All hands to the pump

New Zealand Marketing - - TVNZ NZ Marketing Awards -

In just 18 months, AA Smart­fuel signed up half the coun­try and a host of re­tail part­ners to its in­no­va­tive loy­alty scheme.

The chal­lenge

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 re­sponse

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.

The re­sults

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.

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