Long on Loyalty

According to a recent Colloquy study, since 2007 participation in loyalty programs rose by 19 percent in the United States. Retailers saw the greatest shift toward rewards programs with 75 percent of consumers reporting the recessionary economy had a neutral or positive influence on their participation. (The smallest increase was experienced in the financial services segment, where 52 percent of participants said the economy had no impact on their enrollment decision.)

"U.S. consumers clearly see value in program participation, and continue to leverage their activity as an antidote to hard times — seeking added value and using rewards to stretch dollars," said Rick Ferguson, Colloquy’s editorial director, when the survey results were released last week.

A quick check of my key chain and wallet shows I'm a member of these loyalty progams: Stop N Shop, CVS, Borders, Cosi, Delia's and American Eagle; the last two for my teenage daughter. Stop N Shop, Borders and CVS get the most workout, because they offer the best, most immediate rewards and are more part of my daily habit. I also hear from these retailers the most via e-mail (a few times a week from Borders), snail mail (special mailings from Stop N Shop and CVS), and receipt (instant rewards from Borders and CVS.)

One of the most successful c-store loyalty rewards programs I've seen is operated by Q Marts, of Sheboygan, Wis. (See "Q Mart Reward Program Pays Off" on www.csnews.com.) With only 20 stores, the chain has more than 67,000 members, in a marketplace of approximately 500,000 people. More impressive, the card members actually use the cards and engage in the chain's many vendor-supported offers.

A recent analysis of the chain's business showed Q Mart Rewards members made more than 20 percent of in-store transactions and more than 24 percent of fuel gallon purchases, spending an average of nearly $50 in the store per month and buying 30.24 gallons during that time.

Much like Stop N Shop, Borders and CVS, the chain focuses on the loyalty program in all of its marketing materials -- via Outsite Networks technology at the store, in radio and cable TV ads and in print. The program offers a mix of benefits: discounts; buy-one or buy-some, get one free; and instant rewards.

Now is the time, it seems, for savvy retailers to be leveraging their loyalty programs, which, in the case of Q Marts, at least, is actually building loyalty, rather than simply attracting customers looking to cherry-pick specials.

-- Barbara Grondin Francella

Comments

[Bo Sasnett]

Barbara,

Your article is very insightful. More and more convenience retailers are adding loyalty programs these days. It is clear that when a convenience retailer like Qmart fully commits to making loyalty marketing the core of their marketing program, they have the potential to see outstanding results and returns on their investments. In addition to picking the right loyalty provider partner, the marketing commitment and execution of the commitment is a key ingredient to the success of a loyalty program.

Thanks for providing this insightful article.