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Murphy Touts Loyalty Findings

Nearly 20% of chain’s tobacco customers don’t buy fuel, officials reveal
Murphy USA website
Photograph: Shutterstock

EL DORADO, Ark. Customer insights have started flowing in with the completed rollout of Murphy USA’s new Murphy Drive Rewards (MDR) program, officials said on the company's April 30 quarterly earnings call.

The rollout of the mobile app and supporting systems moved through the company’s three regions and 1,400 Murphy USA and Murphy Express locations from March 1 through March 29, with more than 6.5 million customers participating and a conversion to “full membership” status of 21%. That percentage meant more than 1 million people downloaded the app and completed all the required information.

  • Murphy USA is No. 5 in the Top 40 update to CSP's 2018 Top 202 ranking of c-store chains by number of retail outlets.

“This still means we have over 5 million registered customers we can communicate with and encourage them along their journey toward full membership,” said Andrew Clyde, president, CEO and director of El Dorado, Ark.-based Murphy USA, “although many of them still use their MDR number to qualify for immediate discounts on tobacco products for instance.”

While it was too early to understand the affect of the program, Clyde said MDR data was already providing valuable customer insights. For instance, he said that of the chain's tobacco customers, 20% did not purchase fuel.

“Imagine what might happen if we send a targeted offer that invites them to experience a discounted fill-up experience at Murphy USA,” Clyde said. “It would mean higher conversion between merchandise and fuel, a higher share of wallet and more sticky customers.”

Also during the call, Malynda West, executive vice president of fuels, chief financial officer and treasurer for Murphy USA, said revenue for the first quarter was $3.1 billion vs. $3.2 billion in the year prior. She said the decrease was largely attributable to lower retail-gasoline prices that were partially offset by higher merchandise sales. Average retail-gasoline prices per gallon during the quarter were $2.15 vs. $2.34 in 2018, she said.

Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, was $59 million in the first quarter of 2019 vs. $45 million in first-quarter 2018. Adjusted EBITDA for the first quarter was higher than a year ago due to the higher fuel volumes and higher fuel margins.

Murphy USA expects the MDR will have a positive impact on volumes and margins as they “successfully appeal to our different customer segments in a manner that provides value to them, our supplier partners and our bottom line over the life of the customer.”

Clyde said that prior to MDR, they had “countless examples of changing behaviors on a small scale, but the [MDR] opportunities that lie before us to change behaviors across large groups of customers based on the segmented and targeted offers is immense.”

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