This article was first published on Global Convenience Store Focus.
In the UK fuel retail industry, customers expectations are high. Fuel is often seen as a grudge purchase and recent research found that 84% of UK consumers believe that petrol and diesel are too expensive. And while there is no denying that a significant proportion of a typical household budget is spent on fuel, the fact that’s often missed is that the vast majority of the money being spent at the pump in fact goes to the government exchequer rather than the retailer. A whopping 72% of the retail price is made up of fuel duty and vat, with just 28% left to cover the costs of entire costs of sourcing, shipping and distributing fuel to our local forecourts, as well as other costs of running the business such as the investment required to drive the business and consumer behaviour through targeted customer programmes.
So when a UK fuel retailer likes BP with almost 15% market share launches a loyalty programme, consumer expectations are high, but are often overly optimistic given the lack of consumer understanding of the razor thin margins that retailers have available to work with. It’s a difficult challenge for fuel retailers, but one that BP has recently responded to in the UK with a new programme called “BPme Rewards“. This is the first company-owned loyalty programme for BP in the UK, having previously been the exclusive fuel partner within the Nectar coalition programme, which now run its coalition programme in partnership with Esso.
The loyalty card launched in June 2019 by BP UK.
What began in January 2018 as an app that allowed customers to pay for their fuel in their car (an app called “BPme“) has recently been expanded to incorporate a comprehensive loyalty programme, with points earned and burned across the business and a select number of partners, such as Marks & Spencers who operate 280 “Simply Food” stores on the BP forecourts.
The BPme app itself was launched to make life easy for customers and eliminate the need for them to go in to the store after filling their tank, and instead simply pay by phone from their car as this video explains.
Pay For Your Fuel – Without Needing to Queue in Store
We took this opportunity to understand the BPme Rewards value proposition for UK consumers, and assess how they’ve designed their programme to remain relevant to customers, yet still operate it profitably across its own 300 forecourts and also ensure the support of its 950 franchise partners throughout the country.
BPme is the app used by BP in the UK for both payments and rewards.
Here are the details of the new loyalty programme:
- You must be at least 16 years old and live in the UK to participate in BPme Rewards.
- Members get 1 point for every litre of fuel they buy, and one point for every pound spent on eligible products in BP stores.
- Car wash spend is also rewarded at one point per pound spent.
- Double points are earned for customers filling up with the company’s premium fuel product: “Ultimate with Active Technology”.
- Customers can choose to use a digital card within the app as shown below, or pick up a plastic loyalty card in store.
- Reward points can be spent on fuel, in store purchases, gift cards for either Amazon or Marks & Spencer.
- A full gift catalogue is also on offer for customers to choose rewards from and these rewards are available only by home delivery.
- Reward options start at 200 points which is worth £1, giving a reward rate of 0.5%.
- BP has said it “will endeavour” to add customers BPme Rewards Points to accounts within 28 days.
- The initial data capture and registrations is incentivised with 250 BPme Rewards points.
The tone of the card is informal and all about “easy”.
Having assessed the reaction to the programme since it launched, it’s clear there has been some criticism about the 0.5% reward rate, however commentators did acknowledge that this does match the level used throughout the Nectar partnership and it is typical of reward rates in fuel-only programmes.
Within coalitions however, customers opportunity to earn is considerably faster as they earn points across all categories of everyday spend, not just fuel, hence BPme has already alluded to plans to offer bonus points and promotions on a regular basis throughout the year to incentivise desired customer behaviours.
From our perspective, the programme is clear and simple and the approach is a great start to building direct relationships with its customers who increasingly value the personalised offers that this approach will bring.
As The Economist explained in 2017, data is in fact “the oil of the digital era” and it seems one of the world’s biggest oil companies agrees.
Liquid Barcodes is a leading global loyalty and digital marketing technology company specialized for the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.
How we do it:
We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.
Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.
One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.
Check out some of our exciting/proven results here:
Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant
With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer, as well as Avios – the global points currency for some of the world’s top airlines. I am also a judge for the Loyalty Magazine Awards.