Technology Isn’t Just for the Big Guys

By Linda Lisanti

This year marked the first time NACStech put a special emphasis on the convenience industry’s small operators, devoting an entire track of educational sessions to their unique technology needs. The five workshops touched upon a broad range of topics, from Web marketing and PCI compliance, to loyalty programs and theft prevention.

The New Marketing Mix

On the first day, attendees heard from experts on how to best utilize social media, e-mail marketing and mobile marketing to build their business during a session entitled, “Trumpeting Your Brand Without Blowing Your Budget.”

Lorrie Thomas, CEO and marketing therapist at Web Marketing Therapy, said the traditional four “Ps” of marketing — product, place, promotion and price — are a thing of the past. The new social Web marketing mix is now the four “Cs” — customer, convenience, communication and cost (time, money, energy), she said.

“Social media is the future. It is not a fad,” Thomas noted.

Of all the Internet marketing mediums, the return-on-investment (ROI) is highest for e-mail marketing, Amy Tinsley, regional development director for Constant Contact Inc., said when laying out the reasons convenience and petroleum retailers should market by e-mail.

Other reasons she cited were: almost everyone reads e-mail; it’s cost-effective; you can start an e-mail campaign for as little as $15 a month; and it’s an effective way to communicate because people are opting in by providing their e-mail addresses.

However, she cautioned that in order to be successful, retailers must provide information in their e-mail messages that the receivers find valuable. “If people don’t value your e-mail, you might as well not send it,” Tinsley told the group.

Like e-mail marketing, mobile marketing is also inexpensive, delivers results that can be tracked and creates a database of customers, noted Conrad Carney, CEO of CMS Text. Plus, he said 98 percent of all text messages are read, most within four minutes of receipt.

He provided NACStech goers a list of dos and don’ts for mobile marketing:

Do:

-- Find a mobile marketing company.
-- Create a database of customers through promotions.
-- Make offers valid for specific periods of time.
-- Provide value.
-- Provide exclusive offers.
-- Include a tag to your mobile marketing in all your marketing.

Don’t:
-- Over-market; once a week maximum.
-- Make offers one day only.
-- Make offers run for more than seven days.   

Practical PCI Advice for Small Operators

PCI compliance can be overwhelming for small operators, and even more complex for branded stores that don’t know whether they or their brands are responsible for attaining compliance. In the workshop, “Table Talk: Branded Stores and PCI Compliance,” NACStech connected retailers with representatives from the major oil companies so they could get answers to all of their pressing questions about PCI requirements.

To determine who is responsible for compliance when a “gray area” emerges, Payment Architect Jim Huguelet, of W. Capra Consulting Group, said operators should ask:

-- Does the site own it, lease it or get it?
-- Does the site maintain or update it?
-- Does the site directly contract for it?
-- Does the site directly pay for it?
-- Does the site have the choice to use it? 

If the answer to these questions is yes, then the responsibility lies with the site operator. In fact, Huguelet said: “If you’re the site owner or operator, you should act as if you are fully accountable for PCI compliance until you can contractually determine otherwise.”

He also suggested small operators avoid gray area by setting up a face-to-face meeting with all involved parties, and ensure all future contracts include language on PCI compliance and clearly state who is responsible for implementing PCI standards.

The basics of PCI compliance also were laid out during the session “Simplifying the PCI Compliance Process for Small Operators.” Speakers Christopher Lietz, director of corporate programs, and Mark Lucas, vice president of managed services, for Coalfire Systems Inc., said more than 90 percent of compromised merchants are small retailers who fall into the Level 4 category, with less than 1 million transactions per year.

They said small operators appear to be taking one of three approaches to PCI:
1. Wait and see: no one has asked, so they assume they’re good;
2. Over-react: try to learn and fix everything at once; or
3. Take practical steps forward: identify the risks and close compliance gaps over time.

The third approach is the right one, and they stressed to the retailers in the room that they can’t let their fear of not passing keep them from engaging in the process at all.

“It’s OK to have gaps. That’s part of the process,” Lietz said.

Using Loyalty to Build Your Brand

Loyalty programs aren’t just for large chains. Convenience operators of all sizes — even those with just a single store — can execute a loyalty program to grow their business. The session, “An Ounce of Loyalty Is Worth a Pound of Cleverness: Options for Small Operators,” featured presentations by loyalty program providers National Payment Card and Outsite Networks Inc., and retailers who have implemented the programs. 

The average c-store shopper makes six visits per month — four that include fuel — and spreads those visits over three stores. However, when a retailer has a loyalty program, that shopper will consolidate their visits to just that one store, and spend more in every visit, said Bo Sasnett, vice president of sales and marketing for Outsite Networks.

“Heavy c-store customers are on the decline. [With a loyalty program], now you know who they are and you can keep them,” he said, noting 10,000 U.S. c-stores currently have a loyalty program, and another 16,000 will have one by the end of this year.

Bob O’ Connor, president of O’Connor Petroleum, operator of three Jetz Convenience Centers in Wisconsin, said his company tries to stay ahead of the competition and its Jetz Rewards loyalty program, through Outsite Networks, makes that possible.

“We’re an independent. We’re Jetz Convenience Centers. And we’re building our brand through this tag,” O’Connor said, holding up his own Jetz Rewards tag.

The program, which has more than 1,300 active members shopping each month per site, doesn’t discount fuel, but rather focuses its rewards on driving sales of high-margin items in the stores. Jetz Rewards also cross-markets through unique partnerships with local restaurants such as Dairy Queen and Subway, golf courses, banks and realtors.

“I’m spending money to target your business. There are an awful lot of people that have made you a bull's-eye,” O’Connor said, noting loyalty is a top priority for him, with 15 percent to 20 percent of his time spent cultivating the Jetz Rewards program.  

“If you’re not committed, don’t even start,” he stressed.  

Signs of a Dishonest Employee

Convenience retailers are generally looking in the wrong places for the losses in their stores, as thieves have moved far past voids and no sales, said Bill Ritter, president and CEO of Ritter and Associates LLC, who led the workshop “Shrinking Shrink: Using Your POS to Control Theft” — the last session in the Small Operator track. 

“Cash is something dear to our hearts. We shouldn’t let it go. Yet we allow employees to be short over and over again,” Ritter said before showing attendees techniques they can use to analyze point-of-sale (POS) data and identify employee theft.   

There are many evident signs of stealing when looking at POS data, he noted. Among them: excessive no sales; excessive item correct/voids; excessive number of returns/refunds; excessive coupons; quantity sales discounts; working from an open drawer; cancelled prepays; excessive price overrides; and low customer counts.

Working from an open drawer is the No. 1 way to steal in the industry for the simple fact there is no paper trail, according to Ritter. He said operators can detect this by looking for employees who have a drop in customer counts and a drop in sales on their shifts.

Cancelled prepays is No. 2, but growing rapidly. The way it works, he explained, is a customer will buy a 12-pack of beer and give the cashier $10. The cashier will ring up the sale as a pre-pay at the pump, and give the customer his or her change. Then when the customer walks out, the cashier will cancel the pre-pay and pocket the money. 

Ritter said c-store operators too often wait for a crisis to happen and then manage the situation, when instead they should be getting out in front of dishonest employees.

“It’s not what we have, or where we keep the money that’s going to stop theft,” he said. “What will [stop it] are procedures and the enforcement of those procedures.”