The following column, which appears each issue, looks at new and emerging trends in direct marketing. Alternating columnists are Barbara Canning Brown, a leading figure in the Canadian direct marketing industry, and David Foley, a specialist in database marketing programs.
Has petro-points run out of gas?
When Petro-Canada launched its customer rewards program, petro-points, in October 1995, it was, as one Petro-Canada official said at the time, ‘a major launch.’
Teams of logo-clad representatives promoted the program at the pumps, cashiers passed out brochures, and radio and television commercials hyped the club’s positioning as ‘the rewards program for your car.’
But is it working?
On February 4th, the gasoline retailer launched a massive promotion Ñ PETRO-POINTS 1996 Pump N’ Win Sweepstakes Ñ which might reflect petro-points’ failure to attract new customers or celebrate its success. (A sweepstakes was not part of petro-points’ three-city test in 1995).
The sweepstakes design offers some clues as to its objectives.
First, the long contest period of 119 days gives gasoline-buying consumers many opportunities to enter…many opportunities for this Petro-Canada promotion to influence, at least temporarily, their buying behavior. A current petro-points member who purchases gasoline once every seven days would have 17 purchase/entry opportunities. As well, a four-month duration allows for non-members to join, receive their membership cards through the mail and still participate in the sweepstakes.
Second, the number and value of the prizes (up to 72,610, of which up to 72,500 comprise 2,000 program bonus points) indicates a broadly-distributed winner base, all at an award threshold.
At 2,000 points, a petro-points member can claim one of two rewards, a jug of windshield washer fluid or one litre of motor oil, which retail for $2.99 each at my local Petro-Canada station.
Normally, points accumulate at 10 per dollar spent. Therefore, it would take $200 worth of gasoline purchases, or approximately 360 litres, to earn sufficient points to claim either of these rewards. Could it be that some customers have concluded that the program rewards are just not worth the time and bother of accumulating them?
(It’s partly a problem of tax: Since retail gasoline prices are about 50% tax, the reward levels must be higher, on a percentage basis, than for products sold without the same tax levy. What is worse, for gasoline, the taxes are buried in the retail price and not shown as they are for most products sold at retail. As well, since the program has no direct membership revenue, all recruitment, promotion and administration costs need to be covered through net customer revenue, which may influence the reward levels.)
As is common in sweepstakes like these, the prize-winning transactions are determined by ‘random computer-generated selection.’
But, the Pump N’ Win Sweepstakes has an interesting wrinkle built into it: customers who charge their gasoline purchase to a Petro-Canada Personal Credit Card that is registered in the petro-points program have a much better chance of winning a prize.
For this contest, a petro-points collector who makes an eligible purchase and either pays cash or uses a debit card or non-Petro-Canada credit card has half the chance of winning as a petro-points collector who charges the same eligible purchase to a petro-points registered Petro-Canada Personal Credit Card.
Specifically, the odds of winning a car are 1 in 1,446,027 for the first purchaser noted above and 1 in 723,014 for the latter purchaser.
Similarly, the odds of winning 50,000 Petro-Canada points are 1 in 144,603 and 1 in 72,301 respectively.
The odds of winning 2,000 points are 1 in 199 and 1 in 100 respectively.
The contest rules include the following statement:
‘petro-points members may increase their chances of being randomly selected for a potentially winning purchase transaction, by applying for, being approved for, and using a petro-points registered Petro-Canada Personal Credit Card.’
Sam Azoory, Director of Card Services for Petro-Canada, confirmed that Personal Credit Card holders were notified of the Pump N’ Win sweepstakes, but considering all the information stored in the ‘club’s’ database, one is left wondering why a Petro-Canada Personal Credit Card solicitation mailing wasn’t sent to non-card holding, points-collecting Petro-Canada customers.
David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (905) 940-8784; fax (905) 940-4785.
