Eyes on 'Return & Earn'

Published in CSP Daily News

A peek at how ExxonMobil's new loyalty program is faring

By  Carole Donoghue, Petroleum Editor

HOUSTON -- Exxon Mobil Corp. is close to announcing a new cross-promotion partner for its recently unveiled loyalty program, "return and earn," according to marketers attending a recent brand meeting with the refiner in Texas. Jobbers said company executives declined to name the company that Exxon was negotiating with, and would say only that an announcement would come "soon."

An ExxonMobil spokesperson said the company is "exploring cross-promotional loyalty opportunities on an ongoing basis, but has no announcements at this time."

The "return and earn" offer allows consumers to earn cents-per-gallon discounts at the pump when they shop at a station's convenience store. It rolls back the price of gasoline at the pump, providing "immediate savings," according to Exxon. Third-party loyalty provider Centego runs the program for ExxonMobil.

Some marketers at the jobber meeting said they were surprised at "the low number" of branded stations that have introduced the offer so far, however.

Exxon unveiled "return and earn" in 2011, but just 190 stations have gone live with the program, jobbers said they were told.

"I was shocked, I thought it would be a lot more than that," one marketer told CSP Daily News.

ExxonMobil declined to say how many stations have actually implemented the program, but said the number of jobbers who initially signed up for it represents about 20% of its branded distributors who between them run approximately 3,000 locations.

"We have hundreds more sites planned to go live this year," a company spokesperson said.

ExxonMobil declines to say how many jobbers it has in total--that information is "proprietary"--or discuss other aspects of the program; however, the company was far more forthcoming on how the program is performing in a bulletin sent to jobbers before the end of April to promote the plan.

At that stage, a total of 71 branded wholesalers had signed onto the program, according to a copy of the bulletin obtained by CSP Daily News. There were 203,000 "return and earn" cards in the marketplace, with an average of 1,171 cards per station. The bulletin gives the total number of transactions at 338,212, with average of 263 per site. The total number of sites involved was given as 173.

The program requires both a financial and marketing commitment by retailers. There is a one-time startup fee of $700, plus a monthly per station fee of $90. In addition, marketers must pay 18 cents per loyalty redemption. The refiner puts the average cents-per-gallon costs at 1.38 cents, which assumes each fuel purchase was for 13 gallons, regardless of the actual number of gallons purchased.

One marketer who recently implemented "return and earn" is Charlotte, Va.-based Tiger Fuel, which runs quarterly competitions to keep employees at its five participating stations engaged in the effort, according to the bulletin.

Tiger Fuel offers a $500 bonus to the sites with the most loyalty transactions as a percentage of sales. Since November 2011, it has issued 12,500 "return and earn" loyalty cards, notching up an average 1,700 cards per site. According to ExxonMobil, that number is 50% more than the national "return and earn" average.

Promotion has "played a key role" in Tiger Fuel's development of the loyalty initiative, ExxonMobil said. Tiger Fuel ran 20 radio spots per week during morning and evening drive times. And, on the opening day, managers and employees handed out cards preloaded with five-cents-per-gallon discounts. Then, on a continuing basis, Tiger offers a five-cent discount if the customer spends $25 inside the c-store.

Marketers who have implemented "return and earn" have tried various promotion techniques, according to the ExxonMobil bulletin.

One marketer saw a 65% unit increase in sales of a $4.59 Doritos bag tied to a three-cents-per-gallon offer, with the vendor paying 100% of the redemptions. A three-cents-per-gallon offer on a one-liter Mountain Dew increased unit sales by 30% in one month in another promotion.

Marketers have also hired local people to distribute single-sheet flyers to homes and in shopping areas around the store; "$10 an hour and gas money was a lot cheaper than a mailer," one marketer was quoted as saying.

Another placed a "specials basket" at the front counter that cashiers could point to and tell consumers that it was stuff they could buy to save money on gasoline.