Almost every convenience and fuel retailer now has some form of a customer loyalty program, most powered by a Traditional Loyalty provider. In fact, loyalty programs have become so common that many convenience retailers spend up to 10% of their budget to run a loyalty program.
But launching and maintaining these programs comes with challenges - especially when you consider that roughly 69% of members will become inactive in the program, with 42% leaving it entirely.1
While a loyalty program can (and should) be profitable, Traditional Loyalty is mostly a cost center. To avoid costly errors, here are four steps retailers can take when looking to launch or relaunch a loyalty program as a true profit center:
Stop wasting time and money integrating multiple vendors that aren’t designed to work together
Loyalty vendors are often selected based solely on sticker price instead of the business outcomes the program will drive and total cost of ownership. What many retailers fail to realize is that not all vendors are created equal and many cannot power the end-to-end program . When this happens, retailers are forced to bring new vendors into the mix to fill in the gaps - increasing the total cost of loyalty and creating a disjointed user experience.
Choose a partner that powers all the capabilities your program needs to be successful. For example, a Mobile Payment Processing Application (MPPA), Electronic Age and Identity Verification (EAIV), CPG-funded offers, Tobacco Scan Data, online ordering, data analytics, employee loyalty, and so much more. Your loyalty partner should also provide a dedicated program manager to ensure you achieve the goals you set and provide strategic insight.
When you have access to one robust platform with dedicated program support, you make it easier for your business to manage and your customers to use. You won’t have to worry about coordinating different systems that aren’t built to work together or the time and cost of managing multiple vendors, your customers will have a seamless experience that further promotes loyalty.
Stop prioritizing features, start focusing on outcomes
Launching or relaunching a loyalty program can be a years-long endeavor. For the sake of your team and your loyalty provider, it is crucial to align on outcomes from the beginning. Outcomes will help you to prioritize capabilities within your program, ultimately saving you time and money.
Your outcomes can be as simple as acquiring more loyalty members, driving more loyalty transactions, and building bigger baskets. Depending on your business, you can make your outcomes as simple or complex as needed.
In the end, what really matters is choosing a vendor that can articulate how they will meet your objectives and how they can guarantee their claims.
Everyone talks about data, it’s time to start using it
Retailers have access to immense amounts of data, but struggle to take action on it in a way that changes consumer behavior. In fact, most retailers and loyalty providers still can’t determine who is purchasing their products and services. As a result, most are left delivering the same offers and experiences - spending money on members who would have already purchased the product.
You need to not only identify high opportunity members, but also deliver offers to target and capture the incremental opportunity. When you can leverage the data to create a holistic view of your member and design the right type of offers for the right customers, you ensure you’re optimizing spend and not wasting trade funds - increasing incremental purchases.
Ensure you’re receiving maximum CPG and tobacco vendor funding, not getting taxed by a 3rd party
While it’s common for most loyalty providers to source vendor funding for retailers, it’s also common for them to take a significant percentage of those funds off the top. It’s important to do your research and make sure funds are being fully allocated towards your program. You should also ensure that your loyalty provider can support all tiers of tobacco manufacturer digital trade programs, to unlock maximum funds.
CPG and Tobacco vendors have money to spend in the convenience channel, but they need to see the value before they partner with a retailer. To do this, you need an intelligent and data-driven loyalty program that allows CPGs to reach the right members by targeting based on a variety of attributes: where they shop, what they buy, what time of day they buy, what brands they buy, and how much they spend.
Knowing these attributes allows CPGs to deliver hyper-targeted offers that drive members from the pump to the store and increase share of wallet. By demonstrating that your loyalty program can achieve the desired outcomes of CPG brands, retailers can form partnerships that fund valuable programs.
Launching a loyalty program isn’t for the faint of heart, which is why it’s crucial to invest in a partner who is invested in you and your business outcomes. Stuzo is an end-to-end provider that powers the entire loyalty journey for your business and customers. We create a seamless user experience that guarantees a 50% increase in loyalty members and a 50% increase in loyalty transactions when you make the switch from Traditional Loyalty to Stuzo.
Whether you’re launching a program from the ground up or relaunching an existing program, get in touch to learn why Stuzo is the partner for you.