From basic discounts, points, and perks, to more advanced strategies like subscriptions and mobile payments, loyalty programs allow retailers to compete in today’s fast-paced retail landscape.
In today’s fast-paced retail environment, convenience stores are constantly vying for the attention of mobile-obsessed customers. To stay competitive and foster long-term growth, app-based loyalty programs are no longer nice-to-haves, but must-have programming.
This is the first in a series of articles to explore the fundamental concepts of loyalty from basic discounts, points, and perks and will set the stage for next-level programs and strategies involving subscriptions and mobile payments.
Loyalty Program Basics
A basic loyalty program rewards customers for shopping and will incent further purchases with one-time coupons or regular discounts just for being a member. These programs are relatively easy to create and maintain. Users or members can join by sharing little to no personal information.
Here are some elements of a traditional loyalty program:
Discounts are the simplest and most direct way to incentivize customer loyalty. This approach offers customers exclusive price reductions on specific products or their entire purchase. A customer could receive a 10% discount every time they purchase their favorite beverage. This instant gratification not only pleases customers but also keeps them coming back.
Points-based loyalty programs are another popular choice. These programs award points for each purchase and these points can be redeemed for rewards, discounts, or products. Chipotle has a popular points-based program and for every dollar spent, the user earns 10 points. Customers can choose from rewards like free entrees, sides of chips or guacamole, or can donate points toward charities. This system not only motivates customers to shop regularly but also lets them see tangible rewards for their loyalty.
The classic stamp or punch card system remains a tried-and-true method but is no longer dependent on a paper card when digital. In this approach, customers earn a stamp or punch for each purchase of a certain item. After accumulating a certain number of stamps, they receive a reward, such as a free cup of coffee. This method taps into customers’ desire for completeness and immediate rewards, creating a sense of achievement. Irish retailer Maxol has excelled with its digital stamp program, rewarding Rosa Coffee drinkers for their purchases. Another example is a chain of stores that sells hand-made pretzels in over sixty locations throughout Switzerland, which rewards customers with crowns for each pretzel purchase.
Beyond discounts and purchase rewards, perks add a layer of exclusivity to a loyalty program. These non-monetary rewards may include early access to new products, special promotions, or exclusive experiences. For example, loyalty program members might get first dibs on your store’s latest product releases or limited-time offers, creating a sense of privilege that’s hard to resist.
Customers enjoy playing games and when games result in free products or bonus points, people get hooked. Introducing gamification elements to a loyalty app could mean introducing challenges, leaderboards, or actual games like a “spin-and-win” or “scratch-off.” United Pacific dba Rocket stores offer a variety of games within their car wash app to encourage users to play and win free washes for friends. Gamification transforms a typical shopping experience into an interactive adventure, further solidifying customer loyalty.
More Advanced Loyalty Programs
Recognizing customer frequency with a loyalty app is a good starting point for rewarding customers. But, as competitors fight to secure the customer’s wallet spend, retailers need to get creative and also increase the functionality and convenience of an app. Taking a loyalty app to the next level with just a few simple additions can truly differentiate a retailer from the store just down the road.
As members earn rewards, they can progress from one level to the next in a tiered loyalty program. Circle K in Vietnam elevates members from an entry-level tier to silver and gold as they increase their spending and visit frequency. Gold status rewards members with extra benefits and discounts which can then be shared with friends and family through the app. This helps create an emotional connection between the brand and its members, helping them to connect.
The hottest trend in convenience and foodservice is app-based subscription programs for drinks, food, and more. Customers pay a monthly fee to access a certain number of unlimited products. Subscribers can pay once and enjoy that product all month. Retailers have a guaranteed and predictable revenue. And, that customer will not go anywhere else for that item – a guaranteed, automatic customer! We wrote several articles about subscription programs this past summer and you can read more in An Introduction to Subscription Programs article.
Life happens on smartphones and this is a trend that is going to continue. Customers enjoy the convenience of having everything they need on their phones and that phone is always in their hand or pocket. Why not make paying for essentials like fuel or beverages even more convenient? Integrating mobile payments into your loyalty program streamlines the customer experience, allowing them to earn rewards and make purchases. Imagine a mobile app that enables customers to pay for items, earn loyalty points, and access personalized offers—all within the same platform. This not only enhances the convenience but also fosters a stronger emotional connection between your store and your customers. Smart retailers like Sunshine Gasoline and Smith Oil have been successfully allowing customers to pay for fuel with their mobile app. Additionally, both accept only ACH payments (tied to a bank account rather than a credit card) and have immensely reduced their credit card processing costs.
Achieve Loyalty App Excellence
Large or small, retailers have found that having a functional, sleek, easy-to-use loyalty app is the optimal way to stand above the competition.
Whether starting or looking to revamp a current loyalty program, the experts at Liquid Barcodes can help develop a simple-to-operate rewards program or integrate with a current program to add differentiating next–level programming.
Embrace the loyalty revolution and watch your business flourish.
About Liquid Barcodes
Liquid Barcodes is a leading global loyalty and digital marketing technology company specializing in the convenience and foodservice industries. The proprietary, cloud-based technology platform allows retailers to create and manage their digital marketing campaigns with a process called the “customer connection cycle” to engage, promote and reward customers’ activities in real time across digital and media channels.
Liquid Barcodes loyalty platform is powering loyalty programs for industry leaders across several global markets, by offering unique subscription, mobile payment, machine learning, personalization, gamification, loyalty, and other capabilities.
About the Author
Carolyn Schnare, Chief Content Officer, Liquid Barcodes
Carolyn Schnare has been involved with the convenience retailing industry for two decades with extensive knowledge of customer engagement and marketing, sustainability, and community outreach. Prior to Liquid Barcodes, Schnare worked at NACS (National Association of Convenience Stores) in a variety of roles from event production to membership and most recently as Director of Strategic Initiatives and host and producer of the popular industry podcast, Convenience Matters. Schnare currently anchors the popular Shop Talk LIVE! video series produced by Global Convenience Store Focus media group.