Shell – Playing it’s cards right
Shell is the largest branded retailer in the world with over 45,000 sites. It operates loyalty schemes in 20 countries and has 20 million registered loyalty customers.
Crispin Rogers, global loyalty and B2C payments manager for Shell explained to Loyalty why the concept of loyalty is so important for his company.
Shell is truly a global company and its card programmes are no different. Shell has adopted the strapline ‘Get the most out of every drop’ – and as well as highly developed fuels based on years of research, the card programmes really deliver on that promise to customers.
From traditional, points based Loyalty programmes to cross-sell alliances with grocers, co-branded credit card offers and broader based payment card rewards – Shell is at the forefront of Loyalty in the fuels sector.
Loyalty Managed Schemes
Shell has been operating Loyalty programmes for 20 years and has over 20 million registered customers across 20 countries. Crispin Rogers said: “Most of our programmes are ‘managed schemes’ where Shell runs the scheme using its own, in-house built operating system and manages all aspects of the value chain with key partner suppliers.”
Shell Loyalty Programme Markets:
Austria, Bulgaria, Czech Republic, Germany, Greece, Hong Kong, Hungary, Italy, Philippines, Poland, Slovakia, Switzerland, Turkey, United Kingdom, Ukraine
Canada, Malaysia, Netherlands, Norway
B2C Payment Markets:
(Cobrand/Credit Cards Offers)
Czech Republic, Greece, Hong Kong, Norway, Sweden, Malaysia, Philippines, UK, Hungary, Brazil, Canada, US, Poland, Singapore, Turkey, Thailand
Hong Kong, Nordics, Switzerland, US
ACH (Saver Card):
Germany, US plus other local offers
Significant economies of scale have been achieved by consolidating aspects of the value chain and finding key suppliers to service all markets.
Examples of this include gift sourcing, purchasing and logistics with arvato – part of the Bertelsmann Group – (see panel for more info about arvato) which also provides the multi-lingual Customer Service Centre with the main hub in Istanbul:
One catalogue design is used, provided by RMG Connect, part of JWT.
Card production is with GHP: And marketing database management, segmentation, campaign management and customer insight is with dunnhumby.
The points based schemes are predominantly catalogue based – offering a range of approximately 80 gifts per market, tailored from a slightly larger range chosen with arvato. The catalogues also promote the option to redeem points for money off fuel as well as a variety of partner offers with other major brands.
Money off fuel
Discounts on fuel are an increasingly strong proposition as fuel prices continue to rise and with a growing segment of customers appreciating the opportunity to reduce their outgoings.
“At Shell this fits well with our commitment to help customers get the most out of every drop of fuel,” said Rogers. “But the extent to which this replaces other redemption options for customers does vary by market – and there remains a significant segment of customers who seek other reward types, such as higher value treats including electronics or experiential type rewards. All customers are not the same”
In 2007 Shell re-launched the UK Loyalty programme – migrating customers from the old Shell pluspoints to the new Shell Drivers’ Club.
“Shell pluspoints had become increasingly focussed on high mileage drivers with a highly tiered offer – and as such had ceased to be a mass market play,” explained Rogers. Shell Drivers’ Club was introduced to refresh the Loyalty offer and broaden its appeal.”
Customers receive money off fuel vouchers via a quarterly statement via automatic redemption as a default – but can opt to receive instead vouchers toward the gift cards available in Shell stores or to convert their points to Airmiles.
Finally, in a first of its kind, there is also the option to redeem points against UN verified CO2 reduction projects – whereby Shell matches the amounts collected by the customer and uses the credit to buy secondary Carbon Emission Certificates on the open market; these CERs are then taken out of the market, making this a strong carbon off-set proposition.
There are now well over twice the number of customers on the scheme and the quarterly statements are driving significant uplift in activity, driven by the highly targeted offers and vouchers.
At the other end of the spectrum, Shell tailors its Loyalty scheme in the Philippines to the ‘jeepney’ drivers – professional taxi drivers. This includes providing as benefits in the scheme life insurance and offering jeepney vehicles and academic bursaries in the prize draw activities.
“This reflects the balance that needs to be struck between commonality and economies of scale – for the operating system, card production etc – and localisation to market specific customer needs,” comments Rogers.
Shell participates in several Loyalty coalition schemes around the world and indeed has an equity share in some.
Rogers said: “The Airmiles schemes in Canada and the Netherlands, Trumf in Norway and BonusLink in Malaysia give us the opportunity to get the cross-sell benefits between the various coalition participants; and to enrich the customer offer by enabling points/miles to be collected faster due to the multiple issuing partners.”
The top tier of Shell’s Loyalty programmes is the V-Power Club – which provides additional benefits and exclusive rewards to Shell’s most valuable customers.
Entry to the Shell V-Power Club is by invitation only – with customers having first to register to the standard Loyalty programme and then being invited to join the Club once they qualify via purchasing a sufficient volume of Shell V-Power fuels. So the tiering is based not purely on overall usage, but is specifically tailored around the premium fuels product.
Customers in the Shell V-Power Club can earn points faster when buying Shell V-Power and have access to exclusive rewards and competitions – both of which leverage heavily off Shell’s technical partnership with Ferrari.
Customers also receive an exclusive magazine – V-Zine, produced by Redwood for Shell and covering a rich array of motoring related articles and in particular behind the scenes stories from Shell. The magazine is typically sent direct to Shell V-Power Club customers’ homes in the post, although in Poland V-Zine is sold via the Shell service station shop and in other Central European markets the content is combined with the gift catalogue range and distributed through the stores.
Coalitions and V-Power in tandem?
“Coalitions offer a broader range of points accrual possibilities, whereas V-Power is offering exclusivity. These seem two very different offerings, but they can definitely be offered in tandem,” says Rogers.
“Our Loyalty offers mirror our fuels product offerings – serving different customer segments who have different needs. Indeed customers enjoy the opportunity to collect points faster from coalition partners or other marketing alliance partners in our managed schemes.
“But there is also a group of customers who really want to get the best out of their cars and who share our love of driving – and who appreciate our premium fuels, Shell V-Power and Shell V-Power Diesel. Shell V-Power Club recognises these customers and provides the additional offers and benefits – including V-Zine – to engage these customers and help feed their passion for driving. Our launch this month of Shell V-Power Club in the Netherlands, alongside the Airmiles coalition programme demonstrates that these two approaches are compatible.
“We have the V-Power Club currently in Italy, Poland, UK, Germany, Greece, Malaysia and the Netherlands – with a lighter touch, web based version in Australia.”
Qualification varies a little by market but is typically 150-200 litres of Shell V-Power fuels purchased in a quarter/3 months.
Qualifying customers receive a welcome pack including a replacement card with specific Shell V-Power Club design – or a key fob with the design in miniature.
“Benefits include bonus points on Shell V-Power fuels purchased, some exclusive redemption gifts as well as some preferential rates on gifts for Shell V-Power Club members; exclusive competitions and offers leveraging in particular our partnership with Ferrari – so visits to the new factory, pitlane access at F1 events, track days etc; the V-Zine magazine three times per annum and exclusive web content, including further behind the scenes insight to the articles in V-Zine including videos and interviews. So a wide range of benefits – being added to all the time in fact,” said Rogers.
“There are over a million customers in the Clubs so far – with the markets fairly equal in size. But these customers over index on most metrics for us, warranting the extra focus and attention we give them.”
Another member of the loyalty family in Shell is the cross-promotion with grocers – an example being in the US with Kroger and Shop ’n Shop amongst others. Customers buy their groceries in the hypermarket and swipe their hypermarket loyalty card. They then visit the Shell site and swipe that loyalty card in the Shell pay-at-the-pump card reader – which does an on-line check to confirm whether the customer has qualified for a discount. Once confirmed, the Shell pump literally rolls back the price of fuel in front of the customer’s eyes and the customer can complete the transaction and enjoy the discount.
Shell has co-branded credit cards in numerous markets globally, to provide further opportunities for customers to earn rewards in recognition for their loyalty to Shell.
This includes a multi-market arrangement with Citibank with cards in the USA, Czech Republic, Hungary, Philippines, Hong Kong, Malaysia, Norway and Sweden. Exact customer propositions vary, although the programmes typically offer money off Shell fuel as the headline offer – with a richer reward on the purchase of Shell fuel and a broad offer on all other purchases.
Fuel cards, ACH and Pre-paid
Shell has operated fuel cards– equivalent to store cards in other sectors – for over 40 years in several markets , for customers who like to compartmentalise their spend. A more recent addition to the portfolio has been the Shell Saver Card in the US – which is an innovative debit card solution giving customers a regular fuel discount.
Customers register for the card and nominate the bank from which they wish to draw funds. When the customer makes a fuel purchase, the transaction is then treated as an Automated Clearing House transaction – essentially a direct debit – from the customer’s current account, with the discount on fuel applied to the transaction.
Whilst already available in the US, the SEPA changes in Europe could provide opportunities for such products across the EU.
Prepaid cards reach another sector of customers again – either as gift cards or to help customers manage their, or their dependent’s spend.
“We use prepaid cards mostly as a B2B2C offer – partnering with major companies and brands to offer gift cards to their customers or staff,” said Rogers. “Re-loadable prepaid cards represent an increasingly attractive payment option for a specific and growing segment of customers.”
Shell also has broader based payment card offers with major banks around the world to provide as wide a reach as possible for offering benefits to customers. Examples include Shell joining the recent launch of the Barclaycard Freedom launch in the UK, offering opportunities to earn money back on Shell fuel to 8 million Barclaycard holders.
In parallel, Shell launched an exclusive offer in Germany for 5 million Postbank debit card holders, offering money off at the time of transaction or double Loyalty points.
And in Asia Shell has expanded its relationship with Citi to provide all Citi credit cardholders in Indonesia with a rich money off fuel offer; whilst in Thailand all Citi cardholders enjoy frequent treats such as free cold soft drinks at Shell.
Citi customers can earn points in other countries but typically at the lower rate. For example, the 1% earn rate rather than 3% on Shell fuel in-country. This is for technical reasons.
arvato is an important service provider for Shell, providing not only the gift sourcing, but also the multi-lingual customer service centre. The main hub is based in Istanbul, which has excellent access to service agents with the right language skills – with a satellite in the Czech Republic servicing the markets in Eastern Europe. These two hubs have nearly 200 agents answering several million calls, e-mails and letters – as well as managing some fraud prevention programmes. With common KPIs (key performance indicators), service and reporting across all markets.
|arvato services for Shell|
arvato services, a subsidiary of arvato AG, is one of the largest loyalty service providers in Europe and a leading global player.
Shell began the relationship with arvato in 2005 when it outsourced the rewards management for its Shell ClubSmart loyalty scheme in 9 European countries. In 2006 this was expanded to 14 countries where arvato services acts now as the exclusive service provider in the areas of product scouting, consulting and sourcing.
arvato has its own sourcing unit in Asia as well as direct relationships with brand suppliers.
The logistics for delivering products directly to the end-customer, to Shell stations or to local rewards distribution centres are provided by arvato services which distributed over 1 million rewards for and to loyal Shell customers in 2009.
Since 2006 arvato services is also providing customer service solutions to Shell and today arvato runs customer service centres for ClubSmart in 3 countries with around 100 Agents answering any kind of customer requests of ClubSmart members in 13 languages.
In 2009 arvato handled almost 2 million customer requests via telephone (inbound and outbound), email and print letters.
If you include not just direct Shell employees, but all of the retailers and their staff, such as sales assistants and pump attendants, there are over 1 million people in the value chain to enable customers to get quality fuels for their cars – most of whom employed by the independent retailers that run the sites. Card programmes – both Loyalty and Payment – enable Shell to connect directly with customers to engage and reward them for their custom.
Future loyalty developments
Loyalty Magazine asked Crispin Rogers what he expected to see in terms of potential developments in loyalty in the next few years. He replied that he would expect to see:
a) More partnerships between big brands to give customers richer rewards and brands more access to one another’s customer bases
b) Increasing merging of payment and loyalty – especially in the debit and prepaid spaces.
c) Customer engagement going electronic, more personalised, increasingly mobile and increasingly real-time.
d) Increasingly intelligent use of customer data to provide customer insight to inform marketing decision making across the business.
“Shell continues to add new partners to our schemes – both for collection and reward – so customers have the opportunity to pool their points or earn points faster. Customers love that and we’re very open to it,” says Rogers.
“We already have ties with several airlines around the world – typically as a redemption option for our points. For example Air Berlin in Germany, Airmiles in the UK.”