Creating a Rewarding Retail Experience

loyaltyPaper punch cards are a thing of the past. Today’s loyalty programs incorporate a variety of innovative strategies to persuade customers to spend more time—and money—in your stores.

By Marilyn Odesser-Torpey, Associate Editor.

Sometimes you think you know what your customers want, but you really don’t know until you ask…and listen. That’s what Salt Lake City-based Maverik c-stores found out about the Adventure Club loyalty rewards program the company had been using for almost a dozen years.

Customers were awarded points for gallons of gasoline purchased or dollars spent inside the stores. After a certain number of points were accumulated, customers could redeem them for gift cards that could be used to purchase fuel or store items. Points also earned customers entry into sweepstakes for prizes that could be as large and valuable as a Lamborghini.

“After talking directly to customers in our stores for more than a year and listening to what they were saying when they called our customer service people, we discovered that not everyone wanted a Lamborghini. Many customers wanted more immediate benefits from their cards,” said Ernie Harker, executive director of CREATE (Culture, Research, Events, Advertising, Themeing and Excitement) and brand manager at Maverik, which is Convenience Store Decisions’ 2013 Convenience Store Chain of the Year.

Last February, Maverik, which has 257 stores in 10 Western states, launched a new, two-level loyalty program featuring Chrome and Black Adventure Club cards, each of which has its own set of rewards and other special membership perks.

With a Chrome Card, which can be used with or without a digital app, members get an immediate two cents off every gallon of gas they purchase. It also works as a virtual punch card, rewarding multiple purchases with free items. 

Card users also earn Trail Points with their purchases. Right now, these points can be redeemed in either of two ways. Customers can “Win Stuff” by entering sweepstakes with their points or they can “Buy Stuff” from Maverik’s collection of proprietary merchandise that ranges from gift cards and shirts to travel coffee mugs and a utility knife. Soon they will have a third option enabling them to be able to “Give Stuff” by donating their Trail Points to their choice of non-profit groups to which Maverik will make cash donations. Customers can allocate as many points as they wish to each redemption category. Harker expects the “Give Stuff” option to be a big win/win for both Maverik and the community.

Recently, customers were invited to donate their Trail Points to a tornado relief effort in Oklahoma and, as a result, close to 70,000 Trail Points were donated, resulting in Maverik presenting a check for $700 to the Red Cross.
 
Savings All Around
Members of the premium Black Card program get an instant six cent discount on gas purchases and a Competitive Price Match guarantee that will match the pump price of any qualified local competitor. Card users also earn punches, but get double the Trail Points (on Tuesdays the points earned from in-store purchases are tripled) to redeem to “Win Stuff,” “Buy Stuff” and soon “Give Stuff.” 

The Black Card is also a debit card that draws funds from the customer’s account to pay for each purchase. In addition to providing a high level of convenience for the customer, the debit card pays off in big dividends to Maverik.

“The basket for the average Black debit card transaction is about 79 cents more than for the Chrome Card holder and for fuel, Black Card holders average three gallons more per fill-up,” Harker said. “We’ve also saved at least $250,000 in swipe fees to date from mid-February.”

As of early September, Maverik has more than 161,300 Chrome Card members and slightly more than 42,400 Black Card members. About 20% of the Adventure Cards have been used at least once since they have been activated.

Each day, about 750 customers activate their cards, meaning that they go online and enter their personal information into the system. Card activation is required to spend Trail Points and participate in the “Punch-It” virtual punch card program.

Maverik is aggressively promoting the Adventure Card Reward Program in-store as well as externally through billboards, radio and television and through social media. Since the new Chrome and Black Adventure Card program began in February, 94 million points have been earned and 14 million spent, Harker noted. Also, 1.4 million punches have been earned and over 119,000 fountain drinks given away.

Sweepstakes can be as short as a week or as long as several months. Prizes can range from tickets to a sporting event or a $1,000 shopping spree to a trip to NASCAR or Fiji to a Yamaha Motorcycle, Sierra RV Trailer or Chevy Silverado. Almost all of the prizes are provided by Maverik’s vendors and suppliers. “The average this year is 20 winners a month,” Harker said.

Loyalty Kicks In
In its ongoing effort to drive new and repeat business, Rattlers Convenience Stores in July rolled out Rattlers Rewards, a new loyalty program designed in partnership with KickBack Rewards.

“We have studied the impact or perceived impact on consumer behavior that loyalty provides for several years. Over time, we became convinced that this impact is real and that Rattlers needed to develop our own program,” said Jim Kolkhorst, CEO of Kolkhorst Petroleum Co. Inc., which operates Rattlers Convenience Stores. “The KickBack system allowed us to do this with our own proprietary card. This is one more real differentiation that Rattlers can provide to our customers that many of our competitors are not going to spend the money to offer.”

Kolkhorst Petroleum operates 13 Rattlers convenience stores across the Brazos Valley in Texas with three separate fuel partners. Rattlers Rewards is available at all of its Exxon, Shell and Valero branded locations.

“Each of these brands has their own loyalty program, but it was our company’s contention that it was better for us to market one loyalty program, Rattlers Rewards, than to try to market three separate programs to our customers,” Kolkhorst said. “We went with KickBack Rewards because they were very easy to work with and the rollout was fairly smooth for a business transition of this size.”

The early results indicate that the Rattlers Rewards program has been very well received by customers. “Our future success is contingent on us continuing to market the program so that the customer will see the full value of what we are offering to them,” Kolkhorst said. “However, most of our customers are familiar with loyalty and appreciate the savings that Rattlers Rewards can bring to them.”

KickBack’s unique approach to loyalty marketing quickly provided results for these stores, which includes marketing, payment technology, forming coalitions, customer relationship management through using transaction data more effectively and even social media integration.Listening to Customers

Like Rattlers, Bobby & Steve’s Auto World in July introduced its highly-anticipated loyalty program—World Rewards.

The World Rewards program, also powered by KickBack Rewards Systems, was created as a loyalty platform to help consumers earn savings on fuel sales. But it offers so much more. World Rewards recognizes its members with a broad selection of deals and ways to earn “points” to use toward purchases at the company’s eight convenience stores in Minnesota.

“Our advocates are asking for a loyalty program, and we are answering in a big way,” said Jared Scheeler, director of convenience store operations for Bobby & Steve’s. “We are known for our great service, and World Rewards provides us with the opportunity to thank our advocates instantly, and encourage them to make Bobby & Steve’s Auto World their one-stop shop.”

Bobby & Steve’s Auto World’s World Rewards program offers unique discounts on fuel, as well as the opportunity to earn points on purchases made in the convenience stores, at the foodservice counter or on automotive repairs.

Loyal advocates will receive discounts on numerous items, such as coffee, doughnuts, oil changes and more. Plus, the card will include a “club” component that will allow customers to earn discounts and giveaways on items like milk, coffee and dispensed beverages.

“We believe that World Rewards is a unique program to the convenience industry because the program allows members to quickly earn large amounts of points by utilizing our auto repair facilities,” Scheeler said.

Over the next few months, World Rewards will also begin to incorporate ACH debit, allowing customers to earn even greater fuel discounts while saving the company money on costly credit card fees.

Smart Loyalty
In late June, Portland, Ore.-based Plaid Pantries Inc., introduced a new loyalty program based on its first customer smartphone app, which was designed in conjunction with Verge Connect, a software platform developer. With the app, customers can choose the promotions and coupons they want to receive and have them sent directly to their iPhone or Android device. Customers earn points when they use the app and can also win free products by playing games on it.

Points can also be redeemed for free fountain drinks and coffee. The company’s marketing department is also working with vendors and suppliers to develop partnerships that will help offset some of the cost of the giveaways.

“We expect that down the road when we have a larger installed base that vendors will be coming to us to be included because a place on our app will be high value real estate,” said Jonathan Polonsky, executive vice president of the 109-unit chain.

“The penetration of smartphones is pretty deep now and what we heard when we did our due diligence about offering an app was that it is easy to get people to download one, but a challenge to keep them coming back and using it again and again,” Polonsky said. “We feel that with this loyalty program we can give them the incentive to constantly use the app and build an even stronger connection with our customers.”

At the same time, the app notifies customers about when certain products are available at special promotional prices. Customers can choose to receive notifications from their choice of various categories such as candy, snacks and energy drinks. They may select some or all of the categories.

As of early September, about 700 customers had downloaded Plaid Pantry’s app.

“Our reason for doing an app is to expose Plaid Pantry to a new customer base we may have been missing—a younger customer base,” Polonsky said. “We knew that if we didn’t jump in we would be left behind.”

Plaid Pantry is also exploring the possibility of utilizing a capability of the app called “geofencing.”

“Using the phone’s GPS, it can identify whether a consumer is within a certain perimeter of one of our stores and then automatically notify that customer about special items or deals available in that store,” Polonsky explained. “It can also identify when the customer is within a certain perimeter of one of our competitor’s stores, so it can notify that customer about special items or deals available at the nearest Plaid Pantry store.”

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