Upside’s latest report diagnoses the “loyalty plateau,” where programs continue to add members but see declining engagement.

Most fuel and convenience retailers would consider a loyalty member “their” customer, no questions. But new data shows that hardly any consumers stop at just one program membership — and as enrollment keeps climbing, the strength of any one program slips.

That growing gap between sign-ups and influence is the real story of loyalty right now.

High enrollment, diminishing impact: Meet the loyalty plateau

Consumers love loyalty programming; in fact, 86% of them told us that loyalty programs are important to them. Retailers who invest in loyalty are providing their customers with exactly what they’re asking for.

The problem is that the fuel and convenience industry is now saturated with programs that all look similar, and that combination — countless options, comparable formats — means that consumers are spreading their engagement wide.

The average fuel and c-store consumer now belongs to 3.3 programs in this category. The more memberships they hold, the less likely they are to be actively engaged with any of those programs.

This is the loyalty plateau, the stage of program maturity where most brands get stuck. Membership increases, and the program might even influence certain actions — like increasing trip frequency.

But it struggles to do what you really need it to do: increase overall spend over time. That’s because loyalty members don’t inherently behave loyally.

Loyalty membership is not the same as loyal behavior

In fuel, three in four customers are uncommitted, spreading their trips and splitting their spend in order to maximize their own value. Our research found that these uncommitted customers are actually most likely to join a loyalty program — more likely than committed, brand-loyal customers.

But most programs are geared around those already-loyal customers while putting less emphasis on the most influenceable part of the market. Those uncommitted customers in “middle” are treated as a monolith, not getting what they need to behave differently. But doing just that can help retailers break past the loyalty plateau.

Escaping the loyalty plateau

To elevate your program above the sea of sameness in loyalty, it takes differentiation — but what really makes a loyalty program different?

Differentiation can include the following:

• Advanced personalization: More than simply sending members a “happy birthday” message, it’s about understanding what each individual cares about and then serving relevant content and offers.
• New digital engagement channels: This means an app that’s actually worth downloading, one that might incorporate omnichannel order methods like online pickup and delivery.
• Expanded member experiences: Some retailers invest in premium perks for members who pay additional fees or maintain high annual spend. Examples from other industries that make membership feel meaningfully different include exclusive lounges or priority access.

Today, programs like Starbucks Rewards and the Nike Membership differentiate themselves very well. But programs like those don’t appear overnight. A world-class loyalty program typically requires significant product investment, advanced data capabilities, and ongoing spend well after launch. And in fairness, it’s harder to differentiate the loyalty program of a fuel brand than it is a coffee chain or sneaker company.

But upgrades to the program itself are not the only way to differentiate. Retailers can also partner with an existing third-party marketplace — a product or platform that users already visit frequently. These broader marketplaces allow retailers to extend their influence over consumer behavior beyond their own loyalty program.

With marketplaces, retailers can:

• Reach consumers from outside their orbit
• Capture the attention of on-the-go consumers
• Build habits and win more visits

Read more of Upside’s insights on the loyalty plateau and how to rise above it.