NEWARK, N.J. — It's a classic tale of two customers. One is the fuel-only customer who pulls in, gases up and drives off without an incremental visit to the convenience store. The other is the fuel-up customer who also stops inside the store for their morning cup of coffee, mid-afternoon pick-me-up snack or on-the-go lunch.
"A majority of your customers are fuel-only customers not stopping inside the store. We want to change that behavior," said Kimberly Otocki, content marketing specialist at Paytronix Systems Inc. "On the flip side, there's probably a smaller minority of your customers who are actually stopping at your fuel pumps and coming into your store, so we want to make sure and maximize that number because that's where we're able to change their behavior and get those incremental spends and visits."
Speaking during the recent "How to Drive Pump-to-Store Visits With Data" webinar, hosted by Convenience Store News and sponsored by Paytronix, Otocki provided pointers on how to drive fuel-only customers inside the store, where higher-margin products are and where operators can collect more data on customers to market to them effectively.
Discussing how c-store operators can collect data to change customer behavior, Otocki outlined three steps:
Step 1: Identify Customers
C-store operators need identifiable information to effectively reach customers. When looking at pump-only customers, retailers are uniquely positioned to reach them through at-the-pump advertising of in-store items.
Citing The Coca-Cola Co.'s research on advertising at the pump, Otocki noted that 32 percent of customers noticed signage at the pump that influenced an in-store purchase during the same visit and 21 percent noticed signage at the pump that influenced an in-store purchase in the future.
Once retailers get fuel-only customers into the store, they must hook consumers and give them a good reason to give up their personal data. A few possibilities include:
Welcome rewards as a thank-you to customers for providing valuable data and getting to be known as marketable customers.
Text to join or mobile app that is easy and doesn't require too much time.
Ambassadors, such as cashiers and staff, who can speak to the value of the retailer's offering to customers.
Step 2: Get Customers to Engage
Nearly three-quarters of customers (73 percent) say the best promotions give discounted fuel with in-store purchases. As opposed to continuously giving customers deep discounts that de-value sales, retailers can utilize tie-in promotions. The most effective are buy X amount, get X cents off per gallon, or visit 10 times for X cents off per gallon.
Another viable promotion is to offer fuel-only customers a free hot or cold beverage to drive them into the store. This tactic allows retailers to handle their margins and ensure they aren’t giving away a product too large.
"We've seen fantastic results for this particular promotion. One of our clients saw a 55-percent increase in visits during that period from this targeted customer base. Beyond that, a spend lift of 184 percent," Otocki pointed out. "That's because these customers weren't just coming in to get that free coffee or free dispensed beverage: they were coming in and tacking on a snack or sandwich, increasing their basket size."
Step 3: Change Behavior
Getting customers inside the store for the first time isn't the hardest part. Rather, it's getting them to come back in time and time again.
To do that, c-store operators should utilize data with segmentation. Convenience stores traditionally have three key segmentations:
Bubba, who visits daily to buy Slim Jims, soda and chips;
Susie the Soccer Mom, who visits two times a week for grab-and-go snacks for the kids that are healthier options, as well as salty snacks; and
Professionals, who visit less frequently (every month) and prefer options like protein bars, shakes and healthy snacks such as nuts and popcorn.
Without segmentation, c-store retailers are at risk of running blanketed offers to all customers, which can be costly, Otocki cautioned. Instead, she suggests sending two different offers to two different segments.
For example, retailers can send a free product or heavy discount to Segments 1 and 2 because it will motivate them for an incremental visit. With Segments 3 and 4, a BOGO promotion or a lesser discount might be more appropriate. Both moves will bring operators closer to motivating the right customers with the right promotions.
Continuous campaigns and machine-learning segmentation are other viable options that utilize data for maximum effectiveness. The first analyzes each guest's unique visit cadence to trigger offers to the right person at the right time, while the latter discovers segments of similar guests based on what they do, which then can be translated into personalized, highly relevant offers.
Go Big or go home
Otocki had these final key takeaways for convenience store operators:
Customers can change their behavior.
Get to know and identify all customers.
Data is key to changing behavior.
Subscription services such as Burger King's recently introduced BK Café Subscription are "perfect for c-stores," according to Otocki. For $5 a month, customers can get a small coffee a day at the fast-casual restaurant at no additional cost.
"It's a great model to be able to utilize because Burger King isn't just doing this in order to get $5 a month from their customers and give them a coffee every single day. They're doing this because they know it's the way to get those visits to come back time and time again," she explained. "If you already paid for your coffee every morning with your subscription, you probably will stop there because you know it's been paid for. On top of that, the hope is that if these customers are coming in, they're likely to purchase more items."
A replay of "How to Drive Pump to Store Visits With Data" is available by clicking here.