Shell® Fuel Rewards®: Basics - FRN University Docs/SFR Basics... · Spreadsheet available on ......

©2011 EXCENTUS CORPORATION | PROPRIETARY AND CONFIDENTIAL 1

Shell® Fuel Rewards®: Basics

Overview and Best Practices

February 14, 2013


Welcome!

Today’s webinar will be in a listen only mode

Please ensure you have dialed into the teleconference.

You can find the dial-in information in the email

confirmation you received or by expanding the audio

section in your webinar dashboard

Throughout the presentation, feel free to type in

questions using the “Questions” section of your webinar

dashboard

We value your feedback and would like to hear what you

thought about today’s presentation, or if you have any

comments or questions, please email us at:

[email protected]

mailto:[email protected]


Today’s Agenda

• Introduction

• Program Overview

• Best Practices

• Offer Case Studies

• Where do I start?


FRN University

Shell Source Password:

frnu


Program Overview


Happy Valentines Day!

$60 x 5 = $300 or $.30/gal savings!!


The Fuel Rewards Network™

1.7 Million

Members


Competitive Loyalty Landscape


Shell® Fuel Rewards®: How it Works

How to earn rewards with Shell® Fuel Rewards®

C-Store Issuance Program to promote products, car washes and

auto services

Wholesalers customize their own offers and order POP

Shell® Fuel Rewards® savings are stackable and there is no

limit to the amount of rewards customers earn

FRN card will be distributed at all participating Shell stations

Expiration is current month plus one

• Example: reward is earned on Feb 14, consumer has until

March 31st to redeem


Why Shell® Fuel Rewards®

Based on data from current participating Wholesalers:

• Boost total inside product sales 3-5%

• Promoted product sales showed increase 10% to 30+%

• Promotional efficiency compared to traditional price discount

80% Redemption; 12 gal average fill, 30% swipe

Drive card activations:

• Top performing SFR sites drive 25x activated cards versus

average Shell site

Stimulate Increased trip frequency at the pump and inside the

store

• Existing customers increase total transactions and dollar

spent by 10% the 90 days after earning 1st SFR reward

Drive adoption to other FRN™ pillars


Offer Creation: Five Step Process

1. Enrollment

2. Planning & gathering Information

3. Building Offers

4. Ordering POP

5. Training Employees, Executing & Monitoring Results


Shell Source

Enrollment Offer Creation POP Ordering

Dealers access via www.shelldealeraccess.com


Offer Types

Single Purchase: Multiple Purchase:

Continuity: Combo:


How are the savings funded?

Savings are funded two different ways:

1. Local Vendor: Existing vendor trade

funds converted to Cents Per Gallon

Rewards

• Off-invoice discount allowance or

scanback

2. Margin: Wholesaler funded (car

wash, fountain drinks, basket offers,

etc.

Margin Funded:

Vendor Funded:


Settlement

Excentus settles directly with Wholesalers

Wholesaler settles with their dealers

Wholesaler does not pay 3.5c/gal “redemption” fee on rewards

they issue

Issuance fees are only charged when rewards are redeemed

• Rates: Car Wash = 0.0045; All Other = 0.009

• CPG value x 100 x Rate

• Example: 10cpg offer= .10 x 100 x .009= .09 or 9 cents flat

issuance fee when reward is redeemed

• Issuance fees DO NOT multiply by gallons redeemed

Excentus settles with wholesaler 5 business days after

redemption

Settlement webinars available on frnuniversity.com

Settlement

webinars available frnuniversity.com


Promotional Efficiency – How it Works

*Numbers based on National averages and estimates, actual results will vary by region and by product offers

Three major promo efficiency “break” points:

1. Gallons Redeemed

2. Swipe Rate

3. Redemption Rate

Fuel Cost Issuance Fee

Cost Per

"Redeemd"

Reward Swipe Rate

Redemption

rate Blended Cost

$0.60 + $0.05 = $0.65 x 30% x 90% = $0.17

$.05 x 12 avg

gallons

dispensed

.009 x (CPG x

100)

What % total

units were

sold on card?

How many

make it

back to the

pump

before

expiration?

Cost across

all units sold

Blended Cost Average


Financial Forecasting: Monster Offer Example

Spreadsheet

available on

frnuniversity.com

Item Description: Monster 16oz

Offer Description:

Earn $.10 Per Gallon when you purchase two 16oz

Monster Energy Drinks

Wholesaler/Location: Various

Type in shaded cells only

Offer Details

Cents Per Gallon $0.10

Units Per Reward 2

Case Pack 24

Is this a Car Wash? ---------------------------->

Redemption Forecasting (See Redemption Reference Table)

Card Swipe Rate 30%

Redemption Rate 90%

Redeemed Gallons Avg. 11

Total Redemption Rate 14.9%

Funding Forecast Promoted Units ONLY:

Consumer Face Value of Reward $2.00

Actual Reward Cost Per Unit $0.55

Issuance Fee Per Unit $0.05

Total Reward Cost Per Unit $0.60

Funding Forecast ALL Units (Blended):

Consumer Face Value of Reward $2.00

Actual Reward Cost Per Unit $0.15

Issuance Fee Per Unit $0.01

Total Reward Cost Per Unit $0.16

Total Reward Cost Per Case $3.86

Additional Metrics:

Retail Price Per Unit $2.59

Gross Margin % (off promo) 45.0%

$ Margin (off promo) $1.17

Promo Cost Per Unit (from c39) $0.16

$ Margin (on promo) $1.00

Gross Margin % (on promo) 38.8%

Lift needed for breakeven 13.8%


POP: Supported Types

Inside: Outside:

wobbler

cooler cling

Lug on

door decal

pole sign

L bent insert

L bent lug on

bollard

small building sign large building sign

pump topper


Best Practices


Offer Strategy

Overtime Carve values back as you

build more members, but increase

# of promos across the store

1 >5 months 2 3 4 Customers

Timeline:

Start aggressive with “manageable”

number of offers, frequently purchased

products/categories

www.fuelrewards.com


Best Practices: “Hero Offer”

Aggressive offer on top-selling item(s)

90 to 120 days

Highly promoted inside and out

Immediate Rewards!

Drives card distribution


What are top performing Shell offers so far?

Rank Offer

Avg Promoted

Units Per site /

Per Week

1 Buy 1 any size fountain/coffee/FZB earn $.05/gal 148

2 Buy 2 16oz Monster earn $.10/gal 110

3 Earn $.10/gal on your 5th purchase of any size fountain/coffee 64

4 Buy 1 Any size Fountain Drink Any Size & Earn $.05/gal 56

5 Earn $.10/gal on your 4th pruchase of any size fountain/coffee 36

6 Buy 2 12oz Red Bulls Earn $.08/gal 21

7 Buy 1 32oz Vitamin Water Earn $.05/gal 16

8 Buy 2 20oz Coke Earn $.05/gal 14

9 Buy 2 Gatorade 32 oz Earn $.10/gal 12

10 Buy 2 20oz Arrowhead Waters Earn $.10/gal 12

11 Buy any 3 piece (or more) Chicken Tender Earn $.05/gal 12

12 Buy any 2 King Size Hershey Bars Earn $.04/gal 12

13 Buy any 1 breakfast sandwich Earn $.05/gal 10

14 Buy any 1 Hamburger Earn $.10/gal 8

15 Buy any 2 King Size Hershey Bars Earn $.05/gal 7

Top offer delivering as many as 140 promoted units per site, per

week!

Top offers so far include fountain, coffee along with other top

selling product categories in the store


If yes, swipe customer’s card If no, remove new card from brochure, swipe card Congratulations, you just earned 5c/gal. There is no

cost to join. Just make sure to register your card

before you can redeem your fuel discounts. Details

are on the back of your card.

Good morning! Do you have your Fuel Rewards

Network™ Card? You can earn 5c/gal reward with your

beverage purchase today!

Cashier Script: Single-Beverage Example

Point out reward balance on receipt…..


The Loyalty Receipt – Single-Beverage Offer Example

“New” cards can earn

rewards prior to

registration: “off-the-

brochure”

Cards not registered will

return, “PlsRegisterCard”

when swiped. This

includes 1st time Issuance

transactions.

In order to redeem,

customer must register

card:

• fuelrewards.com

• FRN Mobile Apps for

iPhone & Android

• Customer Service #


Other Key Learnings & Best Practices

Employee Training and Engagement

• Well-trained employees – site-level documentation on frnu

• Swipe cards when qualifying product is purchased

• Short elevator speech

• Address fraud up front!

Careful not pull out everyday pricing (e.g. 2 for $4) in lieu of Fuel

Rewards®

• Fuel Rewards® should become an alternate promotional strategy to

TPR

• Manage the mix gradually

Promote frequently purchased products and packages to rapidly build

loyal card-carrying members

• Be cautious of using the platform to promote secondary packages or

new items during start up

Test each offers before you go live!

• Must enable “issuance” on POS first


Offer Case Studies


Single Purchase Fountain Beverage Offer – Case Study

180 day duration

10 fountain drinks per day/site on loyalty card

Category Sales+30%, Total store sales+5% (Dec)

Wholesaler averaging over 360 activated cards per site, 9.0x

the average Shell site

Pre/post credit card analysis:

+27.8% increase in total transactions (+1.4 transactions per

member per month)

+43% increase in total $ spent (+$36 per member per month)

Financials:

Confidential - Do Not Distribute


Cost Per

"Redeemd"

Reward Swipe Rate

Redemption

rate Blended Cost

$0.68 + $0.05 = $0.73 x 30% x 78% = $0.17

$.05 x 13.6

avg gallons

dispensed

.009 x (CPG x

100)

What % total

units were

sold on card?

How many

make it

back to the

pump

before

expiration?

Cost across

all units sold



Single Purchase Pepsi 20oz Offer – Case Study

60 day promotion (100% vendor funded)

Total 20oz Pepsi product sales+25% (Nov-Dec)

Wholesaler averaging over 217 activated cards per site,

5.4x the average Shell site


+42.5% increase in total transactions (+2.5 transactions per

member per month)

+59.2% increase in total $ spent (+$57 per member per month)

Financials:


Fuel Cost per

unit

Issuance

Fee/Unit

Cost Per

"Redeemd"

Reward Swipe Rate

Redemption

rate Blended Cost

$0.38 + $0.03 = $0.41 x 30% x 75% = $0.09

$.03/gal X

12.6 gallons

dispensed

.009 x .03 x

100

What % total

units were

sold on card?

How many

make it

back to the

pump

before

expiration?

Cost across

all units sold



Continuity Fountain/Coffee Beverage Offer – Case Study

Everyday retailer funded promotion

Category sales increased +11% (Oct), +15% (Nov)

Total inside sales +3% (Oct – Nov)

16.6 cups sold per day/site on loyalty card

Wholesaler averaging over 184 activated cards per site, 4.6x the

average Shell site


+13.8% increase in total transactions (+0.9 transactions per member per

month)


Financials:


Fuel Cost per

unit

Issuance

Fee/Unit

Cost Per

"Redeemd"

Reward Swipe Rate

Redemption

rate Blended Cost

$0.27 + $0.02 = $0.29 x 30% x 90% = $0.08

$.10/gal X

13.5 gallons

dispensed /

5 cups

.009 x .10 x

100 / 5 cups

What % total

units were

sold on card?

How many

make it

back to the

pump

before

expiration?

Cost across

all units sold



So Where do I Start?

90 Day

Offer


Upcoming Webinars

SFR Basics: Enrollment, Offer Creation & POP Ordering

• 2/14 – 11am to 12pm

• 2/21 – 11am to 12pm

Settlement Webinar

• 2/26 – 11am to 12pm

SFR Optimization (Intermediate)

• 2/26 – 11am to 12pm


Appendix


Shell Fuel Rewards


Blended Cost/Promotional Efficiency Template


$0.60 $0.05 $0.65 $0.17


Cost Per

“Redeemed”

Reward

$.05 x 12 avg

gallons

dispensed

.009 x (CPG x

100)

+ = x 30% 90%

Swipe Rate

Redemption

Rate Blended Cost

x =

What % total

units were

sold on card?

How many

make it back

to the pump

before

expiration?

Cost across

all units sold



Multiple Purchase Monster Offer – Case Study

Rotating promotion (60 – 90 days)

50% Vendor Funded

14.4 cans per day/site on loyalty card

Product sales+26% (Sept – Nov), total inside sales +5% (less

cigarettes)

Wholesaler averaging over 189 activated cards per site, 4.7x the

average Shell site

60 day pre/post credit card analysis:

+21.6% increase in total transactions (+0.9 transactions per member

per month)


Financials:


Fuel Cost per

unit

Issuance

Fee/Unit

Cost Per

"Redeemd"

Reward Swipe Rate

Redemption

rate Blended Cost

$0.65 + $0.05 = $0.70 x 43% x 80% = $0.24

$.10/gal X 13

gallons

dispensed

.009 x .10 x

100

What % total

units were

sold on card?

How many

make it

back to the

pump

before

expiration?

Cost across

all units sold



POP Types and Cost

• Shell Fuel Rewards™ program utilizes pre-approved signage by

Pointsmith Company out of Houston, allow 11 days lead for shipment to

sites

• Cost by signage type listed above


Dealers access via www.shelldealeraccess.com

Once on shelldealeraccess.com,

select “Register for Access.”

Enter Location # you wish to gain

access to, select Fuel Rewards

Network, and continue with profile

setup and registration.


Settlement Scenarios

Green Oil Offers 5cpg for the purchase of any size

coffee or fountain drink

Green Oil pays same issuance fee in all 3 scenarios

• C-store fee rate is 0.009

• Total flat fee : $0.05 x (100 x $0.009) = 4.5 cents

Issuer &

Issuance

Amount

Redeemer &

Redemption

Amount

Issuance Fee Redemption Fee

Example 1

Green Oil - 5¢

Green Oil - 5¢ Green Oil pays $.045

No redemption fee for Green Oil

Example 2

Green Oil - 5¢

Blue Fuels - 5¢ Green Oil pays $.045

Blue Fuels pays 3.5c/gal x gallons dispensed

Example 3

Green Oil - 5¢ Winn-Dixie - 10¢

Green Oil - 15¢ Green Oil pays $.045

Green Oil pays 3.5c/gal x gallons dispensed (triggered by WD reward)


Shell® Fuel Rewards®: Issued TXNs and Redeemed Gallons

• Shell Fuel Rewards continues to build momentum with Issued

transactions and redeemed loyalty gallons

• To date, over 1,400+ sites have created offers across 129+

Wholesalers and growing!


POP Site-level Execution

Shell® Fuel Rewards®: Basics - FRN University Docs/SFR Basics... · Spreadsheet available on ......

Documents

Transcript of Shell® Fuel Rewards®: Basics - FRN University Docs/SFR Basics... · Spreadsheet available on ......