Feeding Off the Power of Loyalty

The real-time data and consumer insights provided by loyalty programs can boost marketing efforts and improve foodservice category sales

By Angela Hanson

OVER THE PAST TWO YEARS, the convenience store industry has shifted from an early interest in mobile ordering to a widespread adoption of digital services. Many c-store retailers are scrambling to catch up — but as they do, it is critical that they not overlook the advantages of a not-so-new concept: loyalty programs.

When paired with new investments in technology, loyalty programs can do a lot to help c-store operators move the needle, particularly when it comes to foodservice category sales. One of the key benefits is their ability to incentivize trial of new items.

“Pilot Flying J is always innovating our foodservice program to expand our menu offerings and provide our guests with fresh, seasonal flavors. As we continue to introduce new foods, the myRewards Plus app and our loyalty program provide an opportunity to feature those products and encourage trial through in-app offers or redemption of points,” said Steven Root, director of loyalty CRM for Knoxville, Tenn.-based Pilot Co., which operates more than 750 travel centers in 44 states.

The success rate of such offers improves even further when programs take individual customer data into account. The true value of loyalty comes from analyzing a customer’s purchasing history through integrated point-of-sale data — right down to individual SKUs, according to Lori Stout, vice president of marketing at customer loyalty and engagement solutions provider Punchh.

“As you aggregate data and build a more complete view of the customer, you can then use AI [artificial intelligence] to make predictions about future buying behaviors,” Stout said. “This is especially helpful for the foodservice category, as it becomes much easier to pinpoint and deliver offers that will resonate with that customer.”

Examples include sending a new breakfast burrito offer to a customer who regularly purchases breakfast burritos, or sending a pizza-and-breadsticks combo deal to a customer who may not be a regular pizza buyer but always stops to buy fuel on Fridays.

“Once you connect loyalty to the various touchpoints where your customer interacts with you, the possibilities are virtually endless when it comes to creating personalized, timely foodservice offers that will resonate,” Stout added.

This data, however, is only as good and usable as retailers set it up to be. Many legacy loyalty programs lack connection to the point-of-sale (POS) system, fuel pumps and other relevant systems. In the c-store ecosystem, everything affects everything else.

digital loyalty journey start with one integrated touchpoint, such as the POS, and then use that touchpoint to begin analyzing the purchasing history and behavioral patterns of certain guest segments.

“Do you have a group of customers that purchase a cup of coffee every morning? Send that segment an offer for a bakery item,” she suggests. “Do you know, from receipt tagging data, that a certain customer purchases only vegetarian options? Send them an offer for your new plantbased breakfast sandwich.”

The key is to plan carefully beyond the data-gathering stage.

“For most retailers, the issue isn’t having enough data; it’s knowing what to do with the data they have. This is where thoughtful segmentation and integration to key touchpoints turn that data into a competitive differentiator for the brand and a better experience for the customer,” she explained. “Choose a loyalty provider that can help design and scale a loyalty strategy that reflects the unique goals and KPIs of the brand.”

“In addition to fresh, hot, quality and craveable food, customers expect personalized, relevant offers from an efficient loyalty program, which goes beyond transactional rewards.”

— Raghu Mahadevan, 7-Eleven Inc.

Making Loyalty Programs More Effective

C-store retailers must keep in mind that the loyalty program itself may need to evolve alongside consumer demands and changes in technology. In spring 2021, Pilot launched the revamped myRewards Plus app to make the experience more seamless as consumers increasingly move to digital. The company still offers a legacy program, but a physical card is no longer required. Catering to specific larger customer segments can achieve dividends. For instance, Pilot’s loyalty program caters to both regular drivers who may just be passing through, and professional drivers who eat most of their meals on the road.

“Guests can also switch [app] profiles as they travel based upon their mode of transportation, changing to an RV profile, for example, if they are needing to find RV-friendly stops and amenities,” Root said. “Once ‘inside’ the app, guests are delivered tailored features and rewards that matter to their experience and needs. As an example, professional drivers are able to earn points with tiered rewards, which they can spend in-store on food, beverages and merchandise. We are also able to customize special promotions for our customer segments, such as offers just for professional drivers during Driver Appreciation Month in September.”

For 7-Eleven Inc., its 7Rewards loyalty program launched in 2015 as a way for customers to earn free beverages. Today, it touches nearly everything the Irving, Texas-based retailer does from a digital perspective — mobile checkout, 7-Eleven Wallet, fuel loyalty, and the 7NOW delivery program.

“We see the 7Rewards loyalty program as a win-win for both customers and for the stores,” said Raghu Mahadevan, senior vice president and chief digital officer. “When customers participate in 7Rewards, we learn more about what they want. That means we can personalize their experiences and reward them with contextual, relevant offers that are meaningful to them.”

As a result, 7-Eleven has found that customers who use the 7-Eleven app — which includes the 7Rewards program, the digital wallet, and mobile checkout — shop two more times per month than those who don’t.

The benefits offered through a loyalty program can range from banked points to BOGO deals and beyond. Which reward structures make the best fit for a c-store brand can vary, but there’s one thing operators must include if they want to give their foodservice program the biggest boost possible: customization.

Customers who use the 7-Eleven app shop two more times per month than those who don’t.

“Today’s consumer doesn’t just appreciate customization, they expect it,” Stout said. “One-size-fits-all loyalty programs are antiquated and ineffective.”

The Right Reward for the Right Customer

It isn’t the size of the reward that matters as much as how well the reward fits into the customer’s purchase preferences.

“In addition to fresh, hot, quality and craveable food, customers expect personalized, relevant offers from an efficient loyalty program, which goes beyond transactional rewards,” said Mahadevan. “Customers engage with brands on a variety of platforms, devices and channels — and they expect each one of them to work together seamlessly.”

Many loyalty program members want to be able to share their rewards with family and friends, or use their rewards to participate in social causes.

According to Mahadevan, loyalty was a key aspect of 7-Eleven’s recent campaign with the nonprofit Feeding America. Driven through the 7-Eleven app and 7Rewards program, the campaign helped provide millions of meals to families facing hunger.

“The promotion drove positive reactions from our customers and directly impacted their shopping behavior. Over two-thirds of polled 7Rewards members stated they took incremental action to participate in the promotion, including over a third which shopped more frequently and bought more items to participate,” he said. “During the promotion period, the number of customers using our loyalty app and scanning it at checkout increased from the prior period to the highest levels in over a year. Loyalty transactions also increased as a percentage of total transactions despite overall traffic levels increasing in our stores.”

Loyalty programs should vary in structure based on the strategic goals of a company.

At Pilot, myRewards Plus members benefit from a tiered points program that gives them more value for the more fuel they purchase. This system could also be applied to frequent customers who stop in regularly for coffee, snacks or meal purchases.

“We’ve received a ton of positive feedback since launching our new program in the myRewards Plus app,” Root said. “More pro drivers are activating the tiered points program in the app every month and are seeing how much more value they get after fueling only six times.”

Many retailers assume that an effective loyalty program requires heavy discounts, but that isn’t the case, according to Stout. Consumers enjoy and respond to “surprise and delight” offers. It’s also important to them that the brand knows and understands them.

“Segmentation is the foundation for more effective and personalized marketing opportunities that drive higher lifetime loyalty and value with the customer, but that don’t erode the profitability of the brand,” she said. “As more brands are exploring expanded foodservice options, they are also realizing the value of using loyalty as the centerpiece of a digital ecosystem that connects consumer information across a variety of ordering, delivery and payment options.”

If a c-store retailer hasn’t yet launched a loyalty program, they shouldn’t waste any more time, as competition is growing and includes operators beyond the convenience channel.

Earning and retaining customer loyalty has never been more important, Stout stressed.

“The concept of a loyalty program itself is no longer unique. Most brands have some sort of incentive in place to attempt to keep customers coming back,” she said. “The brands that will rise to the top, however, recognize the importance of personalized, 1:1 loyalty that integrates with every touchpoint to evolve alongside the customer and their changing preferences.” CSN

“As we continue to introduce new foods, the myRewards Plus app and our loyalty program provide an opportunity to feature those products and encourage trial through in-app offers or redemption of points.”

— Steven Root, Pilot Co.