#CRU14 Blog: A Loyalty Light Bulb

Published in CSP Daily News

At last, the reasons a loyalty program does or doesn’t connect hits home

By  Steve Holtz, Online News Director & Beverage Editor

GLENDALE, Ariz. -- There’s a BP-branded gas station about three blocks from my home. I seldom, if ever, shop or buy gas there. Why? Two basic reasons: It’s more often a difficult left turn into the lot and, more importantly, the gas station across the street (a right turn) is almost always priced 1 or 2 cent per gallon below the BP. (Yes, I’m that guy.)

A year or so ago, when BP introduced its new loyalty card—Pump Rewards—I stopped at this BP site to pick up a copy of the card and the sign-up details, for research, for work, not to actually join the program.

I’ve never analyzed why this program didn’t appeal to me, but loyalty expert Bryan Pearson got me thinking about it as he spoke at #CRU14 today. According to Pearson, a program needs to meet at least a couple of what he calls the “three Rs” of loyalty to gain acceptance:

  1. “Reward,” that is, a benefit that a consumer would want.
  2. “Recognition” of just how valuable you are to the company as a loyal customer.
  3. “Relevance,” or a specific application within the customer’s life.

Now, I realize, the BP program met only one of the three Rs, specifically the reward. The cents-off-per-gallon offer would effectively negate the pricing advantage of the gas station across the street. Still, I didn’t bite.

But about three weeks ago, I found myself digging through my office desk drawer, fishing that card out and registering online. I’m now a pretty frequent BP customer.

So what changed?

Again, it wasn’t something I had analyzed, but Pearson’s talk put it in perspective for me.

  • Back in August, CSP Business Media moved its headquarters to a new address, altering the route I drive to work.
  • That route change now takes me past a different BP site, typically with the same gasoline price as the other, but with a store that I find better stocked and more convenient to visit.

So suddenly, another of Pearson’s Rs, specifically relevance, became an issue for me, and my habits have changed as a result.

I still seldom visit the BP site that’s closest to my home (It seriously needs a remodel), but if I’m on a longer drive, I’m less likely to be motivated by a couple-cents difference in the price at the pump if a BP site is convenient to visit.

I offer up the experience as proof of evidence in Pearson’s theories; just one more lesson learned at Convenience Retailing University 2014.

By Steve Holtz, Online News Director & Beverage Editor
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