As one of the US’s largest fuel brands, it is exciting to see RaceTrac joining other respected market leaders such as Panera Bread, Coca Cola and Cumberland Farms as another leading retail brand leveraging the power of subscriptions to drive customer loyalty. And perhaps even more exciting that RaceTrac is the first retailer we’ve seen so far to offer a model exclusively focused on a monthly cash payment that directly saves money off your fuel.
We were already fans of the generosity and share-ability of the RaceTrac’s Rewards program in our previous article on their convenience loyalty proposition so it’s fantastic to see the progress they’ve made since then.
RaceTrac Reward’s VIP is the innovative addition of a subscription-based layer to its already popular loyalty program – RaceTrac Rewards, and as the 12th largest retailer in this category in the US with over 550 stores, this announcement signals a significant shift from pure points-based programs to more innovative propositions, mechanics and models.
Led by a clear benefit to “Start Saving on Fuel Today”, the VIP tier costs just $2.49 a month and is automatically billed on a recurring basis each month. In return, VIP members save 10¢ per gallon on their first 40 gallons each month, then 3¢ on every subsequent gallon. We decided to check the maths to understand both the business and consumer benefits of this subscription approach, designed to drive increased customer loyalty.
A Clever Strategy
Before the pandemic affected fuel consumption so dramatically, Americans were buying an average of 656 gallons of fuel each per year, or 55 gallons each month. While this has clearly declined in recent months, for this article, we will assume that some (if not all) of the population will slowly return to similar levels of consumption. With the estimated savings per gallon mentioned above, using today’s average price of $1.98 per gallon in RaceTrac’s home State of Georgia, an “average” driver would save a total of $4.45 on fuel in total, and a net saving after the subscription fee of $1.96 each month. So what’s all the fuss about?
Share of Wallet
With so much uncertainty globally, this approach is incredibly clever, and is perfectly timed for long term loyalty as the “sunk cost” of subscribing becomes a compelling reason for consumers to consistently refuel in one gas station every time. All over the world, consumers see fuel as a grudge purchase, so any possibility of savings is a huge benefit and offers a clear value proposition that customers instantly appreciate. With this VIP strategy, RaceTrac’s VIP program is perfectly positioned to expect 100% share of wallet from top customers, with these savings even more important to motorists who drive more.
By simply entering their phone number before paying, RaceTrac Rewards VIP members “see the fuel prices on the pump roll back before their eyes” – a powerful visual experience that will reinforce the member’s decision to subscribe at every fill.
And of course, more drivers means more footfall, with the business case for this program undoubtedly including assumptions around an increased share of consumer spend on convenience categories such as frozen drinks and snacks.
To become a RaceTrac Rewards VIP, member customers either log in and upgrade their rewards membership or sign up on the company website or on the mobile app.
RaceTrac Rewards – Simply Subscribe to Save
In closing, having already launched its online ordering platform in April to address the immediate health concerns of shopping in store, and now with the launch of the VIP Rewards tier, RaceTrac is emerging as a decisive and innovative brand that’s launching superb digital and loyalty marketing features that are focused firmly on the future.
Liquid Barcodes is a leading global loyalty and digital marketing technology company specialising in 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 Priority, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer Group (UAE), as well as Avios – the global points currency for some of the world’s top airlines. I am also a former judge for the Loyalty Magazine Awards and host of the “Let’s Talk Loyalty” podcast.