Loyalty and Facebook are changing the way convenience store retailers are communicating with today’s consumers.
By Greg Ehrlich, Contributing Editor.
Smaller convenience store chains with limited resources often sit on the sidelines waiting to see how their larger counterparts embrace new technologies. They wait to see whether the new initiatives make it past a pilot and whether other chains start embracing the new technology.
Waiting helps companies avoid being on the bleeding edge, but it also reduces the early mover benefits. A great example of this is pay-at-the-pump technology. If you were one of the first locations in your marketing area to install CRINDS, then you enjoyed a sizeable bump in your fuel sales as you attracted customers from other locations.
Today, customer relationship management (CRM) technologies, such as loyalty software and social media, are being deployed by c-store companies and embraced by their customers. It seems that we are reaching the tipping point for both of these marketing tools.
For the past five years, we have seen loyalty programs appear at chains of all sizes across the country, yet the majority of chains still sit on the sidelines. As the economy continues to strengthen, we can expect to see more c-store chains begin rolling out rewards programs.
Why has loyalty permeated the industry more slowly than pay-at-the-pump? The reason is that it is not a simple plug-and-play technology. Loyalty requires commitment from the top as well as throughout the organization that your customers are your highest priority and that building relationships with them and rewarding them for their loyalty is objective No. 1.
Developing, piloting, rolling out and optimizing loyalty programs is not rocket science, but it does require attention to detail when planning, executing, evaluating and modifying the program in order to maximize the results and return on investment. It also requires companies to be more analytical and creative in their overall marketing approach.
Rather than developing promotions geared to all customers you need to create segment based promotions. Some promotions should benefit all customers, but others should only benefit your loyalty customers and still others only certain segments of your loyalty customer base. Ultimately, the retailers that have embraced loyalty and have committed to learning how to maximize its value in building profits and reducing customer defection are enjoying the benefits of competitive differentiation.
Chains that decide to embrace loyalty marketing over the next few years should enjoy similar returns on investment, but wait too long and loyalty may just become a cost of doing business that is required simply to stay competitive with returns similar to those who waited too long to add pay-at-the-pump.
The explosion of social media—Facebook in particular—is reminiscent of the dot com boom of the late 90’s. Facebook traffic has grown in the past year from about 250 million unique users per month to nearly 600 million. According to internet intelligence firm Experian Hitwise, for the week ending Jan. 15, 2011, Facebook was the most popular U.S. Web site with 10.4% of all Web traffic going there.
For the same week, Hitwise statistics indicated that Facebook commanded a whopping 63.7% of all traffic to social media sites followed by YouTube (18.7%) and MySpace (2.3%). The race is over for now and Facebook has emerged as the social media winner. More importantly Facebook is FREE. But just because it is free does not mean it is easy.
Just like loyalty, building, maintaining and growing a robust Facebook fan page takes commitment and creativity. Facebook allows businesses to develop fan pages, which individuals can like. Once a person chooses to like your fan page, that shows up on their friends’ news feed page, and they can subsequently peruse it and choose to like it too. Consequently, having a Facebook fan page with few fans and no strategy and tactics for building a fan base will provide little benefit to your business.
There are a variety of strategies for building your fan base. The fundamental factor is complying with Facebook etiquette and making sure not to violate the informal protocol. Facebook is a social networking site where people can communicate with their entire social network of friends and family. They don’t want to be constantly marketed by a business, but if the business participates in the conversation and follows the 80/20 posting rule (80% news, information and entertainment vs. 20% marketing), they are more likely to be embraced and supported by their fans.
The make up of the 20% marketing also plays a key role in whether or not the fan base grows. Facebook fans want something special for “liking” you. If all you do is tell them about the regular promotions, you are not providing any incremental value, nor are you providing your fans with an incentive to recommend that their friends like you. Alternatively, if you offer Facebook fan specials and run Facebook fan contests, your potential to grow your fan base grows exponentially. The more creative and engaging you make your contests, the more interaction they will trigger from fans.
The c-store chains having the most success growing their Facebook presence are simultaneously building and leveraging their fan bases by integrating other technology marketing tools like text and e-mail marketing. The low costs of these marketing technologies make them valuable additions to fan pages. Not all fans like to be communicated in the same way, so have different promotions geared to each communication channel.
Integrating Loyalty with Facebook
Both loyalty and Facebook are great ways to strengthen your ties with your customers and, while effective independently, they will be more successful when done in concert.
The time for waiting is over. Start plotting your path to strengthening your customer relationships while early mover advantages still provide attractive returns on investment.