said. “But it creates more loyal customers who think twice about using your competitor. Loyal customers know the next time they go to your store their pizza is free or they are going to get another fountain drink or they’ve got $12.25 on their card and they aren’t going to give that up.”
The program succeeds because his company’s same-store sales over the last few years have continued to increase, even “when our vendors have told us that similarly situated convenience stores have not seen an increase in sales,” Kolkhorst said. “So what do you attribute that to? Better operations? We like to think we are better operators than our competitors, but it’s got to be partially due to our loyalty program.”
SUPER SIZE IT
For 12 years, Maverik, a Salt Lake City, Utah-based chain with 277 locations in 10 states, had a loyalty program that rewarded shoppers with points every time they made a purchase.
“Customers had to collect 500 points in a single quarter to earn a $5 gift card that was then mailed to them,” said Ernie Harker, executive director of marketing. “Some customers disengaged because they never earned enough points in a quarter to get a reward.”
In 2010, the Maverik IT department began working to create a proprietary rewards program connected to the company’s point-of-sale (POS) system.
“If I’d known the blood, sweat and tears it would take to develop it in house, I might not have done it,” said Harker. “I’m glad I didn’t know.”
There are two levels of Maverik loyalty. The first is the Adventure Club, which includes a card that is swiped at the time of purchase. The system keeps track of all purchases and gives the customer a two-cent discount on each gallon of fuel.
The second is the Nytro Card, a private debit card that can be used only at Maverick locations. It gives the holder six-cents off each gallon. Both programs can be managed with a smartphone app that also helps locate stores and check fuel prices, while offering deals and discounts.
“It’s very sophisticated,” Harker said. “You have the entire loyalty program in the palm of your hand.”
Customers collect points valued at one cent each, and can log into their accounts to spend them online. The points can buy Maverik merchandise, including logo t-shirts and hats, or customers can actually give their points to a charity, a donation that Maverick matches. All participating charities must be pre-approved by the company’s marketing department and must be able to promote the program in some way, such as through a Facebook page or a Website.
“In order for the charity to retain membership, they must receive $100 in [donations in] a calendar year,” said Harker. “They can use it any way they want. The points add up quickly and a favorite charity could get a check for $1,000 at the end of the year.”
The points may also be used to enter the annual Maverick raffle, which does not skimp on prizes. “In 2014, we gave away a truck and a boat, and we’ll do that again this year in partnership with Mountain Dew,” Harker said.
A few years ago, the chain’s grand prize was a $300,000 Lamborghini Murciélago. The high-performance car was won by a father of six, who drove it for five hours before totaling it in a field. No one was injured and the winner used the insurance payout to buy a truck.
Likewise, with the growing number of loyalty platform options, from flashier programs to more reserved choices, c-stores today can find one that best benefits their business.