'What's In It For Me?'

CITGO tweaking card rules, targeting new customer segments, offering loyalty aid

Carole Donoghue, Petroleum Editor

HOUSTON -- CITGO is tweaking its jobber menu this year. It is changing its customer target groups and relaxing some credit card rules, and the company plans to offer special loyalty promotions.

These changes are part of CITGO's tightening of its branded image standards for jobbers this year, as reported Friday in CSP Daily News (see Related Content below for coverage).

Credit cards: Under the Durbin Amendment, which became law last October, marketers are now allowed to set a minimum charge limit on cards. CITGO has told its jobbers that they can require at least a $10 purchase on the CITGO proprietary card; however, some marketers fear there would be a consumer backlash.

"I think it would just tick off customers, and it's not worth it in the long run," one jobber told CSP Daily News.

CITGO also said that it plans to unveil redesigns of its CITGO Plus and the CITGO Celebrity cards this year.

Customer segments: CITGO said shifting attitudes, increased focus on the economy and personal finances and heightened concern about corporate behavior and the environment are changing the marketplace--what CITGO calls the "What's In It For Me?" syndrome. It has identified three new consumer segments it says marketers should target for high-potential customers:

  • The "C-Store Chillers." These are often young males of Hispanic, Asian or African-American descent who like to hang out at convenience stores and communicate using social media. They represent 13% of the population.
  • The "Guardians of Good."  These are young adults, 62% female, "liberal in outlook, socially active." They represent 14% of the population and are "Democratic leaning," rely on alternative news sources such as NPR, see themselves as protectors of the environment and are involved in charitable causes.
  • The "Loyalty Royalty." These tend to be in their 40s and married, with women comprising 60% of the group. They are professionals, skew Democratic and like music and entertainment mags, such as People. They make up approximately 13% of the population; and,
  • The "New Influentials." Account for 19% of the population. They include consumers who would recommend at least one brand of gasoline, see themselves as experts in current events, politics or environmental issues and visit social media sites to share their thoughts on brands.

On the loyalty front: CITGO's plans include a promotion that will reward customers with a $15 CITGO gift card for every eight Visa card purchases of $20 or more, inside the store or at the pump. Customers must register their Visa card at a CITGO rewards website to take part in the promotion, which will be advertised through TV, radio and billboard advertising and will run from June to September.

CITGO has partnered with Exclusive Connection$, a firm that the refiner said will help marketers develop and implement loyalty programs. The company offers a bundle of services, including program recommendations, card design and rollout plans, issuance and registration support, point-of-purchase (POP) material, training programs and budgeting and cost analysis. CITGO already has similar deals with Centego, Outside Networks Loyalty Solutions and ValueCentric Marketing Group. If marketers want to set up independent loyalty offers, CITGO will contribute $2,000 toward the cost of the program.

Marketer incentives: CITGO has not made major changes on marketer incentives. It will continue to pay $15,000 to $25,000 for new-to-CITGO locations tied to monthly volumes of 50,000 to 100,000 gals under its "grow Bucks" program. Marketers can also receive $.0025 (25 points) per gallon on monthly volume for 36 months if they install the company's new Centennial image design, launched in 2010.

CITGO has "significantly increased" its investment in brand marketing programs over the last few years and done so again this year, said Alan Flagg, the company's top marketing executive.

CITGO research shows that its new Centennial station image, loyalty, mystery shop and rewards programs attract consumers to the CITGO brand and can help marketers improve their operations and profitability," Flagg told CSP Daily News. The Centennial image, unveiled in 2010, has helped CITGO add nearly 450 new locations to its branded network in each of the last two years, he noted, and marketers who have adopted it have seen "appreciable increases in volume and inside store sales."

Currently there are approximately 400 CITGO-branded marketers in the United States, with approximately 6,000 retail locations, Flagg added.

Based in Houston, CITGO is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. The company is owned by PDV America Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela SA, the national oil company of the Bolivarian Republic of Venezuela.