All hands to the pump
In just 18 months, AA Smartfuel signed up half the country and a host of retail partners to its innovative loyalty scheme.
Shopping docket fuel discounts have been nothing short of a phenomenon in New Zealand. But the team behind AA Smartfuel wanted to take the concept further.
The fuel docket marketplace was already fiercely competitive and there was little room for another contender, especially one launching from a genuine start- up position. In comparison, the big players in the market— primarily Progressive and Foodstuffs— had ample funds at their disposal. Added to this, a huge range of retailers were getting in on the loyalty act and consumers were feeling rewards programme fatigue, so it was always going to be a tough task.
The scheme’s roots go back to September 2010, when the idea of doing away with messy coupons and letting consumers accrue fuel discounts via the swipe of a card at a range of different retailers, was trialled in the Manawatu. Using high street retailers to issue fuel discounts was positively received and customers clearly perceived the value. So too did the retailers, which saw lifts in frequency and basket value and were able to hone their promotions and provide more relevant offerings for customers through the integration of EFTPOS activity, POS data and the web.
The success of the trial attracted AA, BP and Caltex. And AA Smartfuel went national in November 2011 with 1,000 retail partners.
Rather than send out cards, it decided to let retailers distribute cards in- store and considerable emphasis was put on consumer support, with cardholders able to manage their account and check their discount balance online or by text. Help was also made available through a 24/7 dedicated call centre.
Radio and billboards aimed to reach drivers in their cars; TVCs played an educational role; access to the AA database meant DM and eDM were powerful acquisition tools; and there was plenty of POS at participating retailers. But a key point in the strategy involved leveraging the marketing activities of its retailers and getting them to use the AA Smartfuel brand in sales promotions and everyday communications so it could have the presence of a cashed- up multinational without paying for it.
Not too many start-ups can claim to have acquired half a country’s adult population in its first 18 months. But that’s exactly what this fuel savings programme has achieved, with the scheme attracting over 1.58 million cardholders and generating savings of $70 million. New cardholders are joining at a rate of around 20,000 per month, outpacing any other loyalty programme in New Zealand by a long shot.
The programme has also proven to be surprisingly scalable. It works just as well with small community-based retailers as it does for the large multi- chain businesses. And the upshot is this gives consumers genuine choice and variety as to where they collect their fuel discounts, rather than having to shop at one place.
The scheme now has 2,000 retail outlets on its books. And the snowball effect means that as retailer numbers grow, so the programme’s presence increases.
Collectively, this all forms the backbone of a powerful marketing strategy, one built around a consumer proposition with broad appeal, and the ability to provide maximum traction from minimal resources.