Loyalty For Fuel Retailers Has Never Required More Decisions

For Convenience and Fuel Retailers, the last several years have offered hurdle after hurdle: Outdoor EMV implementation, real-time adoption of new solutions required by a global pandemic, and the ongoing fight against fraud at sites.  Compared to these major obstacles, knowing how to engage consumers should be easy, right? 

“Not as easy as one might hope,” held Daniel Kahan, Loyalty Lead at W. Capra Consulting Group. “Decisions surrounding implementation of mobile payments and loyalty programs cannot be made in silos.  At-Site versus Above-Site Loyalty remains an often discussed but all too confusing topic for Convenience and Fuel Retailers, yet how Retailers approach this one topic will lay the foundation for their program’s strategy, roadmap, and ultimately, their consumer engagement model.”

At-Site and Above-Site Loyalty are two key terms for Convenience and Fuel Retailers to understand:

  • Above-Site Loyalty refers to loyalty use cases driven solely through digital payments channels (mobile app, web app, etc.).  When combined with mobile payments, Above-Site Loyalty use cases are most often facilitated through the Mobile Payments Processing Application (MPPA) connection from the store.  This provides loyalty program participation to ONLY those consumers that have a valid payment method on file for your brand’s digital wallet AND are completing a digital transaction (like mobile pay at the pump).
  • At-Site Loyalty refers to loyalty use cases driven through on-site technology (indoor PIN pads, outdoor payment terminals, POS, etc.) that allow consumers to register for, earn, and redeem loyalty value.  Through connectivity between the store and a Loyalty Host, retailers that support At-Site Loyalty can engage ANY consumer at stores, regardless of how they pay or where they pay.

Above-Site only limits

To use a term aptly coined by Stuzo, Total Addressable Member Opportunity describes in greater detail the limits of Loyalty Engagement solely through Above-Site Loyalty.  They define Total Addressable Member Opportunity as, “The total number of Known and Unknown Consumers that do business at your sites on a regular basis, which your brand has the opportunity to convert into members of your loyalty program.”  

For a Convenience and Fuel Retailer who is choosing only to target a Loyalty offering to those Consumers who interact and pay using a stored digital payment method AND are completing a digital transaction, it’s akin to choosing to engage only 1% of your Total Addressable Members!  As is spoken about ad nauseum when it comes to mobile and digital engagement, a mobile application is already swimming upstream to remain a relevant application on any consumer’s device.  In addition to the acquisition hurdle, a Convenience and Fuel Retailer must consider the struggle to maintain active mobile users and how this may limit their loyalty and consumer engagement in an ongoing retention model.

Not out of the weeds just yet

Regardless of direction, there are additional complexities to navigate for any Convenience and Fuel Retailer loyalty implementation in 2021. Patrick Raycroft, Associate Director at W. Capra, added, “Point-of-sale devices are not like-for-like in how they handle the changes and functional differences of different loyalty implementations.”

Furthermore, even if a Convenience and Fuel Retailer has reached the decision to add At-Site loyalty to their site architecture to increase their consumer loyalty interaction, the consideration of additional loyalty budget is not one to be taken lightly.  Annual loyalty promotional budgets can increase tenfold due to implementing At-Site Loyalty, so be prepared to ensure your brand’s promotional budgets are used intelligently to drive profitable business outcomes.

“For Convenience and Fuel Retailers, navigating the minefield of considerations that need to be thought of in relation to Loyalty and Consumer Engagement, surrounding business impacts and business decisions should not be taken lightly,” Kahan posited.  “Adding an outside view that has significant industry experience as early as possible in your internal discussions will pay huge dividends and help avoid pitfalls.”

Daniel Kahan is dedicated to assisting W. Capra clients with Loyalty considerations, selections and smooth implementations. For further discussion, contact Daniel Kahan at dkahan@wcapra.com.

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