Most convenience stores share similar reasons for having a reward program – such as improving profitability and enticing customers to make incremental sales – but all reward programs are not created equal, and a one-size-fits-all approach may not produce the outcomes that retailers want.
With 72% of U.S. adults using a smartphone, mobile technology is changing the way that brands connect with their customers. Most brands have started to roll out a mobile strategy that utilizes an app. The average smartphone user has around twenty-seven apps on their phone, but studies show that most users spend 80% of their smartphone usage on just five apps. What are the odds that your app would be one of those? That leaves only 20% of their usage time for apps outside of those five, meaning your app is competing with over twenty apps for the user’s attention.
The good news, a mobile strategy goes far beyond just your mobile app. By utilizing a full mobile strategy your brand can get to the forefront of your customers’ minds. So, beyond a mobile app, what other elements of a mobile strategy can your brand implement to engage customers and motivate them to come into your store? […]
Do you need to reinvigorate your brand, increase revenue, and improve profitability? Upgrading your rewards program may help. However, proceed with caution. Upgrade only when you know the new program will better align the program with corporate strategic goals and likely produce large financial benefits.
There is never a perfect time to change your program. When clear signs arise, give a program upgrade serious consideration. Look for any of these four signs:
1. Declining loyalty penetration and new member enrollment. If the share of checks associated with your loyalty program is declining, it could signify that tenured members are lapsing and that the program is no longer motivating them to come in. If new member enrollment is down, it could be because new guests are not interested in the program or that team members in the store have stopped promoting it.
Your program should achieve a minimum of 15 percent loyalty penetration. This means at least 15 percent of your checks should be associated with the loyalty program, and according to many top brands, their loyalty penetration numbers far exceed the 15 percent benchmark. For example, in an July 2016 earnings call, Panera president Drew Madsen said that 50 percent of company transactions were associated with the My Panera program. If you notice your loyalty penetration rate dropping, and particularly if it dips below 15 percent, it may be time for a change.
2. Evidence that customers are “gaming” the program to their advantage. Have customers figured out a loophole in your program that they use to their advantage? Is your visit-based program increasing the number of split checks, and slowing down operations? Are customers buying low-priced items to earn points, and then redeeming them for expensive items? […]
Think back to your last marketing meeting. What kinds of conversations did you have? Did you discuss with your team how to sell more fountain drinks, how to get more chips out of the store, or how to launch that new coffee program? Maybe you talked about how to get more people to buy gas AND go into the store.
These are important conversations to have about how you’re ultimately going to sell more products, but this way of thinking is “category centric.” You’re concerned about how to get certain items off the shelves instead of how to get certain customers into your stores.
Imagine you decide to run a “Buy 2 Cans of Coca-Cola and Get 1 Free” promotion. Coca-Cola cares about one thing – getting their product into the hands of more people. And if you’re category centric, as most convenience store marketers have been for years, that’s probably all you’re focusing on too. Let’s say you decide to blast this Coke promotion to all of your customers, because you know that the more people you send this to, the more people will come into the store to take advantage of the deal.
The Results…at First Glance
There’s a reason why sending a mass email blast is so appealing. Here’s an example of a target and control […]