NATIONAL REPORT — Every convenience store retailer can tell you that no two customers are alike, so there isn't any payoff in treating them as such. This is especially true of fuel-only customers vs. in-store customers.
While foot traffic at the pump is thriving, 75 percent of c-store customers are fueling up and then driving off without stepping foot inside the store, according to Kimberly Otocki, content marketing specialist for Paytronix Systems Inc., which recently hosted a webinar entitled "How to Get Your Customers From the Pump to the Store." On average, 1,000 customers visit a c-store per day, which means 750 of those customers won't go into the store.
If a c-store could compel just 10 percent of fuel-only customers to come inside, it could mean an extra 75 in-store visits per day. This would equate to an extra $8 per customer, or $600 incremental spend per day per store, according to Otocki. "That is money directly going back into your brand," she said.
How can c-store retailers reach fuel-only customers and change their one-track behavior?
Otocki offered three scenarios:
Option 1: Do Nothing. C-store retailers could do nothing and hope somehow, someway these customers get hungry or thirsty and make a visit inside the store.
Option 2: Signage. C-store retailers might use signage at the pump, in the window or on video displays to broadcast ads and draw attention to offers. "This can get expensive to do and become inconvenient having to change out signage with each new promotion," she advised. "While this a great option and might compel a fuel-only customer, it's not necessarily the best option."
Option 3: Blast Offers. While c-store retailers think blasting an offer is appealing on the surface, the hype isn't worth the payout. As Otocki puts it, a customer might have been planning on coming into the store to make a purchase, but with a blast to everyone offering the same "buy one, get one free" discount, this customer is getting a free product and not spending what they initially planned on. "By doing this, you’re cannibalizing your sales," she explained, noting that the majority of e-blasts have a negative return on investment.
Instead, Otocki said a fourth option — a better option — is for c-store retailers to change their approach by first asking themselves: Do I know who my customers are? Then, by learning the characteristics of their customers, from what they purchase to how much they spend, c-store retailers can gather personalized information and leverage this purchasing data to create a personalized experience.
"Blasting looks good when you see the silhouette of customers, and not the segmentation of fuel-only purchasers and in-store purchasers. But what if you could track these customers?" Otocki posed. "You could identify data between fuel-only customers and in-store shoppers. Then, you can differentiate special offers for each set of customers, drawing incremental sales."
By segmenting customers, c-store retailers can utilize the three Rs: relevance (making customers feel special), retention (creating fewer opt-outs and engaging with customers), and revenue (capturing customers and spend).
"The more you learn about customers and the more you tailor to them, the greater you can connect with them, which leads to more customers and more profit," the marketing specialist advised.
For example, there is much to learn about the differences between "Bubba," the c-store customer always at the pump, and the "soccer mom" fueling up in between activities. While both are active fuel customers, sending them the same offer will not resonate the same way. Bubba is enticed by an offer for soda and jerky. The soccer mom wants healthier items for her family, like milk and granola bars.
"Yes, both are fuel customers and that might be all you know about them at first. But the more you learn about them, you can alter your offers to their wants and needs. Customers across the board are different, so they need to be treated differently," Otocki instructed. "Slice and dice data to get a clear picture of everybody."
If a c-store retailer is just getting started with capturing and collecting customer data, Otocki pointed to Louisville, Ky.-based Thorntons Inc. as an example of where to start. Thorntons — which operates 180 c-stores across Kentucky, Indiana, Illinois, Ohio, Florida and Tennessee — blasted an offer to all its customers that if they filled up on gas, they would receive a free dispensed drink. This offer pulled fuel-only customers into the store to sample its product, giving the retailer an opportunity to collect data so that it could alter its next offer to these new in-store customers.
"Everyone needs to start somewhere," said Otocki. "Get creative when starting out and make sure you have a wide range of products to offer customers."
She also suggests that c-store retailers utilize their consumer packaged goods (CPG) vendors as a resource in getting started with data collection. By reaching out to their CPG vendors, retailers are creating an advantageous and mutually beneficial relationship — pulling in a new customer for themselves and their vendor, getting an incremental visit and, ultimately, incremental spend.
Vendors may even fund discounts on behalf of c-store retailers to tease out price-sensitive customers.
"We all know fuel customers will go out of their way to save money any way they can with fuel discounts," Otocki concluded.
Paytronix Systems is a provider of reward program solutions to retailers and restaurants.