Loyalty programs used to be a punch card and a phone number. But while physical cards have been generally replaced by mobile apps, the importance of loyalty programs remains.
“Having a loyalty program is a way to direct market to consumers, and most retailers have a measurable difference in visits and basket size for customers that are part of a loyalty program than those that are not,” said Peter Rasmussen, CEO of Convenience and Energy Advisors.
Convenience stores are well-suited to loyalty programs because of their existing customer base.
“C-stores have an advantage in capturing consumer loyalty as we are one of few industries that people frequent multiple times a week to grab their everyday essentials,” said Jon Bunch, director of marketing and business development at Huck’s Market, which recently launched a new loyalty program across its more than 100 locations in Illinois, Indiana, Missouri, Kentucky and Tennessee.
Huck’s chose to develop an app-only program to attract customers more accurately and more frequently.
“The key driver for launching a loyalty program was building a connection between the brand and our customers where we could easily deliver value and reward our most loyal customers and increase customer lifetime value,” Bunch said.
Building that connection meant bringing in technology to meet customers where, when and how they want to be met.
“Leaders are finding ways to augment traditional loyalty cards with QR codes and near field communication (NFC) features,” said Perry Kramer, managing partner of Retail Consulting Partners, a retail management consulting firm. “The customer may forget or misplace their loyalty card, but they rarely forget their phone. This is a key component of digitizing loyalty.”
But to work properly, loyalty programs need to focus on 1-to-1 marketing, not one-size-fits-all.
“Gone are the acceptable days where the app sent out a free cup of coffee for your birthday,” Rasmussen said. “The future is continued efforts on personalization, creating a deeper connection with consumers and having ways to direct-market to them.”
Other trends include gamification and ordering.
“Gaming is becoming a growing piece — somebody can play a proprietary game on an app and can earn points or free products,” Rasmussen said. “We’re starting to see subscription services like coffee and integration of ordering where you could have the ability to order on the app.”
Whether you choose an app or physical card, the main advice for building a loyalty program is to make it personal.
“Loyalty programs are here to stay and will continue to grow,” Kramer said. “The more successful and personalized loyalty programs become the more they will become ingrained in consumers’ daily routines.”