The Story Behind Shell’s Efforts to Build Brand Loyalty

Topline Summary

Shell Retail is the only major fuel brand that operates in all 50 states. And yet, Head of North American Marketing Dan Little says the company is in the middle of the pack when it comes to brand loyalty. After launching several loyalty-building campaigns that haven’t taken root, the gasoline company is trying to change that.

Earlier this year, Dan and his team launched a rewards program called Instant Gold Status. In this effort to amplify brand love, Shell now offers customers the chance to save 5 cents per gallon at the pump through Instant Gold Status. Since only 10-15% of Shell customers are true brand loyalists, this campaign has the potential to tap into a well of opportunity.

Dan describes the cut-thru strategies his team is developing on the Renegade Thinkers Unite podcast. Click here to listen to the episode. We’ve also prepared some sample questions and answers from the interview in case you don’t have time to listen to the podcast:

Drew: There are a lot of fuel brands that are acceptable. How difficult is it to get people to regularly choose Shell?

Dan: So less than 20 percent of the population [is] truly loyal to a single brand, and the rest of the 80 percent have a consideration set. And, of course, the consideration set of brands are different for those different segments that we talked about. But if you are in one of those three that I talked about—if you’re not one of those 20 percent that are loyal to Shell all the time—you might be buying Shell when it’s convenient, and you might be buying another major brand that you think is as good a quality, or perceived that way, when that’s convenient.

Drew: How are you planning to address this issue?

Dan: The role of our loyalty program is to get them to make one more right turn instead of a left turn. Give them one more reason to be a bit stickier to the Shell brand. And we find over five years of having a true loyalty program in the marketplace, we find that absolutely works. Surprise! Loyalty works, and that we see new members coming in–whether they were existing customers or new to Shell customers–and increasing their frequency of purchase at Shell on a monthly basis significantly. Not only that, now getting back to our independent dealers, what we see is it drives not only fuel sales; it drives in-store convenience retail sales for our dealers at their sites which is a big part of the proposition for our dealer network as well.

Drew: So you launched the Instant Gold Status reward program. What were your going-in expectations?

Dan: Well because we don’t operate the retail sites ourselves, it presents at least two different challenges, and one is the economics of loyalty. So you have to get a certain uplift in order to pay for the benefits and the value you’re putting into the loyalty offer. And being a supplier, being the brand and the supplier–but not the operator of the site where a lot of the value and the margin is created–that can be a challenge. So number one, we had to go out and prove to ourselves the uplift that we need to create the value to have an ROI on a program like this exists. That was one thing that we were able to do. And then the second was to break through the awareness and understanding barriers that you have in loyalty programs to get conversion.

Drew: What is your goal with the program?

Dan: And what we are seeking to do is take the conversion rates that we had in the past and triple them. We want to triple the penetration that we have of our loyalty program. And to do that we said we’re going to have to do something we never have done before and that is reach out and involve our wholesalers’ and retailers’ site staff.

Drew: What are some of the key insights from having piloted this and now rolled it out nationally?

Dan: Well for us it was about building broad awareness. It was about converting at the site and getting our site staff involved in it. But stepping back from that, the loyalty program in general–because we’ve been on this this journey for five six years now–it really requires a top down commitment in strategy and philosophy from executive management down. And so without that you’re not going to stay on the journey that it takes to build the membership base to invest in the VI, the technical platform, to bring in the partners. It’s just not going to hold. And I think the second piece is, we’ve learned we’ve had to become even better at partnering, meaning using technology and loyalty partners and agencies, but also reaching out to other brands and finding where we can cross-promote and cross-sell and add value to their engagements with their consumers and bring their consumers into our fold and become Instant Gold members. So I’d say top down commitment and philosophy. It’s a culture here. And I think also skills in partnering. You can’t do this with an internal view.