EL DORADO, Ark.— Murphy USA has uncovered insights regarding its tobacco customers as the result of completing the rollout of its new Murphy Drive Rewards (MDR) loyalty program, officials said on the company's April 30 investor 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 retail locations in March, with more than 6.5 million customers participating.
- Murphy USA is No. 5 in the Top 40 update to CSP's2018 Top 202 ranking of convenience-store chains by number of company-owned retail outlets.
While it was too early to understand the effect of the program, Andrew Clyde, president and CEO of Murphy USA, said MDR data was already providing valuable customer insights. For instance, of Murphy's tobacco customers, 20% did not purchase fuel, he said.
“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.”
To be a participant, people sign up with their phone number at the point-of-sale inside the store or at the dispenser. “And once you've done that, we start capturing points on behalf of that member,” Clyde said. “And we have a lot of members that do that and they’re doing it because that’s another way that they can earn immediate discounts on certain tobacco and other products.”
El Dorado, Ark.-based Murphy expects the MDR will have a positive effect on volumes and margins because 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.”
For instance, if a customer has bought only single packs—never a two-pack, three-pack or carton of tobacco—the MDR can target that specific customer and initiate an automated communication to drive behavior change, Clyde said. “So we have tried many, many things like that, and what the manufacturers recognized as a result of that targeted, differentiated offer to change very specific behaviors is that we’re going to be the highest-marketing return on investment for their incremental dollar,” he said.
Prior to MDR, he said, Murphy 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.”