I am a loyal Cub Foods shopper. They partnered with Holiday Gas Stations to offer My Cub Rewards. For every $50 I spend I get $.05 off per gallon of gas. A year ago they would print out a receipt each time you spent money. When you filled up your tank you had to bring the receipt inside to get the discount. You could save several receipts and use them at once, but they did have expiration dates so you could not wait too long. At this point neither Cub nor Holiday had a clue who I was.
There was a pro and a con to this process. There were many times when I would never use the discount because I did not want to go in the store, so the deal was not valuable to me. When I did go inside to pay and use the receipts, I usually made an additional purchase. So although it was not easy to do, it did get me to make that inside purchase which is key to c-store profitability.
Over the last 12 months they migrated to a loyalty card program. When I enrolled I provided my name and email address and received a loyalty card. Each time I make a purchase I scan the loyalty card to receive credit. When I don’t have the card, there is no way for me to get credit, so this is one loyalty card that I do carry with me all the time. In addition, Holiday upgraded their gas pumps so that you can swipe the card at the pump and it will roll-back the price before you start pumping. This allows you to just pay at the pump instead of having to go inside with the receipts. Cub has also made it convenient to know what your discount is by adding the total to the bottom of the grocery receipt. I didn't realize this until the associate mentioned that I had accumulated $.65 per gallon and circled it on my receipt.
That particular day my husband and I were grocery shopping together which is a rare occurrence because we tend to divide and conquer and rarely shop together. So the news of our $.65 was heard by both of us. I drive a Prius that holds 10 gallons max. My husband drives a Subaru which holds 15 gallons. Needless to say, this deal was for him because it is a one-time event and then the discount is gone. So instead of saving a maximum of $6.50, we saved $9.75 when my husband filled his empty tank. Our gas prices were $3.72 per gallon so he ended up spending $46.05 instead of $55.80 to fill up his tank. While it was a great savings that day I had spent over $650 in groceries at Cub to get this $9 discount on gas.
Does this get me to the Holiday Gas Station instead of the competition? Yes, but only after I have accumulated many cents off and the number is worth it. This means that several months of grocery shopping will get me to the Holiday Station. When I go to the Holiday Station with my loyalty card, I am not motivated to go inside to make any additional purchases. Is that what Holiday wants?
Gas discounts are standard in the c-store loyalty market and a necessity to compete, but it is also beneficial to go beyond the discounts. The margins are in the store, so marketing energy and dollars should be spent to increase the percentage of people coming into the store. Also you want to reward all of the c-store customers, not just the ones that shop at Cub. The most effective way is to have a comprehensive c-store loyalty program where all purchases in the store and at the pump are tracked and rewarded for. Then communicating to the customers the way they prefer, either email or text, will keep the c-store top of mind.