What Are Convenience Store Loyalty Programs? - The Essentials

Competition in the convenience store industry is stiff, and with a potential 152,396 stores expected to open in 2024, lasting success is going to be more challenging. So how can convenience stores set themselves apart from all that competition? 

For many consumers, the difference between stopping at your convenience store—or the one across the street—comes down to one thing: Which store rewards your patronage with a convenience store loyalty program? While many consumers are choosing convenience stores based on a variety of things, including their unique products, cheery staff, or technology that improves the buyer experience, incentives based on c-store loyalty programs are a big draw for consumers who are looking for savings and value. 

But what exactly is a convenience store loyalty program? It’s a marketing strategy that rewards consumers with incentives—such as discounts or exclusive offers—for spending money in your store. It is a win-win for consumers and business owners. Consumers get perks for being loyal, and convenience store owners can also see improvements in: 

• Customer visits. Because purchases are rewarded, c-store loyalty programs encourage repeat visits. 
• Pump-to-store conversions. You can design your loyalty program to encourage customers who purchase gas, for example, to also purchase food and other items in the store. 
• Customer lifetime value. Customers who participate in c-store loyalty programs tend to spend more money over time. 
• Customer data collection. When you collect customer data, you gain insights into purchasing habits and preferences you can then use for more effective convenience store marketing campaigns. 

Most importantly, loyalty programs give customers what they want. Your audiences no longer want merely transactional or monetary gain for their loyalty; they want to know you care about them as an individual, which means flexible redemption opportunities and hyperpersonalized experiences. 

According to the Paytronix Loyalty Report 2023, convenience stores experienced a 19% increase in the number of loyalty members from January 1, 2020, to June 20, 2023, and that number is rising. If you aren’t already offering a loyalty program, you now have a golden opportunity to better serve your customers and drive profitability.

Why loyalty and retention are important to convenience stores 

Why are loyalty and retention programs critical for c-store financial growth? Convenience stores often face razor-thin profit margins. Because landing new customers can cost five times more than retaining existing ones (Clientbook), it’s wise to prioritize loyalty and retention. This is where a convenience store loyalty program is game-changing. 

According to one study, 43% of shoppers visit a store because they are part of a loyalty program, and 51% say they frequent a store more often if they belong to a loyalty program. Not only that, but they spend more. Based on the Paytronix Loyalty Report 2023, convenience store loyalty programs provide the highest lift in check sizes of any segment, with loyalty member checks on average 12% higher than non-loyalty checks. 

C-store loyalty customers are likely to come in more often, spend more money when they do, and recommend your store to others—all of which drives up their customer lifetime value (CLV). 

Case Study: Discover how Pump & Pantry created a new loyalty program that gained over 20,000 new customers in the first year. 

What are the different types of customer loyalty programs for convenience stores? 

The question isn’t whether you should start your own convenience store loyalty program, but what type of loyalty program should you start? Here are five popular choices:  

1. Points-based c-store loyalty program: With each purchase, customers earn points they can redeem for free gas, products, or merchandise.  
2. Tiered c-store loyalty program: Upon signing up, customers receive a reward, but as they continue to frequent the store, they move up in “status,” essentially earning more or better perks.  
3. Pump-to-store c-store loyalty program: These programs offer bonus points or rewards for gas purchases to incentivize customers to also shop inside the store.  
4. Combinable/stackable c-store loyalty program: Customers can combine rewards from their program with other loyalty rewards or coupons. 
5. Mobile app c-store loyalty program: Such programs use a mobile app for enrollment, reward tracking, and mobile ordering and payment. 

Why convenience store marketing strategies are important

The US economy has witnessed a recent and steady decrease in gasoline consumption, starting with a 13% decrease from February to March 2020. The Energy Information Administration (EIA) expects US gasoline demand to drop by 1% before 2025. 

Improvements in fuel efficiency, still-prevalent work-from-home policies, and growth in electric vehicle (EV) adoption (35% increase from 2022 through 2023, according to the International Energy Agency) means fewer people are filling up at the pump, and many are filling up less frequently. 

While consumers will keep lining up for the cheapest gas in town, as a c-store owner you can only lower your gas prices so much before you start losing money. If you want to remain competitive, you must give consumers another reason to visit, including: 

• Diversifying the types of products you sell
• Providing additional services (i.e., car wash, EV charging stations)
• Offering prepared food and snacks that rival the taste and value of quick-serve restaurants (QSRs)

Loyalty programs are integral to an effective convenience store marketing strategy, enabling you to communicate with loyalty members about your offerings and services. Additionally, a well-structured c-store loyalty program provides you with the data required to: 

• Leverage nurture campaigns. Provide consumers with relevant content and exclusive offers that build long-term loyalty and maximize customer lifetime value. 
• Adopt a clustering strategy. Segment customers based on their behaviors, purchase history, and preferences. Then send personalized marketing campaigns and offers to improve customer engagement and satisfaction.  
• Implement basket-building tactics. Present upsell, cross-sell, and bundle offers to increase average order value (AOV) and maximize profitability. 

This level of personalized communication can prompt customers to choose your store when they need gas, food, or some other useful product.  

Build your own convenience store loyalty program  

The ideal loyalty program for your convenience store depends on your specific business goals, target audience, and budget. However, some capabilities are non-negotiable: You must offer your consumers a secure, user-friendly experience that provides them with significant value.

If you are ready to develop or optimize your c-store loyalty programs, we’re ready to help. Visit the Paytronix convenience store loyalty page to learn more.