Another Shot at Loyalty
Published in CSP Daily News
BP asks marketers to take a fresh look at its Pump Rewards program
CHICAGO -- BP is launching a new initiative to get more of its branded marketers to sign up for its pump rewards program, currently scheduled to make its public launch in March 2012, CSP Daily News has learned.
The oil major is offering a "Do-It-Yourself" roll-back toolkit as a "second chance" for retailers who are new to the brand or who previously opted out of the company's program. Support for DIY-ers consists of webinars run by BP, the software that a marketer's technician will have to install and technical support offered by phone.
Under the program, customers will receive rebates at the pump tied to the amount they charge to their BP Visa card or on the company's proprietary BP Card with Pump Rewards. Visa cardholders will earn 15cents per gallon for every $100 spent at a BP outlet, and 5 cents per gallon for every $100 they spend elsewhere. BP proprietary card customers will earn 5 cents per gallon for every $100 spent at BP. Rewards are capped at a maximum 20 gallons per purchase and are good for a year.
BP's rollback offer is now two years behind schedule. The company began touting what it calls its "earn and burn" rewards structure with marketers in 2009. BP initially planned to deploy the offer in 2010 but was forced to back off that date when it met resistance from potential rewards partners after the disastrous Gulf of Mexico oil spill in April 2010, according to sources. A second August 2011 rollout date had to be postponed when BP encountered technical problems and installation issues, sources said. The total cost of the program is not known, but company executives said in late 2010 that software development and deployment alone had so far cost more than $20 million.
BP's strategy is to get its retail network equipped with the necessary technology before launching the rewards offer, rather than doing it piecemeal, sources said. However, progress has been slow. As of this past September, BP had installed rewards software at 3,000 or so of its total 11,500 stations marketwide. It has told marketers that it hopes to have up to another 4,900 stations completed by March 2012. Consumers who can't redeem rewards at their local outlets receive a $15 statement credit for every $1 in cents-per-gallon rebates they earn, BP sources said.
BP has been running a pilot test of the rewards offer in Fort Wayne, Ind., since late spring, involving 4,000 card customers and 20 BP sites. It says that consumer spending at those sites has gone up since the offer was launched but has not said how much of an increase it has seen.
BP has also run a marketing test at six locations in Chicago. Personnel handed out cents-off rewards cards or coupons coded with 10-digit numbers that were entered at the pump. Consumers had to redeem the rewards, good for 10 cents per gallon off, at the pump or in-store that day. The company said more than 700 cards and codes were redeemed. BP said it asked the customers about their experience after they had fueled. It said consumers gave the cents-off offer an average score of 4.8 out of 5. The redemption process received an identical score, the company said.
Meanwhile, BP has joined other major oil companies in announcing that it will lower its processing fees for its credit and debit cards as a result of the enactment of the Durbin Amendment that gave the Federal Reserve the authority to cap debit (PIN and signature) interchange fees. BP said its card fee changes, effective November 1, will reduce the average overall effective rate for processing cards at BP sites by approximately 0.14%. Chevron, Shell and ConocoPhillips have also made reductions in their rates but BP will "still have the lowest fees in our industry peer group," said spokesperson Scott Dean. He declined to comment on the progress being made on BP's loyalty card rollout.