Under the Hood of Shell's $100 Million Loyalty Program

Under the Hood of Shell's $100 Million Loyalty Program 642 802 C-Suite Network
Shell Oil CMO Dan Little.
Shell Oil CMO Dan Little. Credit: Shell Oil.

Did you know that Shell Oil is the only major fuel brand that still operates in all 50 states? The company boasts 14,000 sites across the country, in fact. But the proprietary gas stations of big box retailers and grocery stores have become formidable competitors in the last 20 years, and now account for about half of the market, increasing the pressure on Shell to drive loyalty.

“Forty-two percent of all U.S. drivers frequent or come to Shell,” says Dan Little, the company’s chief marketing officer. “But when it gets to loyalty, which is a measurement of frequency, we’re pretty much middle of the pack versus the other majors.” Little and his team hope to change this statistic with an innovative, many-pronged approach to building consumer loyalty.

The road to more rewards

The inspiration for Shell’s first loyalty program, called Fuel Rewards, came from a 2009 partnership with Kroger supermarkets. When Shell began allowing Kroger customers to spend their rewards at Shell stations, it soon became clear that both parties were profiting from the partnership. “A fuel discount, we found, was very emotive for consumers,” Little says. “The price of fuel can change behavior.” The goal of the next program? To scale this lucrative model nationally.

This year, Little’s team relaunched the program with a new name — Instant Gold Status — in response to a unified request from its customers for more rewards. In addition to accepting local partner points, Instant Gold Status gives members an automatic 5-cent per gallon discount with every purchase, countrywide. The only stipulation is that they visit a Shell station six times within 90 days. Any less than that and the member returns to Silver Status, which still affords a 3-cent per gallon discount.

Prior to the relaunch, Little says that only 10-15% of its customers were true brand loyalists — “road warriors” who drive a shocking 70-80% of Shell’s profit margin. “We have an ambition to move that to three times…