Year-old loyalty card becomes Sunoco’s ‘single most attractive offer’

Last Year's Headline:
Sunoco pumps up new loyalty program

Last Year’s Headline:

Sunoco pumps up new loyalty program

Synopsis: Sunoco, a subsidiary of Calgary-based petroleum company Suncor Energy, launches a loyalty card program that offers a 2% discount on car washes, snacks and gasoline to its natural gas customers. At the time, the discount works out to as much as 1.5 cents per litre. The Sunoco Affinity Card is intended to appeal to homeowners, retail customers and natural gas customers, as well as employees.

In a bid to cross-market services such as natural gas, gasoline and other convenience needs, Sunoco starts a direct mail campaign to support the affinity program. Existing natural gas and Sunoco credit card customers are targeted. Point-of-sale materials and a promotion in partnership with a popular Toronto radio station are also used as marketing tools.

A Web component of the campaign allows customers to purchase ‘Web Gas’ vouchers online that can be redeemed at Sunoco fill-up stations.

The program complements Sunoco’s existing Canadian Automobile Association (CAA) loyalty program partnership, which allows CAA members to swipe their cards at Sunoco retail outlets to receive credit toward the cost of membership renewal.

Prior to the program’s soft launch, renewal notices were sent to roughly 76,000 of Sunoco’s 125,000 natural gas customers. Customers were enticed to sign up for the affinity club online with the promise of a $5 gas coupon and a chance to win a restored Porsche Targa 911.

As part of the registration process, customers are asked basic demographic questions, as well as more extensive optional questions about purchase habits, to allow Sunoco to make its first foray into database marketing.

One year later: Sunoco continues to run the Affinity Card program in exactly the same way, in tandem with the CAA loyalty program. The new program reached expectations in its early stages, and Sunoco now finds that 30% of customers who are offered the card choose to become Affinity Card members.

‘We have found that this card is the single most attractive of all our offers,’ says Steve Douglas, Sunoco’s director of marketing and stakeholder relations.

The biggest gain Sunoco has made from this program has been increasing awareness of natural gas among its customers, through its cross-marketing techniques.

‘We continue to notice that natural gas is at a low level of interest and we are not able to capture customers through that market directly,’ says Douglas. ‘The most interesting thing we have learned is that we can stimulate sign-ups in this low-interest category, by linking it with a high-interest category like gasoline,’ he continues. According to Sunoco’s data, 88% of its long-running CAA loyalty members are now aware of the affinity program.

Marketing at the point of sale was found to be quite unhelpful in attracting new customers.

‘The natural gas offer is quite complex, so it’s not a decision that people want to make when they are in a hurry,’ explains Douglas. ‘When a customer enters the gas station, their interest is in getting in and getting out.’ However, he continues: ‘The Internet generated a fair level of participation because Web-savvy customers like the ability to explore at their own pace and in their own time.’ During the online contest and $5-offer period, which ran for two months, online sign-ups to the affinity program increased 20-fold. Around 10% of all sign-ups were made online. ‘That is substantially higher than we had seen prior to or since the contest,’ says Douglas.

Sunoco is using the database acquired from this program to monitor the behavioral and purchase patterns of cardholders. Douglas says that this information is being analyzed and may eventually be used to extend the program to offer individually tailored premiums to customers.

‘At the moment, we are still in the planning stages,’ he says. ‘It will probably be the third year of the program before we have sufficient data to really understand our customers.’

He continues: ‘Eventually, we hope to be in a position to notice that a customer is buying a certain type of car wash, for example, and then offer a package to meet this need. It is a way of establishing what makes an affinity card member different from our other customers.’

The data gathered has not been used for any new direct-mail marketing, although Douglas says this technique may be considered in the future.