Fuel loyalty programs: challenges and examples from fuel retailers

The fuel retail industry is facing some big changes. It is no longer just about buying gas and the occasional candy bar. With the cost-of-living crisis, push for sustainability, and the rise of electric vehicles, fuel brands need to adapt their business models.

In a sector where drivers are mainly motivated by prices, customers are now also looking for unique value-added services that offer special benefits. The key question is: why should I buy my gas here instead of at another station?

In this blog post, you will learn about gas station loyalty programs, the challenges the fuel retail industry faces in customer retention, and how petrol loyalty schemes can incentivize customers in a price-sensitive environment.

What are fuel retail loyalty programs?

Gas station loyalty programs are designed to encourage customers to return to the same station by offering rewards for repeated visits. These programs provide perks that make each visit more enjoyable and valuable.

For example, whenever customers fill up their tanks, they earn points. Accumulating enough points allows them to redeem rewards like fuel discounts, free snacks, or car washes. Additionally, some programs offer exclusive deals on in-store items and special promotions for loyalty members.

COMARCH reports that loyalty transactions can make up 50-70% of all sales at gas stations. This shows just how effective loyalty programs are at bringing customers back and boosting their spending.

In a market where price is a major factor, gas station rewards programs provide additional reasons to choose a specific gas station. They turn routine visits into rewarding experiences, fostering customer loyalty and making the choice of where to fill up an easy one.

What are the challenges in petrol loyalty?

Keeping customers loyal in the petrol industry isn’t easy, and there are a few challenges to consider:

1. Price sensitivity

Price sensitivity is a critical factor in the fuel industry. Fuel prices can be highly volatile, and many customers are quick to switch stations for even slight savings. According to KPMG, oil majors change their prices around 650 times a year to stay competitive, while retail giants might change prices millions of times daily. Constant fluctuations make it challenging to retain customers. Therefore, petrol loyalty programs need to offer tangible benefits to keep customers despite sudden price changes.

2. Intense competition and need for personalization

With so many gas stations offering the same loyalty rewards, it's hard to stand out. To keep customers coming back, gas stations need to make each visit special with personalized experiences and unique perks.

Customers want more than just discounts – they’re looking for personalized and engaging experiences. If a fuel brand doesn't set itself apart in these areas, it risks becoming just another stop for cheap gas – which isn't a good way to keep customers in the long run. 

3. Technology and data integration

Many gas stations face challenges with old POS systems and the difficulty of merging data from both corporate and franchise-owned locations. This makes it tough to understand customer preferences and behavior, which is key for offering personalized loyalty experiences and rewards. To get the most out of their loyalty programs, oil and gas companies need to significantly improve their data collection and integration capabilities.

4. Changing expectations and environmental concerns

Fuel retailers are under increasing pressure to address their environmental impact as high-emission vehicles lose popularity. To stay relevant, they must adopt greener practices like electric vehicle charging stations and cleaner fuel alternatives. Changing customer demands are making traditional oil and gas models outdated. With electric vehicle sales rising, consumers seek more than just fuel; they want convenience and extra value. Despite a net margin of just 1.4% on fuel sales, gas stations make significant profits from in-store purchases. To keep up, fuel retailers need to offer diverse fueling options and focus on convenience.

What type of petrol loyalty programs should you run as a fuel retailer?

Here are several types of petrol loyalty programs you could consider:

1. Point-based programs

In a point-based loyalty program, customers earn points for every liter of fuel they purchase. These points can be redeemed for fuel discounts, free car washes, in-store merchandise, or rewards from partner businesses. 

Pros:

• Encourages repeated visits to consistently refuel and earn and redeem points.
• Points can be redeemed for various rewards, appealing to different customer preferences.
• Frequent interaction with the program as customers track and use their points.

Cons:

• Managing a points system can be complicated and may require sophisticated tracking systems.
• Customers may need to accumulate a significant number of points before redeeming, which could reduce immediate satisfaction.

2. Tiered rewards programs

A tiered rewards program allows customers to move up through different tiers based on their fuel spending. As they purchase more fuel and reach higher tiers, they unlock increased benefits such as larger fuel discounts, priority service lanes, or access to exclusive promotions.

Pros:

• Customers are incentivized to spend more to reach higher tiers and unlock better rewards, creating a sense of exclusivity and status.
• Encourages sustained loyalty as customers aim to maintain or advance their tier status.

Cons:

• New or lower-spending customers might feel the rewards are unattainable.
• Requires careful management to ensure rewards at each tier are appealing.

3. Membership programs

In a membership program, customers receive exclusive benefits like significant fuel discounts, free car washes, tire pressure checks, and access to premium fuel types at regular prices. 

Pros:

• Instant gratification and out-of-the-box benefits without the need for tiresome points collection.
• Can offer substantial benefits that justify the membership cost and enhance customer satisfaction.

Cons:

• If customers don’t perceive ongoing value, they may cancel their membership.
• Members will expect high value and consistent benefits, requiring continuous management.

4. Cashback program

With a cashback program, customers receive a percentage of their fuel purchases back as cashback. This cashback can be used for future fuel purchases, making it feel like they are getting a rebate every time they refuel. 

Pros:

• Customers receive an instant financial reward, increasing satisfaction.
• Easy to understand and appealing to customers.
• Encourages more frequent visits to accumulate cashback.

Cons:

• Providing cashback can be expensive for the fuel retailer.
• Competitors can easily replicate cashback offers, reducing differentiation.

5. Partner (coalition) programs

Partner programs involve collaboration with other businesses to offer joint rewards. Customers can earn points or discounts on fuel purchases that can be redeemed at partner businesses, such as automotive service centers or convenience stores. 

Pros:

• Customers receive benefits beyond fuel, enhancing the program’s attractiveness.
• Collaborations with other businesses can strengthen relationships and cross-promotional opportunities.
• Appeals to a broader customer base with diverse rewards.

Cons:

• Managing partnerships and ensuring seamless integration can be challenging.
• Reliance on partner rewards might dilute the focus on the fuel brand itself.
• Success is partly dependent on the quality and appeal of partner offerings.

Combining different types of loyalty programs can create a more robust and appealing offer for your customers. Each type of loyalty program offers unique advantages and challenges, and the best choice will depend on your specific business goals, customer base, and operational capabilities.

For example, you might integrate a points-based system with tiered rewards. This approach provides immediate benefits while encouraging long-term engagement. Alternatively, you could enhance a membership program with gamification elements to keep the experience fresh and exciting.

Learn more: Explore Voucherify's Open Source Loyalty Accelerator

How to design your own successful petrol rewards scheme?

Here are some key strategies and insights on how fuel and oil companies can implement a consumer-centric, future-proof loyalty program:

1. Review your competitors

Check out what other petrol stations are doing with their loyalty programs. Dive into their perks and see what’s popular and what falls flat. This will give you a clear idea of what customers love and help you craft a unique and appealing program.

2. Segment the diverse customer base of your gas station

To create a successful loyalty program, you need to understand your customers' habits and preferences. Start by customizing rewards for different customer segments based on factors like location, purchase history and frequency. For example, segment customers based on purchasing patterns:

• Those who buy fuel and also shop at the store
• Those who stop for food or drinks
• Those who primarily focus on fueling

Additionally, understanding the differences between B2B and B2C customers is key to catering to their unique needs. B2B customers usually focus on bulk purchases and are more price-sensitive. On the other hand, B2C customers value personalized experiences and rewards.

For instance, B2B clients often use fuel cards. These cards work like regular payment cards but come with specific features tailored for business needs. They are typically restricted to certain petrol station networks. By managing where drivers buy fuel, how frequently they refuel, and how much they fill up, fleet managers can effectively control and reduce fuel costs.

Learn more: All You Need to Know About Personalized Customer Loyalty Programs

3. Make your gas rewards program easy to use and accessible

Keep your loyalty program simple and convenient to fit seamlessly into their routines. Digital offerings and contactless payment systems can enhance convenience and speed up service. To make your loyalty program appealing to various customer types, consider an omnichannel approach. This unifies customer data across multiple channels, providing a comprehensive view of each customer. Whether your customers prefer plastic cards or mobile apps, they will appreciate being able to scan their points using their preferred method.

By leveraging a mobile loyalty application, you can further enhance the convenience and appeal of your program. Customers can pay through the app using contactless payment systems, locate nearby gas stations, and track their progress and rewards with ease. The app also allows them to receive personalized offers and notifications, ensuring they never miss out on a deal.

Integrating with other services like navigation apps or social media platforms can also enhance the overall customer experience.

4. Deploy location-based push notifications to incentivize customers on the go

Fuel retail brands can use geolocation features to trigger personalized offers, making customers aware of nearby fuel stations and stores. For example, a customer driving near one of your stations could receive a notification offering a discount on fuel or a free coffee with a purchase. 

This proactive approach helps beat competitors in a specific area and can shift customer behavior in your favor. However, it's crucial to avoid intrusive communication, as this can quickly drive customers away.

Learn more: 6 Examples of Personalized Geolocation Promotions

5. Focus your gas rewards programs on convenience products too

Oil and gas companies need new models. Just ten years ago, gas stations were all about fuel, but by 2030, traditional fuel will only make up about 20% of their revenue (Fuel Forecourt Retail Market, KPMG International, 2020).

Focusing on convenience is essential. Gas stations should offer a variety of experiences, goods, and services, whether customers are fueling up or not. This expands the traditional convenience store model, commonly seen in places like the UK and the US, to include options such as luxury cafés or pharmacies. Additionally, providing related services like car maintenance and insurance can help attract more customers.

Buc-ee's is a beloved American chain of large country stores and gas stations that offers much more than just fuel. Travelers can find a wide variety of snacks, freshly made food, and unique merchandise. Buc-ee's is well-known for its clean and spacious restrooms, making it a convenient stop for anyone on the road. Additional amenities include car washes and ample parking.

6. Collect and utilize data insights from your petrol loyalty schemes

Use the data from your petrol loyalty program to better understand your customers' preferences and habits. This information can help you tailor your offers to meet their specific needs and interests. 

For example, if data shows that many customers buy coffee and snacks during morning fuel stops, you could offer discounts on breakfast items. By personalizing your offers, you can keep customers coming back and make your loyalty program more effective.

Learn more: Unlocking Zero-and First-party Insights Through Loyalty Programs

What rewards can you offer within petrol loyalty schemes?

Variety is key when it comes to incentives. Go beyond basic discount coupons and include BOGO deals, birthday rewards, double loyalty points, "pay with points" options, and product upsizes. Think retail and offer rewards that excite and engage your customers.

Here are some popular rewards that you can also offer within fuel loyalty schemes:

• Free fuel: Let your customers earn points to get a free tank of gas. It’s a straightforward way to make them feel rewarded.
• Coffee and snacks: Road trips can be tiring, so offer free or discounted coffee, sandwiches, and snacks. Perfect for a quick pick-me-up, whether they’re traveling long distances or just around town.
• Car washes: Give out free or discounted car wash services. Everyone loves a clean car!
• Travel accessories: Hand out handy items like phone chargers, travel pillows, and maps. These little extras can make any journey smoother.
• Discounts on services: Provide deals on car maintenance, insurance, or other services. Help your customers take care of their cars without breaking the bank.
• Premium fuel for VIP members: Treat your top-tier loyalty members to exclusive access to premium fuel. They’ll appreciate the high-quality perks.
• Charging stations for electric cars: Set up charging stations for electric vehicles, making your station a convenient stop for all your eco-conscious customers.

American convenience store chain and fuel station Circle K offers its Circle K app members access to EV charging stations.

Promotion scenarios in fuel loyalty programs

If you are wondering what your petrol promotions can look like, let's go through a couple of popular scenarios:

• Pump & convenience: A customer scans their loyalty card at checkout to pay for gas. After completing the purchase, they check the "deals" tab on the POS and find a coupon for a free bubble gum pack. They enter the voucher code, making the gum free of charge.

• BOGO: At the POS, a customer sees a promotion for "buy one, get one free" Redbulls for loyalty members. They scan their loyalty card, add two Redbulls to their cart, and the promotion is automatically applied.

• Instant loyalty rewards: A customer earns 2 points for every dollar spent at your station. After purchasing convenience products, they reach a new tier in the program and are granted a choice of instant rewards. They select a chocolate bar, and a voucher code is generated for them.

• Double loyalty points: During special periods or for specific tier rewards, you can offer double loyalty points for particular product purchases, such as candies, coffee, sandwiches, or even for filling up the tank.

• Bonus points for special orders: A customer scans their loyalty card and sees a promotion for double loyalty points on orders above $50. They add products to their cart to meet the minimum value and receive additional points.

• Location-specific promotions: A customer logs into the POS and tries to use a car wash discount at a different location, but the promotion code doesn’t work as it is location-specific. When they return to their designated station, they can apply the discount and subtract the amount from their final bill for the car wash.

• Multi-step promotions: A registered customer completes orders at three different locations. Upon checking the 'deals' tab, they see a promotion available after fueling up at three different stations. After completing these purchases, they receive a voucher for a free six-pack of Coca-Cola, redeemable at any location.

• Partner promotions: A customer logs into the POS and connects their account to a partner program. Their purchase and loyalty points are transferred to the partner’s website or mobile app, allowing for a seamless experience. Points can be collected and redeemed at both the gas station and partner locations.

You can mix and match these promotions to keep your customers engaged and coming back for more. With a variety of rewards and bonus opportunities, there is always something exciting to look forward to on the road. 

Examples of gas station loyalty programs

1. Chevron Texaco Rewards

Chevron Corporation is a leading American energy company with operations in over 180 countries, known for its extensive Chevron and Texaco service stations. Their rewards program, Chevron Texaco Rewards, is designed to provide customers with benefits and incentives for purchasing fuel and other products at Chevron and Texaco locations.

How does the Chevron Texaco Rewards program work, and what are its benefits?

• Customers earn points for every gallon of fuel purchased at participating Chevron and Texaco stations and for eligible in-store purchases. 
• The points can be redeemed for fuel discounts at participating stations, in-store purchases, and other rewards like gift cards or merchandise.

Highlights:

• Customers earn points for every gallon of fuel and eligible in-store purchases, making it straightforward to accumulate rewards.
• The Chevron Texaco Rewards app enhances the customer experience by offering easy tracking of loyalty points and transaction history.

2. Shell Fuel Rewards

Shell is a global energy company with operations in over 70 countries, renowned for its extensive network of Shell service stations. In the US, Shell offers a rewards program called Fuel Rewards. This program features three tiers: Gold, Silver, and Platinum, each providing different benefits to its members.

How does the Fuel Rewards program work, and what are its benefits?

• New members receive Complimentary Gold Status with 5¢/gal savings during the Introductory Period. After this, members must fill at least 10 gallons six times during the qualification period to maintain Gold Status. Otherwise, they move to Silver Status with 3¢/gal savings.
• To achieve Platinum Status with 10¢/gal savings, members must fill up 12 times or 6 times with Shell V-Power® NiTRO+ Premium Gasoline (10 gallons each) in 3 months. Platinum members save 10¢/gal on any fuel.
• Gold Status members save 5¢/gal and need 6 fill-ups of 10 gallons in 3 months to qualify. Shell V-Power NiTRO+ fills count double.
• Members who don't qualify for Platinum or Gold Status will get Silver Status with 3¢/gal savings on every fill.

Highlights:

• Shell offers new members a Complimentary Gold Status right from the start. This immediate reward is an excellent way to increase sign-ups and give customers a taste of the benefits awaiting them, encouraging ongoing engagement with the program.
• The tiered system motivates customers to refuel frequently. By offering increased savings at higher tiers, Shell incentivizes members to aim for Platinum Status, where they can enjoy more benefits.
• The Fuel Rewards app is a convenient tool for members to monitor their status, track their savings, and access exclusive offers. The app's user-friendly interface enhances the overall customer experience, making it easier for members to maximize their rewards.

3. Shell Go+

Shell’s UK rewards program is called Shell Go+. Unlike other programs that use points, Shell Go+ rewards you with visits. Each visit brings you closer to earning bonuses.

How does the Shell Go+ loyalty program work, and what are its benefits?

• Customers earn a visit every time they spend £10 or more on fuel or £2 or more in-store at participating Shell stations. Each visit counts towards rewards, and after every 10 visits, customers receive money off fuel.‍
• The benefits include: 10% off all hot drinks and Shell deli food ranges every time, 10% off Shell Helix Motor Oil and Shell car washes, and special treats and surprises along the way, with additional savings on Shell V-Power fuel.

Highlights:

• Shell Go+ uses a visit-based system rather than points, making it simple and intuitive for customers to understand their progress. Each visit brings them closer to tangible rewards, which can motivate frequent use.
• After every 10 visits, customers receive money off their fuel purchases. This milestone-based reward system keeps customers engaged and encourages repeat visits to achieve the next reward.
• The Shell Go+ mobile app allows customers to easily track their visits and rewards, ensuring they are always aware of their progress and upcoming benefits.

4. BPme Rewards

BP is one of the world's largest oil companies, operating in all areas of the oil and gas industry, including exploration, production, refining, distribution, and marketing.

How does the American BPme Rewards program work, and what are its benefits?

• Upon registration, the BPme Rewards program offers customers 5¢/ gallon on every fuel purchase at BP and Amoco stations. 
• There are no restrictions or minimum spending requirements. The discount is automatically applied at the pump, requiring no additional action from the customer. 
• Occasionally, members receive bonus rewards on top of the standard 5¢ discount.

The BPme petrol loyalty program operates through a mobile app that offers features such as:

• Digital payment options: Customers can pay for fuel and other purchases directly through the app.
• Rewards tracking: The app keeps track of points earned and available rewards.
• Exclusive offers: Members get access to special deals and promotions.
• Station finder: Helps users locate the nearest BP service stations.

Highlights:

• The BPme Rewards program provides an instant 5¢/gallon discount on fuel purchases without any restrictions or minimum spending requirements. This straightforward and consistent saving makes it attractive for regular users.
• The discount is automatically applied at the pump, eliminating the need for additional steps or actions from the customer. This convenience enhances the overall user experience and encourages loyalty.
• The ability to pay for fuel and other purchases directly through the BPme app adds a layer of convenience and modernizes the fueling experience, appealing to tech-savvy customers.

5. Exxon Mobil Rewards+

ExxonMobil is one of the world's largest publicly traded oil and gas companies, involved in the exploration, production, refining, and distribution of oil and natural gas, as well as the manufacturing of petroleum products and chemicals.

The Exxon Mobil Rewards+ program allows customers to earn points on fuel, convenience store purchases, and car washes at Exxon and Mobil stations.

How does the Exxon Mobile Rewards+ program work, and what are its benefits?

• Customers earn 3 points per gallon on fuel and 2 points for every dollar spent in the convenience store and on car washes.
• Points can be redeemed for discounts on fuel, store items, and car washes. Every 100 points equals $1 in savings.
• Customers also receive bonus rewards when they refer a friend or family member to Exxon’s fuel rewards program. Additionally, they receive a birthday bonus in the form of 100 loyalty points.
• Premium status members earn an additional 3 bonus points per gallon when they fill up 3 times a month with eight gallons or more of Synergy Supreme+™ premium gas.
• Members often receive special promotions and bonus point offers.

Highlights:

• Offering bonus points for referring friends and celebrating birthdays adds a personal touch and encourages word-of-mouth promotion, enhancing customer engagement and loyalty.
• Premium status members earn additional points for using Synergy Supreme+™ premium gas, which incentivizes customers to purchase higher-margin products and rewards frequent users with extra benefits.
• The Exxon Mobil Rewards+ app allows customers to track their points, locate stations, and access exclusive offers easily. The app also supports digital payments, adding convenience and modernizing the customer experience.

Building a robust loyalty program in the fuel retail industry requires a blend of competitive pricing, exceptional retail experiences, and personalized customer engagement. By focusing on these key areas and leveraging data effectively, gas stations can foster stronger customer loyalty and drive long-term success.