8 Ways to Execute Smart Loyalty Campaigns
By Roger L. Brooks
Exclusively for Jeebster (This article originally appeared in NACS Magazine)
In any industry, top performers typically put great pressure on themselves to stay ahead or just keep pace with the competition. In recent years, bigger and better was the way to stay on top, but unless your pockets were bottomless, many found it exceptionally difficult to succeed on size.
Take loyalty programs, for example. Retailers that can’t compete on size alone are now able to contend with the bigger chains by gathering historical data and intelligence about their customers. This practice enables the smaller operators to compete in a more calculated and tactical fashion.
More recently, a need to perform smarter, faster and “in-the-now” has taken hold in the loyalty community. This new trend — “smart loyalty”— is flourishing in small pockets around the globe in convenience stores of all brands and sizes.
Smart loyalty’s focus is on mining customer data across all segments while providing a tool to level the playing field for all.
If you’re uncertain about initiating a customer loyalty strategy, you are not alone. Many companies struggle with the decision as they navigate through uncharted waters trying to grasp the intricacies of such programs.
Loyalty programs can be intimidating for those with little experience or knowledge on how to implement campaigns to motivate customer behavior. Besides, you’re already working your darnedest to pump more gallons and sell more snacks. So how can you find the time to gather information about your customers and their spending habits?
As you mull that over, also consider your critical advantage: Convenience stores are the lucky recipients of a steady flow of traffic — a critical element in any successful loyalty program. Many businesses struggle to get foot traffic in the door. You already have that foot traffic, so now your challenge is identifying who exactly fills those shoes — on an ongoing basis.
Capturing relevant data when customers enroll in your program is essential in keeping open a direct line of communication with them. This will also provide you with the ability to promote integrated loyalty campaigns to an unlimited number of customer segments.
The primary method for initially identifying customers is to assign a unique loyalty card or phone number to each person when they first sign up.
As time passes and your loyalty customers begin to identify themselves, you’ll be able to track what they buy, how often they buy and how much they spend on an average transaction. You’ll also get to know your top-tier, bottom-tier and every customer tier in between.
As you build your customer database — typically 1,500 to 5,000 customers per store in a mature program — you can weave together all your information into new and existing touch points: pump displays, POS readers, receipt messaging, texting and e-mail to name a few. When you deliver communications from multiple sources, the probability that your campaigns will succeed becomes greater.
Below are eight ways to execute smart-loyalty campaigns — implemented with help from multiple touch points and customer data:
1. Fuel-Only Campaign
It’s a constant game of tug-a-war to get the customer inside your store. So here’s a helpful hint: If you repeatedly incentivize fuel-only customers to step inside for a compelling offer, you will move the needle. Offer a high-margin product, such as a free cup of coffee or fountain drink, through a pump display message, and you can count on converting a decent percentage (10 to 20 percent) per campaign to becoming combination customers (fuel and in-store). The better the offer, the greater the conversion.
Keep in mind, the campaign is not one-and-done; it’s never done — meaning you need to run the campaign to fuel-only customers on a recurring basis.
2. Idle Customer Campaign
After you accumulate adequate historical data (three to six months minimum), you can begin to identify those customers who pulled a Houdini. Because you captured the elusive customer’s e-mail address and cell phone number at the time of enrollment (through an opt-in process), you can communicate with them directly in an attempt to bring them back.
The magic lies in the creativity of your offer and being unassuming in the process. You’ll likely test a variety of promotions until you find one or multiple campaigns that successfully promote their return.
3. Frequent Customer Campaign
You all have those customers with tunnel vision — they come in every day and buy no more than a newspaper and coffee. Although they are the frequenters, the challenge is to shake them out of their routine. They are buying milk, water and bread somewhere other than your store. Talk to them at the associate level and through receipt messaging, and open their eyes to your entire store.
In addition, provide customer service training so your employees are prompted by the point-of-sale device to identify opportunities to engage with customers. Also, set your POS systems up to trigger receipt messaging when the campaign speaks to the target segment. For example, receipt message could read, “Receive $1.00 off any 8.5 oz. bag of chips.” Assign a short-term expiration date, such as one week, and this campaign will prompt a portion of those customers to take action on the promotion.
4. Top-Tier Customer Campaign
If you think your top customers are maxed-out, think again. Top-tier customers are highly probable candidates to respond to promotions, as they statistically buy more frequently, spend more per visit and select more items per transaction. They typically have more disposable income available and will likely buy a pack of gum, bottle of water or even windshield washer fluid — if they’re asked. Furthermore, top customers are aiming to reach their rewards thresholds quicker, and/or take pride in seeing their points reward options grow. The effect of loyalty runs deep at the top-tier level, so extra attention should be given to these customers.
5. Cross Product Campaign
Start with the basics. Create an e-mail campaign to motivate customers to purchase a product outside of a category, but complementary to the basket. If the customer only buys a fountain drink, provide an incentive to add a bag of chips, hot dog or candy bar. Work with your margins, but also make the campaign worth their while.
6. Text Message Campaign
This tool can be used in a variety of ways. Get creative and start a promotion such as “2:00 Text Tuesdays” to drive traffic during slower dayparts (i.e., 2:00 pm to 4:00 pm). Choose a different product or different location each week to run a targeted fuel or foodservice promotion to your entire opt-in database. This will create excitement and customers will begin to look forward to receiving your text each week.
7. E-Statement Campaign
On the first of each month, send an e-statement to your loyalty customers with a summary of their purchases and reward earnings from the previous month. Work with your vendors, and provide one or multiple promotions within the statement to attract new business. In addition, offer a refer-a-friend perk in the statement itself.
8. Social Network Campaign
If you haven’t jumped into social networking (Facebook, Twitter, YouTube) yet, consider it a priority and a perfect tiein to your loyalty strategy. Social networks are one of those new touch points where many companies are seeing staggering results. This type of campaign will allow you to connect to an audience you may not typically reach. Be sure to send consistent and relative posts that your customers can respond to with their own comments. Inspiring their engagement is key.
So many loyalty campaign best practices take place behind the scenes, in a one-to-one fashion and in real-time. Customers have come to expect these more personal conversations and connections with retailers.
The customer data you collect can be advantageous if you truly uncover the identity of the people who really fill those shoes. It can also be your first chance to grow your business in a strategic and discreet way, without putting every offer or incentive out on the street.
Think of the venture as your company’s powerful little secret, and your secret is safe with me.
Roger L. Brooks is the author of The Power of Loyalty: 10 Essential Steps to Build a Successful Customer Loyalty Strategy. He can be reached at (607) 584-5109 or at firstname.lastname@example.org.