In today's highly competitive environment, how are gas chains differentiating themselves to strengthen their attractiveness to drivers? One popular approach is adopting the loyalty model of supermarkets...
In researching a number of regional, national and international gas chains, I have been drawn to one program in particular -Spinx's Xtras card program. Why? Its loyalty program is easy to understand, easy to use, and it's easy for regular customers to earn gas price discounts. Spinx, a regional gas chain, makes the same offer in every one of its outlets across South Carolina, a welcome difference from those competitors who state that their loyalty card offers are available only in "participating outlets".
The Xtras card is cleverly designed. Cardholders earn just one reward: gas price discounts, one of the hottest rewards in retailing today. Its cardholders earn discounts in three ways:
AA Smartfuel cardholders can also earn gas discounts by purchasing specially-marked convenience store items in the BP (but not Caltex) outlets. In addition, offers for gas discounts are made at a range of local, national and online retail, food, and service companies, ranging from Burger King and Thrifty Rental Cars to local hairdressers and clothing stores. Unused discounts expire, at both AA Smartfuel and Spinx Xtras, at the end of the following month; eg, all discounts earned during May expire on June 30.
Spinx offers one consistent, fixed-discount per gallon (up to 20 gallons) when using the Xtras card as a payment card. In contrast, AA Smartfuel members' discounts apply only to purchases between 5 and 13 gallons. All South Carolina Spinx outlets participate while only "participating" outlets of BP and Caltex honor the program, and only participating BP (but not Caltex) outlets offer gas discounts on selected in-store items.
The differences between the two programs reflect different mindsets. Spinx focuses on consistent simplicity: the same offer in every one of its outlets in South Carolina. Its mindset is locked on building Spinx's business: the attractive rewards for purchasing items in their convenience stores helps grow their total sales. Spinx's approach integrates gas discounts into the chain's total promotional and pricing strategy, something that is much more difficult and complicated in partner-based programs. When partners are involved, such programs are often treated as a "department" rather than being at the core of the business despite gas pricing being such a critical competitive issue.
Spinx began its gas discount odyssey a few years ago partnering with SC-based BI-LO supermarkets for the fuelperks! program that works this way: when buying groceries at BI-LO, present your BI-LO Bonus Card at checkout to earn 5c off/gallon for every $50 spent. Spending is cumulative, eg, if you spend $500 in a month at BI-LO you earn 50c off/gallon in fuelperks! Then, when you fill your tank at Spinx, swipe your BI-LO bonus card at the pump to redeem the 50c off/gallon discount (up to 20 gallons). It's fair to assume Spinx saw the power of this supermarket-based gas discount program and decided to set up its own separate program to attract potential customers who do not shop at BI-LO.
To sum up, the Spinx Xtras program teaches great lessons for gas chains that seek to increase their customer loyalty. Put gas discounts at the center of your pricing and promotional strategy while keeping your offer simple, consistent, and easy to remember. When customers understand and internalize what you offer, advertising becomes unnecessary. Following this approach will have you, like Spinx, driving in a different direction from competitors.
Fiona Woolf, a graduate of the University of Virginia, specializes in market research.