Sunday, March 28, 2010

US Oil Companies Are Setting Up Partnerships For Loyalty Reward Programs

Loyalty reward programs aim to keep your customers into your clientele, and hence to maximise your sales/customers by making sure he won't go to the competition. If loyalty reward programs involve a reward system, it does not necessarly imply to give some of your actual products, or even some special offers in your store.

Hence, there are some very interesting loyalty reward programs that are set by several companies. This is what is happening in the US Oil market.

"In what one loyalty provider called ’a huge turn’ in how loyalty plays out in the convenience store channel, oil companies have launched or are in the process of initiating large-scale programs involving price rollbacks, grocery-store ties and their own branded credit cards," reports "San Antonio, Texas-based Valero is the latest to confirm that it is in the testing phases of a loyalty program that could potentially be rolled out to its entire network. While ’still under development,’ officials told CSP Daily News that their California pilot program ’worked well.’ Though too early in development to discuss details, the official said rewards kick in after a certain number of fillups or purchases, with one of the incentives being free movie rentals from DVD kiosks."

Also in the article: "Just last month, Houston-based Shell and Cincinnati-basedKroger Cos. announced a partnership involving grocery ties to fuel-reward redemption. Beginning February 15, Kroger and Shell said they would roll out the grocer rewards program in Cincinnati and Dayton, Ohio; Knoxville and Nashville, Tenn., and San Diego. Customers can earn rewards including a minimum of 10 cents off a gallon of gasoline for every 100 Fuel Points they earn by using their free loyalty cards when purchasing a variety of products inside Kroger and Ralphs stores. Last fall, Houston-based BP announced a loyalty agreement with Irving, Texas-based Excentus Corp. to work with the loyalty provider’s fuelperks! program. The companies announced that BP will become the fuelperks! redemption partner in the majority of marketing areas in which BP operates."

"These moves represent the most significant turn of events regarding loyalty in the channel since Speedway SuperAmerica LLC (SSA) established a formidable program within its 1,600 stores five years ago, according to Anton Bakker, president of Outsite Networks, Norfolk, Va. The sheer numbers involved back his assessment, with as many as 8,000 BP sites, many in major U.S. markets, being eligible for upgrade."

What is very interesting about this idea, is that you could get a good customer relationship management strategy by setting up some key partnership with some companies that your customers visit, and hence propose a wider range of services to your customers.