Audio Transcript

#204: Loyalty Lessons from "USA Convenience Chain of the Year" - Yesway (48m)
Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world. This episode is brought to you by Collinson, worldwide leaders in loyalty, creating and orchestrating loyalty initiatives and programs for some of the world’s biggest brands in travel retail and financial services. Doing it globally for over 30 years.
Paula Thomas

00:00:43
Want to know more, go to Collinsongroup.com. Hello, and welcome to episode 200 of Let’s Talk Loyalty, a conversation with one of my favorite people in the world of convenience retail, Derek Gaskins has worked for some extraordinary brands, including Procter and Gamble, Rutters, GiantEagle and the National Association of Convenience Stores. Today, Derek is the chief marketing officer of a fast-growing chain of fuel stations and convenience stores called Yesway with over 400 locations from Iowa to Texas.
Paula Thomas

00:01:34
As you’ll hear both the mindset and the mechanics of loyalty are a core part of Yesway is extraordinary growth. Derek’s knowledge of loyalty and convenience. Retail is second to none. So today you’ll hear his insights on some of the smartest ideas he has seen and how he leveraged his loyalty to support Yesway is ambitious future plans. So, first of all, Derek Gaskins, I would love to just welcome you to Let’s Talk Loyalty.
Derek Gaskins

00:02:10
Thank you, Paula. Certainly glad to be here and looking forward to sharing some best practices and insights with you. And I may also learn something from you because you have become an expert with this challenge. So thank you for having me today,
Paula Thomas

00:02:23
Delighted to have your Derek tell me which part of the United States are you in today.
Derek Gaskins

00:02:29
Today I’m actually in Beverly, Massachusetts, so right where our headquarters is and my main office, but that’s a great question because I’m always flying around. I’m literally getting on a plane end of the day and heading down Fort Worth Texas. We have one of our newest stores. We’re going to have a grand opening celebration, and I’m going down there for that, with a big concert and everything that leads in Thursday, Friday throughout the whole weekend. So wonderful and stuff, and never a dull moment.
Paula Thomas

00:02:57
It for sure. So in a couple of minutes, I’ll get you maybe to introduce the Yesway brand, actually, Derek, because I have to confess living outside of the United States. I wasn’t familiar with it before you joined, but before we get into all of your current role, as you know, we always start this show talking about our favorite loyalty programs. So what do you want to share with our listeners?
Derek Gaskins

00:03:19
I don’t want to be boring, but I think my favorite one and in all candor would honestly be the one that I’ve been a member of the longest. And for me it would be American Express membership rewards and membership has its privileges, right? Everyone knows that tagline and that very thoughtful brand call to action that they’ve had for decades now. And then I have been a member and, you know, it’s one of those things that you look at the cards sometimes, and I’m like, wow, I’ve been a member of this for 21 years now. And you know, not bragging, but I’ve racked up enough points that they have real value. And so the way that I travel, you know, they give me benefits that are personal and that are customized to me.
Derek Gaskins

00:04:08
So for instance, I can get membership into airline lounges and clubs, and when I’m on the road, as often as I am, that has tremendous value that I don’t have to pay for. And I can use my card and obtain entry into the Centurion Lounge or the Delta Lounge and various other Airline clubs. And secondly, I’m also able to then use it for things like wifi with their go-go network. So when I’m traveling on the plane, because I have a platinum card, those things are part of their rewards, scheme, loyalty wise. I can use points for payments. I can use points to offset certain things.
Derek Gaskins

00:04:51
So total flexibility. And then there’s the surprise and delight aspect of it, of around holidays, or maybe my birthday, for instance, they may say, you know, use half as many points to get gift cards and I can then choose. And, you know, oftentimes I’m using those around the holidays for family gifts. And it’s so funny because even my kids know it now. So they almost expect to get a target gift card or a Nike gift card or Ruth Chris steakhouse gift card that I use my Amex points to trade in for to get discounted gift cards. And back in a day, they would mail a physical card and you know, much like the modern times are now and everything is mobile.
Derek Gaskins

00:05:34
And so they’re able to send a mobile gift card in real-time that can be used. And, you know, for those reasons I would put them up as, as my favorite is not quite in the convenience channel, but I think that there are aspects of it that I’ve always looked at as a marketer to say, as I’m building out my loyalty program, I want to make sure that I’m able to segment my customers, understand what they buy, who they are, where they shop when they shop and then use the points in a relevant manner to get more business from them.
Paula Thomas

00:06:07
Wonderful. And I actually always think Derek that the personal experience and the personal examples are the best, because I think we can then speak from the perspective of the value proposition because I don’t know about your experience. I know you have an incredible career that we’ll talk about, but you know, sometimes I think what happens is, you know, the marketing team come up with these very valuable propositions, but they don’t always make it to market in the way that the originally conceived, but certainly American express as a brand that does exactly that.
Derek Gaskins

00:06:37
Yes, they do. And I mean, that, that is great encapsulation of some of the challenges is around the vision of what the consumer wants. Yeah. I always feel that we have to be stewards and guardians as marketers to give them precisely that.
Paula Thomas

00:06:55
Exactly, exactly. And I also think if it reminds me of the article that we did together, actually back in 2018, Derek, and I remember asking you, you know, this whole idea of what do you know for sure about loyalty and what you said to me at the time was you really need to know who your best customers are. So I think that’s exactly encapsulated in your experience with American Express 21 years, you know, benefits that you can articulate. Because again, I think that’s the challenge For many per many and I’m sure and convenience actually even more so we’ll get into the specific industry challenges in a minute, Bush them. I also like what you mentioned there about the intergenerational piece.
Paula Thomas

00:07:37
So, you know, now your family know the value of having an American express card.
Derek Gaskins

00:07:41
Exactly. And I mean, for them, it was their first car. And so you start to think about the power of that. And, you know, I’ve, I’ve always looked at us as convenience retailers skew, you know, there’s the blue-collar skew, there’s the younger generational skew. And you know, my first exposure to what I would call world-class C-store retailers was actually when I went off to college because being a city guy, a lot of our convenience stores back then were not as curated as today’s stores are, meaning the food service programs were nowhere near what they are now, but when the college campuses they were. And so when I look back 30 years ago, now I went to University of Iowa and in Northwestern, I mean, there were world-class convenience brands that were pretty mind-blowing.
Derek Gaskins

00:08:30
I mean, for a young guy to see and say, wow, I can get sandwiches and pizza and all kinds of things, 24/7, how great it is. And it was a great value, but that becomes the gateway because then as I advanced through my career and, you know, started out not even thinking about the channel, my experiences as a consumer shaped it. And I think now it’s the same thing, you know, with our loyalty program, part of it is to make sure not only do we cater and understand our best customers and then segment and try to trade people up, what you want to also capture the youth because they are the shoppers of not only today, but tomorrow.
Derek Gaskins

00:09:13
And then as they migrate through life and become parents, they bring their kids along with them. Then you create a very virtuous cycle.
Paula Thomas

00:09:21
Love it, love it. So it’s probably the right time Derek to ask you exactly about Yesway. And because as I said, for those of us outside the US we’re probably not familiar with the brand or Yesway Rewards, which is of course what we’re here to talk about today. So would you mind just giving us an overview of the business?
Derek Gaskins

00:09:41
Certainly. Yesway is a private equity-backed group that conscientiously chose this business. So our CEO, Tom Parkleigh is a visionary and he literally, after the recession in oh seven and oh eight two things that are one, his instinct told him because it’s primarily real estate. And so in oh seven and oh eight, which looking back on it now, it’s pretty obvious. It was the height of the market. He cashed out and his investors were, some of them were telling him, he’s foolish, don’t do this. You know, the market is still raging and roaring in his instinct and knowing the fundamentals, he felt it was time.
Derek Gaskins

00:10:23
Wow. And so that’s when he got out and some of our origin stories go all the way back then, because I think then as the market cratered, he was able to come back by things, pennies on the dollar and advanced Brookwood very rapidly, fast forward to about 2015, 16, his vision was to diversify. And I think like many of us who know this industry very well, one thing I’ve spent a great deal of time trying to explain to others is that we are recession resilient. If not proof, Good times or bad times, we are an essential retail place and consumers come to us.
Derek Gaskins

00:11:05
And in their times of need, if it’s a natural disaster to me, I can go back to nine 11 to the recessionary periods, to hurricanes tornadoes. You know, we fuel the nations and whether it’s the police, fire EMS, or what have you, we are that place that, that sanctity in. I think COVID just proved that out too. Because as an industry, we have had some of the best years in our entire history with other retail struggle. So in terms of Yesway, that was the vision. It was a white paper concept in many ways, and it was a let’s raise money. Let’s grow by acquisition, a very smart group on a Brookwood side of private equity, real estate investors that understood the underlying value of the real estate also understood that this channel was highly fragmented.
Derek Gaskins

00:11:57
And with capital, you could go in and roll it up relatively quickly. So it must like you, when I first got the call about the opportunity, I’d never heard of it, right? And the next guy that’s literally traveled the world to research and study global convenience retailers. I was like, what’s Yesway, I don’t even know this brand. This is insane to me. And, you know, as I started talking with the team, I realized that they were talking about what they would be versus what they were, and I bought into what could be and what they would be and wanted to play a role in making that happen. So when I joined in 2018, you know, we had dozens of stores and a CEO with a relentless drive and a vision and backing up the team to make it happen.
Derek Gaskins

00:12:47
And so now, as you fast forward, we were 2021 chain of the year. So that’s the most prestigious convenience award and all the retailing. And I was very proud of the whole team to land that hardware. And we celebrated this past fall at the next show and we have over 400 stores. Now we are in a nine-state region throughout the US from the Dakotas and Iowa back to where I went to school again and down in Kansas, Missouri with a huge concentration in New Mexico and west Texas. The thing that really catapulted us is we bought a beloved brand called also Allsups was a 60-year-old brand.
Derek Gaskins

00:13:35
Then Lonnie also was people still call them today. also started and grew rapidly and like many other of US-based convenience businesses. It started out as family-owned and operated. He dominated his region in his region was primarily Eastern, New Mexico and west Texas. And in almost all of those little small rural towns and in the oil fields and the Permian basin and near military bases and small college towns and near high schools, he established corners and he purchased the corners and built all some stores and had a legendary food service program grounded on, in true west sexist style, deep-fried burritos and semi time.
Derek Gaskins

00:14:21
And to this day, that’s one of the signature things that Yesway through the acquisition of all subs accelerated our growth because now we had a viable foodservice offering. And, you know, when you look at the convenience store landscape, you know, you have companies like Wawa or rudders or sheets, it started out as dairies and then had sandwich businesses or hoagie businesses and refresh subs that were customized made to order. And their menus grew from that. You have Casey’s, which is an Iowa based company that I think it’s top three or top four for pizza. So they’re running with the Pizza Huts and Dominoes, but in the convenience stores.
Derek Gaskins

00:15:02
And, you know, going back to when I went to Iowa, I saw Casey’s and quick trip and come and go. And some of these places for the first time they were in Iowa. And then I would actually say, you have also that even when I was at NAX, Hank and I would talk about also was the only large member, or rather not even member the only large retailer that was not a member that Mr also took pride in being independent and being a cowboy and living his life. And so in New Mexico, he dominated and had the cigarettes or food offering. And when you mentioned all sorts of people, their eyes light up, and to this day, I get soldiers that may be stationed in Germany or Japan or somewhere literally saying, can you ship me the burritos?
Derek Gaskins

00:15:54
There’s guys that have been drafted in the NFL that have done photo ops in front of our stores. There are couples that on the way to their wedding ceremony, the whole wedding party was stopped and get a burrito, take a picture right out in front of all subs. So when you have a brand that is curated and developed, it takes 50 plus years to build that. And so part of it is how do I preserve protect, evolve, and advance that? And that’s precisely what we’re doing.
Paula Thomas

00:16:28
Yeah. Yeah. I can hear the pride coming through Derek. It’s an extraordinary story. So thank you for sharing the history and congratulations on that extraordinary award. I had no idea that you guys have come away with that.
Derek Gaskins

00:16:41
Thank you so much. Yes. I mean, I’m so proud of the whole team and the work that we’ve done.
Paula Thomas

00:16:46
Yeah. Yeah. And just for people again, who might not be familiar with Derek, I will just explain that NACS is the National Association of Convenience Stores. So you used to work there. I certainly did a lot of work there again during my time with Liquid Barcodes, so extraordinary to have that perspective. And as you said, that visibility into the industry, and certainly Yesway is obviously, you know, forging a path ahead, you know, in terms of just like building your own brand on the back of those incredible Allsup’s products. So really
Derek Gaskins

00:17:18
Yes. And, and some of my recent travel that’s the challenge is that we honestly operate both brands. So in some ways, you know, Yesway being a white paper concept had a little more contemporary flair, meaning we had a loyalty program. We had a private label strategy almost before we had stores. And so part of five stores, this is why Yesway will stand for. And we had three pillars, it was going in with the loyalty scheme, going with his own brands. And we guess we label and then go in with the food service to unify these disparate assets and establish what Yesway is also already had.
Derek Gaskins

00:18:02
The food program did not have a loyalty program, had a private label, not as immediate consumption focus as Yesway is. Most of the also private label was actually more grocery and fresh and fill in things like bread and milk and eggs and having a bakery and those types of products. So marrying them up and now Yesway stores are selling Allsups product, and also stores are selling Yesway product. They also have the world-famous burrito program is now being introduced. We’ve already completed about 25 Yesway is that have the full also food program in it and buy in the year, the goal is to have them all done.
Derek Gaskins

00:18:48
And the loyalty scheme has been incredible because we have an also program. This was one of the biggest challenges. It was that we keep it Yesway and operate that as the brand do we allow each brand to live on its own. So I think once we made the decision that we were going to protect and preserve the all subs legacy and brand, then it was okay, well, we’ll do an awesome branded loyalty program. However, we want to be clear to the consumer. So maybe have both logos on the car and on the back of the card, all subs cars, working Yesway Yesway cards, working all sips, the log-in screen, the mobile app being very clear so that when there’s a store locator tool within our loyalty app, you can see a Yesway logo that indicates Yesway branded stores.
Derek Gaskins

00:19:38
You see all subs logos that indicate those branded stores. And while it’s a little more challenging, I think what I was surprised by is that the consumers got it because when the headline was Yesway acquires, also Every consumer’s first fear was, oh, I hope they don’t take away the burrito. Right? The bread don’t worry. I mean, I got so much mail, you know, I was saying, not only will we not do that, we’re going to build upon all of those things. And I think now with the loyalty program, that’s a tangible first step that they’re seeing that things are going to get better.
Paula Thomas

00:20:15
Great, great. But what I also love, actually, Derek, what you said there was that as a whitepaper concept, that loyalty and a structured rewards program was part of the proposition from the very beginning. Like I’ve mentioned a few times, you know, just maybe talking to people, you know, at the maybe startup stage, let’s say of a new store and they have all of their business plans written with their acquisition strategy, but very rarely do they start with their retention strategy in mind. So that frustrates me, you know, because it’s very hard to fix down the track. So wonderful to hear that. Yeah. Yesway, it’s hard to, from the very beginning
Derek Gaskins

00:20:54
Really is, and, and you are absolutely right. That is the biggest challenge is the retention strategy. So, so often it’s an afterthought and it should be a primary thought.
Paula Thomas

00:21:04
Yeah. Yeah. Well, that’s exactly the words. It is an afterthought. So, how is it performing, given all of the change? And again, I want to acknowledge whilst, you know, the whole industry has done through COVID for me, I hadn’t realized that the legal positioning would be so powerful in your favor to remain open, to remain trading, to be valued as an important part of the community when it seemed like the world was falling apart around us. If I’m honest.
Derek Gaskins

00:21:33
No, I mean, you’re, you’re absolutely right. I mean, when I think back two years ago to this same time, that’s when the world officially started shutting down. I, I remember I was at an industry event, which I’m going to do later on, but it was the NACS Day on the Hill in Washington, we were in the halls of Congress and the Senate building, meeting with legislators, talking about industry initiatives and COVID was still relatively new. We didn’t know how dire things could be. If you would’ve told me at that time that you’re going to shut down your office for six months or a year or even one month, you’re out of your mind.
Derek Gaskins

00:22:14
No way. And within that four day period, we went from shaking hands talking to senators having meetings. So by day four, it was literally, the offices are closed. Get back to your respective homes and your districts, and best of luck to you. And to your point, I think managing change, this industry has been absolutely remarkable. And the agility that we’ve shown collectively to demonstrate that, Hey, we are essential retail. Then I think the second piece of that is, and we’re going to take care about people. We didn’t wait to see what the government was going to do. I remember in the early days, our CEO going back to Tom Circla his number one question was, what should I be doing for the team members in the stores that I’m not?
Derek Gaskins

00:23:03
And we did things such as giving them credit, using our loyalty program. We’re able to identify team members and we loaded hundreds of dollars on each of their cards that they could use in our stores. So they needed, they needed food and groceries, any food service, they were able to buy that for themselves and their family. We did two weeks paid time off. No questions asked that way. If you were worried about being sick or you had any symptoms, you didn’t have the pressure of having to come into work. These things now sound routine. But two years ago, a retail worker was not getting two weeks paid time off, not unless they had been there for 10 years.
Derek Gaskins

00:23:45
We’re a manager. We did that, everyone frontline on up and giving PPE and making sure that our folks were protected. My marketing team, getting signage, the operations group, being in the stores. I mean, I actually took it as a, as a duty that I couldn’t just sit at home and zoom or not go into, you know, the office is closed, but the stores weren’t. So if the stores are open, we need to be out there leading from the front, letting them know where truly in this together. And so those were things that when I look back on, I’m very proud of, and the industry, you know, stood tall.
Derek Gaskins

00:24:27
And I think the reward for some of that was we performed that civic duty. We often do in times of crisis. Like I said, when it’s a tornado or hurricane or natural disaster, oftentimes the convenience store is the only place you can go to get fresh water or get food or fuel for your vehicles or for your generators. And Cobra was no different. And I think for those retailers in a, we were very fortunate that our strategy was more rural focus. So we focus on small, rural and suburban towns, more than urban markets, which meant that we were the grocery store. We were the convenience store as well as the restaurant in many of these towns.
Derek Gaskins

00:25:10
And so when people needed something hot and fresh to eat and they were sick of cooking at home, they will come to our stores and buy the burritos and buy the chimichangas when they needed milk, when he needed eggs, when they wanted to buy, you know, true groceries, we were 24 7. And because we had this program called hospitality heroes, where that’s what we call it, our team members, we call them hospitality heroes. So they knew they were heroes. We recognize them as such. And the word hospitality was because they were creating a service-oriented place and a safe place for customers to come and shop.
Derek Gaskins

00:25:51
And a lot of customers were say, I felt threatened going into a large supermarket or mass merchandise that thousands of people could be in versus a come in your stores and the hospitality heroes, they were doing visual things, wearing masks and gloves, cleaning, commonly touch surfaces, wiping down the coffee bar, holding the doors open. So customers didn’t have to touch them in a person’s throat. I can get in and out quickly get the few items that I need and be on my way. There may be some psychology there that’s misplaced, but I know I certainly felt safer in smaller shopping, local places, right in my community versus traveling 20, 30 miles away where thousands of people who I don’t know could be there.
Derek Gaskins

00:26:38
And I think that the convenience retail and total benefited from that, but it wasn’t a lazy benefit. You had to be agile because in the early days it was all about pantry loading and stocking up. Then as the summer came around, people started to move around a bit. And then it was about immediate consumption and on the go and foodservice again in the fall, they shut back down again. And so it went back to a lot of more packaged beverages and, you know, things like beer. I never thought my stores would sell the volume of beer or wine that some of them did. But you know, when every bar sports venue, restaurant is closed and people are nowhere else to go, they’re coming to us for those things.
Derek Gaskins

00:27:22
And then you have the supply chain. So some things we had to be more flexible than ever. And I would talk to my merchandising group, my price book team, and say, we need to be prepared to substitute products as quickly as we can. And yes, brands absolutely matter. And our private label and our own brands, I want them to always have a shelf presence. But if you can’t get certain things, you need to be agile and authorize another product. Whether it’s a coat, you know, something from the co-op or a regional brand or a niche brand. So that if someone’s looking for a can of soup and I can’t get Campbell’s, then I better have the next best thing so that they can at least get something.
Derek Gaskins

00:28:04
So that was probably about a year and a half. And even still, there are supply chain implications on certain categories and it’s mercurial it’s, it is not, oh, it’s Pepsi or Coke, or it’s, you know, MillerCoors or Anheuser or it’s any brand. It can be your wholesaler. It can be, you know, something that you’ve had no problem getting, or it can be a commodity product. Something like, you know, getting chicken or getting butter that, you know, used to be something you took for granted. And I had dozens of sources now, and it’s too
Paula Thomas

00:28:42
W what I, what really is coming to mind for me, Derek, as well as the extraordinary operational challenges, the integrity around how you took care of those people, you know, as you said way, even before I think anybody else, what also I’m hearing coming through is that, that place to go for people who are trapped at home or were trapped at home. Like I remember myself, you know, my lowest point, perhaps professionally was, you know, losing my job one time back at the recession you referred to. And what I used to need was a little bit of human contact every day, you know, going out to the convenience store, picking up whatever I needed, having a little bit of chit-chat and the psychological support of knowing those people around the corner was actually also incredible.
Paula Thomas

00:29:27
So I definitely think you guys did that as well.
Derek Gaskins

00:29:31
No, and you’re right. I think that’s psychological. That human aspect of loyalty is not to be taken lightly and many people, it was overwhelming how consumers were thanking us with sincere gratitude. And to your point, it might’ve been as simple as I was able to get a cup of coffee. Totally. You don’t understand how big of a deal that was to be able to leave my home with fresh coffee and feel I was in a comfortable, safe, clean environment to do that.
Paula Thomas

00:30:03
Totally, totally. And that’s where the long-term emotion of loyalty comes through. So, so what I wanted to move on to Derek was, was the whole, I suppose, evolution of the role of Yesway Rewards, I suppose, over the last couple of years, you know, from a consumer perspective, what would you say was the role of the program? And then I guess, as we hopefully come out the other side of it, what do you see coming up for Yesway Rewards?
Derek Gaskins

00:30:30
Yeah, that’s, that’s a great question. So I think that from a consumer perspective in the early days, the role of the rewards program was literally to be the Trojan horse for the brand. And it was to, I would say to a swatch, a lot of fears that people had, right? Here’s this big, bad company Yesway that I’ve never heard of. That just bought my store, my store, What are they going to do to screw it up? Right. We’re not going to screw it up. Let’s start to add value, tell the brand story, and then start introducing private label and to have everything that you would think of with every other loyalty program by this save on that club programs, buy five of these and the next one’s free, you know, a subscription type of scheme, anything that others do, we were even doing cents off, obviously.
Derek Gaskins

00:31:33
Right? I mean, we sell fuel. So it’s, you know, by, you know, red bull by monster beverages and say, you know, you buy two of those get 10 cents off per gallon. Yeah. So these were things that, okay, you’re delivering value. You have enhanced where I used to shop and have not diluted it down. And so that was the early challenge. And then I think COVID hit and I liken that to the acceleration age because then the challenges became greater. Well, why cannot order? Why can’t I pay ahead? Why can’t I have things ready and waiting for me? So make it even easier for me to shop.
Derek Gaskins

00:32:15
And I think every marketer that had a loyalty program felt tremendous pressure. And I used to say things that were on my roadmap that I would say, yeah, that’s, you know, maybe I’ll do delivery five years from now, not really a big deal. Then it became, how can I do this in five months or five weeks? So that’s what I’m saying. It was the acceleration age because these things aren’t innovation, new fangled. It was just, it was on my roadmap, but I moved it way up in terms of the prioritization and getting it done. So we started to add those aspects to it. And I think now it’s, you know, I don’t want to declare victory too soon, but as we are emerging from COVID and thinking of getting back to moving about the are some foundational aspects that are starting to come back where, you know, things like stack and save, which is our fuel rewards program, of course, now that in the states you have many regions where gasoline is not only over $4 a gallon, but it’s over $5 a gallon.
Derek Gaskins

00:33:19
So people are looking for more ways to save. And they’re saying, Hey, can I get rewards again? They’re giving me 20 cents off a gallon or 10 cents off a gallon for the things that I buy. So I’m working with our manufacturers to subsidize and make that happen. And it’s a win-win because, you know, if I go to a red bull or I go to a monster or a Pepsi and say, Hey, Pepsi, w let’s work on this together, it’s targeted. And I’m saying, I’m not trying to get people to switch from one brand of Pepsi because that’s not going to happen necessarily unless I’m out of Coke. Right. But I do want to reward Pepsi most valuable consumers.
Derek Gaskins

00:33:59
And if your goals are to sell them more stuff, so is mine. And if you’re saying, get them to get that second, we’ll get that third or buy a 12 pack. And, and, and a typical markdowns and promos, it would be things like $2 off or, you know, buy one, get one, right? Those are high costs to subsidize, especially if you offering it to everybody. Well, now I know who my Pepsi consumers are, or I know who is willing to go into that channel and I can give them something that has a much higher perceived value, like savings on fuel and an actual lower value.
Derek Gaskins

00:34:39
So let’s say instead of $2 off a 12 pack, I can now say 10 cents off per gallon. The average Philip might only be 12 gallons. That’s a dollar 22 know 50% of the population instead of $2 off for two, 100% of the population. So now Pepsi’s spending less I as the marketer or the merchant am spending less to market down, but selling more. And again, it creates a cycle where it drives them to pump back to store, to pump and back to store, which is true loyalty. And it gives them a reason to say, I shop at Yesway. They understand me, and they deliver me more value, which is what the goal is.
Paula Thomas

00:35:21
I love it. And what I think it does as well for the manufacturing brands. Derek, if I’m hearing you correctly, is it’s a reassuring, I suppose, closed user group, where they can do things that are perhaps richer than they want to do in a public environment. You know, and we all know how expensive it is to put billboards up and the stuff that these brands need to do as well, but you can do incredibly cost-effective marketing for them.
Derek Gaskins

00:35:47
Exactly. And I mean, that’s, that’s the potential of loyalty, you know, going back to your first question around my favorite program, I think that American express figured that piece out. So they’re able to position things that have really high perceived value and give them to their best clientele and their best customers and within our space, that is what we need to do more of.
Paula Thomas

00:36:09
So if you had a magic wand now, Derek, and I’m going to put you on the spot, because I know we always all have these very long wishlist and it’s always incredibly busy and there’s always multiple priorities. But if the was something that you could do with Yesway Rewards, you know, given where we are now, like what’s your immediate focus?
Derek Gaskins

00:36:30
The immediate focus is, you know, probably what we’ve been doing the past three years, and it’s a mobile-first strategy. And it’s understanding that cards become obsolete. That loyalty schemes are actually the brand so that when people think about their, their occasions for the products that we sell, I want to be top of mind or front of mind. And so that way I don’t want to just be a homogenous or commoditize shop that sells the brands that they love. I want to be the brand that they love, that is irresistible, where they go to get other brands. And so from that aspect, that’s where I would wave my magic wand.
Derek Gaskins

00:37:13
So they Yesway becomes part of their everyday life. And it’s, it’s, it is so intrinsic that when they need milk, when he need Oreos, when he need Clear it’s Yesway is where I go. And they’re able to interact with it through their app, the phone number or any other way, I’ll say, make it easy to do business with us. And if you make it easy to do business with you, you do more business. I mean, that’s the businessman’s credo. So if I can make it easier to do business with us on their terms, we want to do significantly more business.
Paula Thomas

00:37:54
Yeah. I loved your word irresistible because, you know, as marketeers, you know, we have to have that level of vision, you know, there’s no point just being the next convenience store that people go to, you know, just because it happens to be convenient, you know, in terms of location. So I love that idea of where they actually get the brand love. And my other, I suppose, maybe even final question for you, Derek is what always intrigued me. When I worked in convenience, retail was, it was in my mind relatively late to the loyalty industry. So we know that airlines have had it for 40 years and hotels and all of the other kind of wonderful sectors of retail as well. But I think because of the, the speed and the importance of removing friction, of course, convenience was always something where you almost didn’t want to be asked for, you know, a form of identification in any way.
Paula Thomas

00:38:44
So it’s taken a long time for the industry to catch up, but what’s your view.
Derek Gaskins

00:38:49
Yeah. You are. I mean, you, you nailed it. Right. And I, I would say I became a loyalty passionate person because my background was actually grocery and I was with giant Eagle and giant Eagle had a rewards card for the grocery store shoppers. We lost a chain called gecko, which giant Eagle to go or get in, get out, get going G T G O. And to your point, the best of breed that we compete, we weren’t Pennsylvania. So we competed against sheets. We competed against rudders. We competed against Wawa. None of them had loyalty programs at that time.
Derek Gaskins

00:39:30
And I think you’re right. It was speed of service was out loyalty, right? It was the fact that you could get, I mean, deco’s tagline was get in, get out, get going. And it was really, that is a promise that we’re going to be fast. But I think early on, we understood, I can capture the grocery customer by enabling their loyalty cards to work within my stores. And I think in many ways, that’s how Loyalty was born in his channel. It was one of the hypermarkets having their cards work. And today they’re hypermarkets much like over the rest of the world and certainly over in the UK and Europe and the mid east, you have from Kara, Florida, Tesco to Sainsbury, they operate grocery as well as convenience.
Derek Gaskins

00:40:19
So they were the pioneers globally. And I think here in the states, you, you nailed it. That speed was the differentiator until it wasn’t. Then when everything is fast, then it becomes, okay, well, how can I get them to come in to rudders instead of going to get, go, going to Wawa. What’s my challenge there. And I think now when you fast forward, we are perfectly suited because everything we sell is a commodity, even fuel, you know, 10 years ago, people would argue with you and tell you, Exxon fuel is different or better than shell or Valero fuel or a launch fuel is the best, right? So you had all these things.
Derek Gaskins

00:41:00
Now. I think people understand it’s a commodity premium gas is premium gas wherever I get it. And, you know, yes, with brands absolutely on the inside as the stores still matter. But I think as convenience got better at food service and started to actually do own brands and private label beyond food service, you know, in the early days owned brands and mint my coffee cup, right? Yeah. My coffee is as good as Starbucks. And so people would want to come to me because they want a Yesway cup of coffee. You know, I think while, while I was selling a thousand cups of coffee per store day, that’s more than a Starbucks style. So that tells you that they have really good coffee, but you layer on the loyalty.
Derek Gaskins

00:41:46
Now you can add the new modern definition of making it easier or faster to be. Right. You know, I was tempted to say Starbucks was one of my favorite loyalty programs. I don’t actually shop there, but my wife and my kids do, and I am struck by, they don’t use money when they’re in there. They don’t use a credit card in there. Everything is app-based. And you know, it’s ingenious because what Starbucks has figured out is they are now in some ways, a bank where they’re carrying a balance and they have reduced their swipe fees. That still is the bane of every retailer’s existence because using a gift card at a much lower top of value and you’re storing value there, and now it’s, it’s irresistible, but I need coffee.
Derek Gaskins

00:42:36
I’m going to make a Starbucks running. I’m using it. I think that is where we are now. And so your point when you’re late getting in the game, but with most names, once a convenience industry sets his sights on something, we become extremely agile. And we get there. I mean, think about it like this 7 11, 3 years ago, didn’t even have a loyalty program five years ago while I didn’t even have a loyalty program, you know, five years ago, Yesway, didn’t, didn’t have stores. Now all of these companies have world-class loyalty programs and doing things that are innovative from order ahead to curbside, to drive-throughs.
Derek Gaskins

00:43:16
While I was building drive-through only stores, seven 11 is doing things without fuel. And it has an app-based loyalty first scheme to drive their sales. And I’m also, I mean, now I almost can’t think of a, of a Convenience Chain that does not have a loyalty program 10 years ago. It was hard to name ones that did.
Paula Thomas

00:43:38
Yeah. Yeah. And I had missed that IM very important distinction, Derek, about the end, the saving on fees that a Starbucks have managed to first of all, get positive cash flow. In fact. So to get people paying in advance, which is extraordinary in hospitality, but saving on the merchant fees as well with credit cards, that’s absolutely genius.
Derek Gaskins

00:43:58
I think the last quote that I saw about Starbucks is 60 with Senator transactions are now mobile with their gift card. That is tremendous. I mean, imagine as an industry, if over half of our consumers were using something that instead of it being a percentage based fee as volatile and variable, and like right now we’re fuel is at an all time high is costing the consumer and us more than it ever has something that could be as low as 6 cents per transaction or less than 10 cents, 9 cents per transaction, which is what gift cards tend be when you ride all those payment rails, that’s a game changer.
Derek Gaskins

00:44:42
It would, it would instantly increase your profitability exponentially.
Paula Thomas

00:44:44
Wonderful. Wow. So my final question is one that I know you won’t be able to answer from a Yesway perspective because it’s more of an industry question, but I guess it is just to get a sense of like, what does success look like? Let’s say in terms of the customer penetration in convenience retail, that would be, let’s say members of a loyalty program versus not like, where would you say the industries are just as a, just to give me a sense of it.
Derek Gaskins

00:45:11
Yeah. I would say on an industry average and knowing that everyone, quote, unquote, everyone, this a chain now and has a loyalty program, the penetration is still in its infancy. It’s about 20%.
Paula Thomas

00:45:23
Wow.
Derek Gaskins

00:45:24
And I think it’s some of the things that you touched on, it’s a transient customer base. You have commuters, right? You have someone driving through the town, Hey, I don’t want to join your program. I don’t need all of that. I’m just stopping to get gas and some snacks and that sort of whatever, be back here. Right? Yeah. So that’s, there’s that factor. Whereas when I look at grocery, so that, that will be my best mark. I know some of the top grocers, their penetration is as high as 70 to 80%.
Paula Thomas

00:45:55
Wow.
Derek Gaskins

00:45:55
So if that’s the aspiration, I would say it would be worthy and laudable. If you could get to 40 to 50%, you’re, world-class in the convenience realm. If you could get to 40 to 50% of your transactions are with loyalty that allows you to really understand your customer base and then to start leveraging your manufacturers and doing things in a much more savvy and sophisticated way.
Paula Thomas

00:46:22
Yeah. Yeah. It’s a wonderful target to aim for. And I think quite inspiring as well, actually, because reminds me of a famous phrase in Ireland, certainly a politician was using where they used to say we’ve done a lot, but we’ve a lot more to do so. Well, that’s all I had to ask you today. Derek, was there anything else you wanted to mention before we wrap up?
Derek Gaskins

00:46:45
No, I just want to thank you once again, it was a great dialogue and I’m glad I could play a role.
Paula Thomas

00:46:53
Okay. It was an absolute pleasure. Derek Gaskins, Chief Marketing Officer of Yesway. Thank you so much from Let’s Talk Loyalty.
Derek Gaskins

00:47:02
This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty marketing use insights and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries, a certified loyalty marketing professionals for more information, check out thewisemarketer.com and loyaltyacademy.org.
Paula Thomas

00:47:41
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