CHICAGO – “It’s easier to motivate a behavior than create an
emotion,” began John Keenan, managing partner at Anthem Marketing Solutions, at
the NACS State of the Industry Summit’s Marketing/Current State of Loyalty
general session.
Addressing the merits of loyalty programs and the potential
for success within the convenience store industry, Keenan’s insights argued for
participation while cautioning that the road ahead is fraught with challenges.
“This requires a big commitment,” Keenan said, one “that you
must continually monitor to justify.” But for those who are committed, the
payoffs can yield the Holy Grail for retailers: increasing the frequency of
customer visits, increasing spend per visit, and creating new occasions for
visits.
Keenan cited a number of best practices for those looking to
leverage the full potential of loyalty:
- Make it simple to understand and participate
- Recognize and reward consumers for participating
while making communications targeted and relevant
- Create valuable incentives that change behavior
without sacrificing margins
- Continually measure and evaluate performance
- Make sure your employees are engaged in the
initiative
While a strategic loyalty program offers great potential for
convenience store retailers, it doesn’t make sense for everyone, Keenan said,
and retailers should conduct a through ROI analysis before moving forward with
what will be a costly (time and labor) initiative. “Look at how this is going
to deliver a return for you,” Keenan instructed. “It’s not enough to engage
consumers if you’re not delivering a positive ROI.”
Following Keenan was Patrick Raycroft, managing partner at
W. Capra Consulting Group, who provided insights on the technology and
processes to consider as you assess deployment of a loyalty program.
To do that, he offered a few key questions that will help retailers
determine an approach and the potential business impact:
- What loyalty program is best for my business?
- How do I implement the program within my
existing business?
The answer to the first will be predicated on business
objectives — i.e., whether you want to increase frequency, retain existing
customers, or attract new customers.
The second ties in to your existing technology
infrastructure, which will determine your initial capability and any necessary
investment to add additional capabilities.
Keenan recommended focusing delivery to mobile devices,
which are becoming the de facto way to engage young consumers especially.
Finally, he said any loyalty strategy should include five
components to ensure your brand and products are top-of-mind with your
customers: marketing, payment technology, coalition/partnerships, CRM, and
social media. And whatever loyalty route you go, make sure you own the data, he
said. It’s the most valuable asset you’ll produce from any loyalty initiative.