If there was one message to come out of Convenience Store Decisions' loyalty Webcast it's that there is a loyalty solution for everyone, regardless of chain size and the financial investment.

CSD's "Building and Integrating a Loyalty Program," part of its Online Roundtable Series, brought together multiple retailers, suppliers and industry experts to discuss the loyalty options currently available in the convenience store and petroleum market, and offered significant insight for operators struggling to find the right loyalty solution.

The Webcast was sponsored by Success Systems, Outsite Networks and Kick Back Rewards.

LOYALTY PROS & CONS

With the influx of technology that has saturated the market over the past decade, loyalty programs have become so accessible that any company can use them. But while these programs can be valuable in cultivating a new customer base, the programs aren't an instant remedy for low sales.

In fact, said Rick Ferguson, editorial director for COLLOQUY, a magazine dedicated to loyalty marketing programs, retailers typically don't make money with a loyalty program during the first year.

"Loyalty can be expensive and it will not fix a store's problems immediately," Ferguson said. He warned that too many retailers are launching loyalty programs simply because they've hit some sort of snag, such as losing customers to stiff competition.

The advantage of loyalty programs tends to be more long-term, such as observing customer behavior and then acting upon it. "If you can decipher the data a loyalty program yields and identify which customers are not profitable, but have the potential to be so, that could give you a strong boost to your bottom line," Ferguson said.

Savvy retailers are doing this by collecting and analyzing customer data to develop long-term, interactive relationships. These relationships are crucial to a loyalty program's success, and it's very much a give-and-take partnership. Retailers offer incentives to customers, such as coupons and merchandise, which leads to more customer visits and also provides historical market basket information.

MAKING THE PROGRAM YOURS
On top of giving customers a reason to visit the store, there are endless possibilities for promoting store services. Bruce Butler, president of Bridgeport Shell, has been using Success Systems' loyalty solution to give his small chain a competitive edge in a busy grab-and-go market. His stores began the program by attaching it to the coffee bar.

Not only has Butler found relief by retiring his "punch card" coffee program, he's also been able to track the other products coffee drinkers buy and offer them instant rewards for their loyalty.

"The customer buys a coffee and a coupon comes up immediately, delivering instant gratification," Butler said. Supplementing loyalty with promotions isn't the only way to benefit from faithful customers, said Doug Deweese, CEO of Conoco SuperStop! The company, which uses Outsite Networks, started selling membership tags once it realized it was giving away nearly 3,000 a month. The program has been wildly successful for SuperStop!, which calculates 30% of its customers participate in the loyalty program, with some stores topping more than 50%. Deweese has dedicated much of the chain's funds to continue growing the business.

"We diverted our advertising budget— well over $500,000 a year—to our rewards program," said Deweese. "This was a more reasonable way to target our customers and the general population."

Patrick J. Lewis, partner/CEO of Oasis Stop N' Go, took a different approach with his proprietary Kick Back Rewards program.

"In the beginning, we wanted to create an electronic loyalty program for our convenience stores only," Lewis said. "Instead, a coalition concept grew from that."

The program is fueled by what Lewis called "hard benefits" and "soft benefits." Hard benefits rewards users and retailers with promotions from vendor participation and club programs, as well as by giving members rebates and reward points. Soft benefits, such as prizes and sweepstakes, give members something to pique their interests to frequently return.

"With margins as thin as they are, we realized we were not going to be able to reward huge amounts to customers," said Lewis. "Instead, we use the soft benefits, which don't cost the store a lot, but still have a high perceived value to the members."