Under the Hood of Shell's $100 Million Loyalty Program

CMO Spotlight: Dan Little, Shell Oil

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Dan Little, head of North American Marketing for Shell Oil.
Dan Little, head of North American Marketing for Shell Oil. Credit: Shell Oil.

Did you know that Shell Oil is the only major fuel brand that still operates in all 50 states? The company boasts 14,000 sites across the country, in fact. But the proprietary gas stations of big box retailers and grocery stores have become formidable competitors in the last 20 years, and now account for about half of the market, increasing the pressure on Shell to drive loyalty.

"Forty-two percent of all U.S. drivers frequent or come to Shell," says Dan Little, the company's head of marketing for North America. "But when it gets to loyalty, which is a measurement of frequency, we're pretty much middle of the pack versus the other majors." Little and his team hope to change this statistic with an innovative, many-pronged approach to building consumer loyalty.

The road to more rewards
The inspiration for Shell's first loyalty program, called Fuel Rewards, came from a 2009 partnership with Kroger supermarkets. When Shell began allowing Kroger customers to spend their rewards at Shell stations, it soon became clear that both parties were profiting from the partnership. "A fuel discount, we found, was very emotive for consumers," Little says. "The price of fuel can change behavior." The goal of the next program? To scale this lucrative model nationally.

This year, Little's team relaunched the program with a new name -- Instant Gold Status -- in response to a unified request from its customers for more rewards. In addition to accepting local partner points, Instant Gold Status gives members an automatic 5-cent per gallon discount with every purchase, countrywide. The only stipulation is that they visit a Shell station six times within 90 days. Any less than that and the member returns to Silver Status, which still affords a 3-cent per gallon discount.

Prior to the relaunch, Little says that only 10-15% of its customers were true brand loyalists -- "road warriors" who drive a shocking 70-80% of Shell's profit margin. "We have an ambition to move that to three times that," he says. "We want to take some of the consumers who are already coming to us once or twice a month and move them into being more loyal customers."

Putting pedal to the mettle

The challenge for Little's team became not only communicating this shift to its existing customers, but building awareness among a national audience. The budget: a cool $100 million, which Little explains is the typical budget for a new fuel product launch. In other words, this program is a big deal.

First on the messaging menu: national TV, which was a first for Shell. Another first? Featuring Shell's gas station staff as heroes in the TV spots. "We're setting the expectations … for the customer about, 'OK, where can I get converted, and what does it feel like to get Gold Status?'… and creating an aspiration around how site staff interact with customers," Little says. "We and our distributors, wholesalers and retailers are really excited about the creative."

Aside from TV and on-site spending, Little says digital plays a larger-than-ever role in this push. "Usually it's 20 or 25 percent for our national launch campaign. For us, it's almost 40 percent now," he says. This entails media buying with partner Mediacom to drive mass awareness, via channels like ESPN audio and cable network entertainment. Little says the campaign has also had a successful run with Pandora and other digital radio partners.

On the social media front, Little says his team is taking full advantage of the advent of Facebook Live. For example, they went live from the pit of the Indianapolis 500 with driver Helio Castroneves, who eventually came in a close second place, and earned nearly a million views on the content. Castroneves's car, of course, was painted gold and emblazoned with "fuelrewards.com."

For those who can't stand physical cards, there's Shell's fuel rewards app, with balance tracking, geotargeted promotions and station price comparisons. Mobile payment is next on Little's to-do's list. His team is also stepping up its relationship with traffic app Waze, and has linked the Instant Gold Status program to GasBuddy, an app that lets users see competing gas prices.

"If you want to talk about things that are unconventional, that typically is not where we have gone in order to talk to our target consumer," Little says. "But what we've found is we've had some really good conversion rates. Those are people that will listen to an offer and a program."

Despite the myriad avenues for messaging, the overarching strategy for Little's team is, in fact, simplicity. Five years of complicated messaging with the previous rewards program, plus five months of market testing and cashier role-playing, told them that driving just on one benefit would work best for Instant Gold Status.

"What really clicked for us was focusing on the five cent every day offer," Little says. "Instead of trying to tell everybody about every benefit and it all becoming noise, we can get them to be stickier consumers because we're showing them the right benefits."

In other words: less talk, more loyalty.

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