Loyalty in the Oil and Gas Industry: Driving Engagement and Growth

The oil and gas industry is undergoing transformative changes, making customer loyalty a top priority. As consumer behaviors shift, fuel retailers must adapt by leveraging oil and gas loyalty programs to retain customers and drive engagement. Recent research reveals that about 36% of companies in this sector are investing in analytics and big data to create effective fuel loyalty programs that align with evolving customer needs.

Fuel retailers face unique challenges, including highly regulated prices, slim margins, and growing environmental concerns. Despite these obstacles, gas rewards programs offer an opportunity to boost non-fuel sales, provide personalized experiences, and create lasting emotional connections with customers. By offering the best fuel rewards programs, companies can capture new revenue streams while meeting the demands of today’s discerning consumers.

This blog explores how fuel loyalty schemes can help oil and gas companies increase revenue, enhance customer engagement, and foster loyalty. Through actionable strategies and real-world case studies, discover how to build the best gas rewards program that stands out in this competitive industry.

Benefits of loyalty programs in the oil and gas industry 

Implementing effective loyalty programs can significantly benefit oil and gas companies, helping them drive customer engagement, increase revenue, and gain valuable insights. Here are some critical advantages of loyalty programs in the fuel retail industry: 

1. Increased customer engagement and loyalty 

Gas rewards programs are a powerful tool for driving customer engagement and retention. According to a study by KPMG, participation rates in mature markets for fuel loyalty programs range from 25% to 40%, with some chains seeing loyalty program transactions account for up to 70% of total fuel sales. By offering rewards and personalized experiences, loyalty programs encourage customers to return to the same fuel brand, fostering long-term loyalty.

2. Improved customer insights and targeted marketing 

Loyalty programs provide valuable data on customer behavior, preferences, and purchase patterns. By analyzing this data, oil and gas companies can gain deep insights into their customer base and create targeted marketing campaigns. The main goal of data analysis is to determine everything that can affect sales, margin, profit, and customer loyalty in the future. 

3. Increased non-fuel sales and revenue 

While fuel sales are the primary revenue driver for oil and gas companies, loyalty programs can also help boost non-fuel sales. According to the Association For Convenience & Fuel Retailing, fuel retailers typically see profitability decrease as prices rise and increase when prices fall due to the volatility in the wholesale price of gasoline. 

By offering rewards for in-store purchases and creating a positive customer experience, loyalty programs can drive additional revenue from non-fuel sales and yield much higher profit margins than fuel sales alone. 

4. Competitive Advantage and Brand Differentiation 

In an industry where fuel is largely undifferentiated, gas rewards programs provide a way for companies to stand out. Unique rewards, such as points redeemable for car services or partner discounts, create a distinctive value proposition. 

As Sushant Rabra, partner at a leading consulting firm, notes, "For the fuel retailers, consumer experience is an upcoming competitive milestone. Fuel is an undifferentiated product, so retailers need to develop a strategy and opt for digitalization techniques to stand out in the crowd by catering to upgraded forecourt experiences and benefits for customers." By offering unique rewards and experiences, loyalty programs can give oil and gas companies a competitive edge and attract customers away from competitors. 

Importance of employee loyalty in oil and gas business

The oil and gas industry faces unique challenges that make loyalty programs essential for driving customer engagement and revenue growth. Here are some key reasons why loyalty programs are crucial for fuel retailers: 

1. Intense competition and price sensitivity 

The fuel retail industry is highly competitive, with customers being extremely price-sensitive, especially in the current economic climate. The fuel retail industry faces significant challenges.  

Despite steady demand for petrol, the cost-of-living crisis and global conflicts have made drivers highly sensitive to prices. Loyalty programs can help fuel retailers differentiate themselves from competitors by offering personalized rewards and experiences beyond discounted fuel prices. 

2. Changing customer expectations and behaviors 

As fuel retailers evolve into complex retail outlets, customer expectations are changing. Customers now look for a wide range of services beyond fuel and convenience, such as electric car charging stations, parcel pick-up areas, and more.  

Loyalty programs can help retailers adapt to these changing expectations by offering rewards for a broader range of purchases and services. An increasing number of gas stations are shifting towards convenience and alternative retail offerings. Petrol brands require tools to transition customers from fuel purchases to retail shopping, fostering new and robust shopping habits.

3. Importance of non-fuel sales and revenue 

While fuel sales are the primary revenue driver for oil and gas companies, non-fuel sales are becoming increasingly important. B2C customers buy less fuel per visit, but frequent gas stations more often and make more non-fuel purchases than B2B drivers. Loyalty programs can help drive additional revenue from non-fuel sales by offering rewards for in-store purchases and creating a positive customer experience. 

4. Need for customer insights and targeted marketing 

Loyalty programs provide valuable data on customer behavior, preferences, and purchase patterns. By analyzing this data, oil and gas companies can gain deep insights into their customer base and create targeted marketing campaigns. Data analysis aims to identify factors affecting sales, margins, profits, and loyalty so the firms can send the right offer through the best channel at the optimal time to influence shopping habits. 

Loyalty programs are essential for oil and gas companies to navigate the intense competition, changing customer expectations, and the need for non-fuel revenue and customer insights in the fuel retail industry. 

What offers and rewards are valued most in fuel loyalty programs? 

Fuel retailers must carefully consider the rewards and offers that will resonate most with their customers to drive engagement and loyalty. Several key factors influence the perceived value of loyalty program rewards in the fuel industry: 

1. Convenience and accessibility 

One of the most critical factors for fuel customers is the convenience and accessibility of the loyalty program. Loyalty programs for gas stations should be free to join. The benefits should be significant enough to justify participation without an entry fee. The registration process should also be quick and easy, allowing new drivers to sign up at checkout effortlessly. Customers want a frictionless experience where they can easily earn and redeem rewards. 

2. Personalized offers and experiences

Fuel customers also value personalized offers and experiences tailored to their needs and preferences. Customize rewards and engagement based on desired behaviors across different customer segments, varying by location, age group, life events such as birthdays and anniversaries, and more.  By leveraging customer data and analytics, fuel retailers can provide highly relevant and valuable rewards. 

3. Instant gratification and flexibility

Fuel customers often seek instant gratification and flexibility in their loyalty program rewards. One essential consumer trait is a preference for rewards that provide immediate gratification. Customers want to earn and redeem rewards quickly without complex rules or restrictions. 

4. Partnerships and coalition rewards

Partnering with other brands and offering coalition rewards can also be highly valuable for fuel loyalty programs. Implementing or joining a coalition loyalty program presents a significant opportunity for fuel retailers.  

It offers cost-effectiveness, jumpstarts promotions, facilitates cross-industry collaboration, provides time-sensitive incentives, encourages frequent usage, and boosts engagement rates. By allowing customers to earn and redeem rewards across a wide range of brands and categories, fuel retailers can increase the perceived value of their loyalty program.  

Fuel customers value loyalty program rewards and offers that are convenient, personalized, provide instant gratification, and offer flexibility and partnership opportunities. By understanding these key preferences, fuel retailers can design effective loyalty programs that drive long-term customer engagement and retention. 

Case studies of loyalty in the oil and gas industry

1. Exxon Mobil Rewards+™ program 

ExxonMobil, one of the world's largest energy providers, sought to enhance customer engagement through an effective loyalty program. 

ExxonMobil wanted to create a loyalty program that would: 

• Increase customer engagement and retention 
• Provide consumers with savings and rewards on fuel and convenience store purchases 
• Integrate with a multi-partner loyalty coalition program involving significant retail, streaming, telecommunications, and finance brands. 

To address these challenges, ExxonMobil launched a multi-partner loyalty coalition program in 2015, which required complex technical integrations to ensure real-time data flows across all partner environments. They implemented loyalty management to power the program and extended its reach to over 12,000 Exxon and Mobil stations.  

The program has yielded significant results: 

• The Exxon Mobil Rewards+ loyalty program has reached the $100 million milestone in member savings in its first five years since launch. 
• The program has provided consumers with the best brand experience, allowing members to earn points on their purchases and redeem them for savings. 

2. THE FUEL REWARDS® PROGRAM 

Shell is a global energy company that offers a wide range of products and services, including fuel, lubricants, and energy solutions. High fuel prices can be a significant financial burden for consumers, especially those who rely on their vehicles for daily transportation. The Shell Fuel Rewards Program seeks to alleviate this problem by offering savings and rewards to its members. 

Solutions: 

The Shell Fuel Rewards Program offers several solutions to help customers save money on fuel: 

• Complimentary gold status: Joining the program automatically grants members Gold Status, which provides a 5 cents per gallon discount on every fill-up. 
• Platinum status: Members can achieve Platinum Status by filling up 12 times in 3 months (or 6 times with Shell V-Power NiTRO+ Premium Gasoline). This unlocks a 10 cents per gallon discount, double the savings on selected convenience store items, and exclusive experiential rewards. 
• Online shopping and dining rewards: Members can earn additional bonuses by shopping and dining with partner brands through the FuelRewards.com website. 
• Stacking rewards: Members can combine their Platinum or Gold Status discounts with partner rewards to maximize their savings at the pump. 

The Fuel Rewards® program at Shell, recognized by Bond Brand Loyalty's 2021 Loyalty Report™ as the top Loyalty Program in the Gas and Convenience category, connects brands with over 25 million consumers nationwide. 

3. BP Driver Rewards 

BP is one of the world's largest energy companies. It produces 18.4 million tonnes of oil annually and drives economic growth with 74,000 employees across more than 70 countries. The company is a significant player in the oil and gas industry, focusing on the exploration, production, refining, and marketing of petroleum products. BP's loyalty program, BP Driver Rewards, offers the following solutions: 

• Cents-per-gallon fuel savings: The program rewards consumers with 5 cents off per gallon of fuel for every 20 gallons purchased, with a minimum of 2 transactions. This provides an automatic discount on future fuel purchases. 
• Integrated with existing rewards: The BP Driver Rewards program integrates with other existing BP rewards programs, such as the BP Visa and BP Card, allowing consumers to stack discounts and maximize their savings. 

BP has achieved significant outcomes. With U.S. headquarters in La Palma, Calif. (West) and Warrenville, Ill. (East), BP now markets over 15 billion gallons of gasoline annually to U.S. consumers through more than 11,000 retail outlets and supplies over four billion gallons of fuel each year to fleets, industrial users, auto and truck manufacturers, railroads, and utilities. 

4. Emirates National Oil Company Group 

ENOC (Emirates National Oil Company) is a leading integrated global oil and gas player operating across the energy sector value chain. It was founded in 1993 and is headquartered in Dubai, United Arab Emirates. Before the UAE deregulated oil and gas prices, there were no loyalty programs in the GCC region, presenting a greenfield opportunity for ENOC to be a first mover. 

ENOC has launched its "Yes" Rewards program. The objective was to create a mobile-first loyalty program that could cater to the distinctive requirements of customers in the Middle East, encompassing ENOC's fuel, automotive, and retail offerings. 

• Within the first month of launch, the "Yes" Rewards program gained over 200,000 members. 
• Each loyalty campaign generated 2-3 times higher turnover for ENOC. 
• In 2023, the "Yes" Rewards program was nominated for two categories at the International Loyalty Awards: Best Customer Experience and Best Loyalty/Benefits in a Financial Product.

Fueling customer connections in the oil and gas industry with Loyalife

Loyalife empowers oil and gas companies to overcome industry-specific challenges and build customer loyalty through innovative and tailored solutions. Designed to cater to a highly price-sensitive and commoditized market, Loyalife offers businesses the tools to create value-driven loyalty programs that drive engagement and retention.

Offline and mobile integration

Loyalife enables seamless integration with both offline and mobile systems, ensuring a unified loyalty experience across all touchpoints. Customers can engage in-store or via a mobile app, with features like real-time point tracking, exclusive app-based rewards, and store-level promotions.

Gamification for enhanced engagement

Turn routine transactions into engaging experiences with gamification. Loyalife supports interactive elements like points, badges, and leaderboards to excite customers and deepen their connection with your brand.

Addressing price sensitivity

Loyalife’s flexible loyalty engine allows businesses to reward customers with discounts on fuel, points for in-store purchases, and other perks that go beyond cost savings delivering higher perceived value.

Sustainability integration

Align loyalty programs with eco-conscious customer expectations by incentivizing sustainable choices, such as rewards for using cleaner fuels or participating in recycling initiatives.

Loyalife provides oil and gas companies with the tools to create loyalty programs that engage customers, promote sustainability, and address price sensitivity, ensuring long-term growth and customer retention. Fuel your loyalty strategy with Loyalife today!

Conclusion

Loyalty programs are critical for oil and gas companies looking to drive customer engagement, increase revenue, and gain valuable insights into the highly competitive fuel retail industry. By offering personalized rewards, seamless experiences, and unique benefits beyond discounted fuel prices, loyalty programs can help fuel retailers differentiate themselves from competitors and foster long-term customer loyalty.  

As customer expectations and behaviors continue to evolve, oil and gas companies must adapt their loyalty strategies to cater to the changing needs of their customers. By leveraging data analytics, targeted marketing, and innovative partnerships, fuel retailers can create loyalty programs that deliver real value and drive sustainable growth in the years ahead.

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