HOUSTON -- Selling gas through one of the largest oil companies in the world certainly has its benefits, but when it comes to launching a successful loyalty program, even the big boys have to work for their wins. Shell Oil Co. Chief Marketing Officer Dan Little recently spoke with magazine Ad Age about the ins and outs of the company’s loyalty program.
“Forty-two percent of all U.S. drivers frequent or come to Shell,” Little said in the interview. “But when it gets to loyalty, which is a measurement of frequency, we’re pretty much middle of the pack vs. the other majors.”
Here are four insights from Ad Age into how Shell’s loyalty program started and what Little and his team have learned working on it …
1. Thanks, Kroger
Little said Shell’s first loyalty program, Fuel Rewards, was due in part to its 2009 partnership with grocer Kroger. Shell’s link with Kroger let the supermarket’s customers spend their rewards at Shell stations, a setup that was beneficial for both parties.
“A fuel discount, we found, was very emotive for consumers,” Little said. “The price of fuel can change behavior.”
2. Instant gold
This year, Little and his team rebooted the partnership program, allowing for tiered membership.
Customers must visit a Shell station six times within 90 days to reach Instant Gold Status and an automatic 5 cents off per gallon of gas. Members who don’t visit that often are eligible for Silver Status, which offers 3 cents off per gallon.
The switch was made to stretch the number of frequent visitors. Before the new loyalty program, 10-15% of Shell’s customers made up 70-80% of Shell’s profit margin, according to the Ad Age report. The goal is to get consumers who only visit once or twice a month to make purchases more frequently.
3. Eat your heart out, Don Draper
Shell launched the revamped loyalty program with a $100 million marketing budget, with more money than usual going toward digital. “Usually it’s 20% or 25% for our national launch campaign,” Little told Ad Age. “For us, it’s almost 40% now.”
Marketing dollars are split between radio and other audio channels such as podcasts, cable television, apps like Pandora and social media—specifically, Facebook Live. Shell earned a million views when it livestreamed from the pit of the Indianapolis 500 alongside driver Helio Castroneves and his Shell-sponsored vehicle.
Little recalls in the interview that trying to advertise every feature of the loyalty program did not work as well as focusing on the 5-cents-off deal. “Instead of trying to tell everybody about every benefit and it all becoming noise, we can get them to be stickier consumers because we’re showing them the right benefits,” said Little.
Shell's fuel-rewards app allows customers to take advantage of the program’s perks without carrying a physical card. The app includes balance tracking, geo-targeted promotions and station price comparisons at the moment. The program offers a link to GasBuddy to let users compare gas prices.
Little also plans on expanding capabilities in the future by expanding the program’s relationship with the directions app Waze and eventually adding mobile payment to the app.
Houston-based Shell Oil Co. is an affiliate of Royal Dutch Shell, a global group of energy and petrochemical companies with operations in more than 70 countries. In the United States, Shell operates 14,000 locations in 50 states and employs more than 20,000 people.