Fuel retail is one of New Zealand’s toughest marketplaces: low margins, minimal customer loyalty, heavily price-driven and very little product-differentiated.
What BP did have was a sound loyalty programme in place with AA Smartfuel. Constant price cutting to retain customers is expensive, so the challenge was how to make BP’s AA Smartfuel offering work smarter and more cost-effectively.
To date, there are 200 BP service stations around the country. Fuel is the primary product and secondary is its convenience store offering, with some stores also providing bakery products and coffees through in-store Wild Bean cafés. Additionally, various locations also offer car wash facilities and LPG bottle refills.
The BP marketing team devised a marketing solution that restructured the fuel discount to include additional cents per litre for non-fuel purchases and other preferable behaviours.
A major issue, though, was that AA Smartfuel, being a coalition-based programme, wasn’t able to release customer data. The solution was an online opt-in promotion which ran for one month consisting of a gamified website/mobile site. If pulling the lever on a virtual one-armed bandit brought up three matching symbols, 4 cents per litre discount was loaded to the customer’s AA Smartfuel card in real time. On top of the base rate, this meant an immediate 8 cents discount, minimum, on their next fuel purchase. Customers were driven to the site through various media channels.
Having sorted the database issue, the next step was to communicate BP’s newly-structured fuel discount with offers matched against customer behavioural profiles uncovered in the earlier market segment research. A suite of eDM/DM comms, each with a specific fuel discount offer, followed.
The overarching SMP for the campaign was ‘Friends with benefits’ since, from the moment customers signed up to the BP database, the benefits started rolling in. The outcome was ground-breaking in the fuel retail sector: holding market share while reducing costs; increasing total fuel spend; increasing shop spend; and redefining BP’s customer segmentation. They have moved beyond the industry standard cents-per-litre model to an engagement-based programme that encourages customers to bring their spend in-store – and, most importantly, could be custom-fitted to consumer behaviour.