When it comes to customer loyalty, a few business verticals are known for their heroic efforts — airlines, grocery stores, and even coffee shops (with Starbucks as the shining example). However, convenience stores haven’t done a good job of building customer loyalty, even though they could benefit immensely from customer retention.
C-Stores are unlike any other business.
Even as falling gas prices and improving economic conditions drove increased convenience store sales last year, rare is the c-store chain that has taken a proactive approach in gathering customer data, launching retention marketing campaigns, and building true customer loyalty. In the spirit of heeding the cautionary tale of Chipotle (the company who failed to invest in loyalty while times were good, and then couldn’t win back business when things turned sour), let’s explore five ways in which C-stores are failing to inspire loyalty in their customers.
Lack of data: Who are your top customers? How frequently do they come in? As other retailers begin to modernize and collect data as a matter of doing business, c-stores typically don’t invest in understanding who their customers are, or collecting the transactional data that could help drive business intelligence. Instead, communication is blasted to all shoppers indiscriminately, and operators rely heavily on discounting product to drive increased traffic.
Instead of leaving critical business to guesswork, start collecting customer data in order to understand where your revenue is coming from and communicate to these customers appropriately.
Too much discounting: Customers don’t want to be blasted with impersonal discounts and offers; they want relevant messaging and timely communication, with offers that speak to how they shop. Instead of trying to lure customers in with deals on soda and CPG coupons, start thinking more about long-term goals rather than one-time discounts. Coupons bring a discount-seeking shopper in once; instead, focus on motivating low-frequency customers to come in more frequently and spend more over their lifetime.
Rather than relying on discounting goods and competing on price, compete on service and build true affinity for your brand among consumers. Communicate with customers and keep your brand top-of-mind in order to drive those repeat visits.
Disconnect between gas and retail customers: Converting a gas-only customer to a loyal convenience store shopper is a valuable behavior to incentivize — but most c-store loyalty programs totally ignore what’s happening at the pump. Instead, connect your loyalty program to gas to capitalize on the transaction that’s already happening. Use their previous purchase drive them towards their next purchase by making sure your loyalty program can capture data from both inside the c-store and at the pump.
One way to do this is to implement a card-based loyalty program, where customers engage simply by paying as usual. In a program that takes gas purchases into account, incremental convenience purchases are incentivized, and you address a more holistic version of how that customer shops.
Complicated loyalty programs: Making customers scan their phones, enter their phone numbers when they transact, or take any additional action is unsustainable in the convenience store segment. It IS a convenience store, after all... brands that have inconvenient customer-facing programs are doomed to fail in light of their own irony.
Think about who your customers are, why they’re coming in, and what they’re looking for. Design a program that complements how your customers actually behave. This might mean reevaluating how your customers interact with the program — nothing that requires additional steps and lots of time will work.
At Thanx, our program was designed to be low-touch for both merchants and consumers. That's why we're the perfect tech solution for C-stores looking for better data, more repeat customers, and increased same store sales.