Drop Tank recently announced that more than 1,000 Marathon-branded stations are now certified to accept its fuel discount products, which instantly drop the price of gas at the pump. Installation began in January 2015 and continues across the company’s retail network throughout this year. Drop Tank’s fuel discount program drives customer engagement and customer loyalty for its participating brands.
Loyalty360 caught up with David VanWiggeren, President of Drop Tank, LLC, to discuss the expanded program and its impact on customer engagement and customer loyalty.
How does this program work and how does it impact the customer experience and customer engagement?
Marathon stations are being enhanced with Drop Tank technology to accept instant, cents-off-per-gallon fuel discounts. Drop Tank does not offer a loyalty program of its own. Instead, it integrates with other loyalty and engagement providers to add fuel discounts to existing loyalty programs and promotions. In this way, those programs are able to take advantage of digital codes and physical cards that drop the price at the pump instantly, a proven way to motivate and engage customers. For example, when our deployment with Marathon is complete, members of existing loyalty programs will be able to redeem points for instant fuel discount codes, redeemable at Marathon. The loyalty program benefits by introducing a new and powerful way to engage with its base and Marathon benefits by seeing new faces at the pump.
What has been the feedback from Marathon and its customers?
CentsOff Marathon is available, but hasn’t been officially launched. Deployment is scheduled to be completed later this year. Once all enrolled Marathon locations are certified and able to accept CentsOff Marathon fuel discounts, a larger effort will engage Marathon locations, businesses, and end customers.
Marathon is excited and looking forward to CentsOff Marathon driving incremental sales. It’s no secret that customers love to save money on gas, so we expect the overall customer experience to be very positive.
How do you define customer loyalty and has that definition changed or evolved in recent years?
Good question! Customer loyalty means so many different things in different industries…and it means different things to different people even in the same industry. In the major oil fuel brand world (e.g. Marathon), the major oil companies don’t own the gas stations so they have no direct interest in the c-store business and really only sell four products: regular, mid-grade, premium, and diesel. In addition, end consumers are extremely price-sensitive when it comes to gas. What other product has its price on a huge pole sign 40 feet high?
This causes major oils to look for ways to leverage that price sensitivity when implementing their loyalty strategy. So, a number of major oil-led loyalty initiatives seek to make the gas stations a redemption network for third-party funded rewards (e.g. grocery loyalty rewards). These types of programs are proven to deliver strong ROI to the third party because fuel discounts are meaningful in small denominations and they address an emotional need from consumers (i.e. “I do all I can to save on gas” is something we hear frequently). In turn, this drives incremental visits to the fuel brand, incremental gallons, and hopefully incremental c-store purchases.
This phenomenon hasn’t changed in recent years. What has changed is the ease with which entire fuel brands, like Marathon, can now add cents-off-per-gallon capability to their networks. Payment Card Industry changes forced gas stations to upgrade their POS systems across the board in the last 3-5 years. Drop Tank is integrated with this new crop of POS systems so we are making it easy for fuel brands to add this functionality and partner with existing loyalty programs.