How to evaluate grocery + gas branded partnerships

Asking the right questions, analyzing results, and augmenting success

By Alex Kinnier

Loyalty programs are easy to appreciate: they reinforce branding, promise to increase volume, and seem to present little-to-no risk of profit loss.

However, as previously detailed here, when evaluating the success of your loyalty programs, a disciplined focus on return on investment (ROI) is critical. It’s the only way to translate your perception of a program’s success into the reality of data: customers gained, profits increased, and the cost to achieve those outcomes.

At GetUpside we believe you shouldn’t discount your product unless you know exactly how much more money you are making by providing the discount than without the discount.


Evaluating the impact of the Sunoco — Safeway promotional program

In late July, Sunoco launched its partnership with Safeway in the DC area, providing us with a unique opportunity to evaluate how well this program is delivering return on investment.

In our assessment of the Sunoco-Safeway loyalty program, as in our assessment of all loyalty programs, we focus on the two main drivers that determine ROI:

  1. The number of new customers attracted
  2. The increase in purchases by existing customers

Analyzing purchases at the individual customer level: Our methodology

To evaluate the ROI of the Sunoco-Safeway program, we evaluated each customer’s purchases before and after they started using the program.

Data reviewed:

Found under the Financial tab of the Sunoconet portal, the Safeway Loyalty Rewards Program Report includes date, time, and sale amount of each transaction. For credit card purchases, we then matched this data to the date, time, and sale amount in the detail section of the credit card transaction summary, which also includes the anonymized, unique, 4-digit account number and card type used by each customer.

With that anonymized unique account number and card type combination, we are then able to see if a customer is new, (i.e. their first transaction at the station was with the Safeway program) or, if they aren’t new, the number, type, and sale amount of transactions both before and after they started earning promotions with the Safeway program.

Time period examined:

Our data set included both the transactions in August and September at four Sunoco stations in the DC area, for customers who started using the program in August, and their transaction history (if existent) for the six months prior. While the volume of Safeway transactions varies significantly by location over the time period, the overall trends of the results are consistent.

It is important to note that this program is new. Customer mix and behavior will change as it matures — most likely favorably to ROI. We will continue to evaluate the program’s performance and report out.


Assessing return on investment: Our findings

As stated earlier, we focused our assessment on the two main drivers that determine ROI: the number of new customers attracted, and the increase in purchases by existing customers. Here’s what we found.

The number of new customers attracted:

  • At a given station, 23% of customers earning discounts via the Safeway program were new (i.e. the anonymized, unique account number used for their Safeway transaction had never been used during the previous six months at the station).
  • Conversely, 77% of the customers earning discounts via the Safeway program were existing customers of that station.

The increase in purchases by existing customers:

  • At a given station, the existing customers completed 22% more gas transactions per month after they started using the Safeway program than they did prior to using the Safeway program.

Resulting return on investment:

Based on this data, the average return on investment for the Safeway program across the stations evaluated is ~0%. As always, return on investment is calculated as profit gained from the promotion minus cost of the promotion, divided by the cost of the promotion. Determining factors are:

  • The $0.04/gallon fee the station pays per transaction on existing customer transactions that were expected to have occurred even without the Safeway program
  • The $0.04/gallon fee the station pays per transaction on new customer transactions
  • The small 1:5 new-to-existing customer ratio the Safeway program had in its first month
  • The lift achieved with existing customers

With the Safeway program, stations are paying $0.04 per gallon on existing customer transactions that would have occurred even without the Safeway program. Based on the data, this cannibalization outweighed the lift in transactions achieved within the existing customer group. This, plus the small ratio of new-to-existing customers brought in by the program, results in the net return on investment being nonexistent.

Though return on investment is currently unproven, we’d be remiss not to note that we do expect customer mix and behavior to change, and improve, as this new program gains traction. This presents you with an opportunity to augment this program, and ensure maximum ROI, by implementing GetUpside right alongside your current grocery + gas program.


Adding GetUpside to your promotional plan

Assessing data from 7,500+ registered GetUpside users and 130+ participating stations in the DC area, our evaluation shows that GetUpside is a strong candidate for any station the DC area.

The number of new customers attracted:

  • At a given station, 80% of customers using GetUpside at a station are new (i.e. the anonymized, unique account number used for their GetUpside transaction has never been used before at the station).
  • Conversely, 20% of the customers using GetUpside at a station were existing customers of that station.

The increase in purchases by existing customers:

  • At a given station, existing customers are completing 37% more gas transactions and 70% more store transactions per month after they start using the GetUpside program than they did prior to using the GetUpside program.

Resulting return on investment:

  • The average return on investment for the GetUpside program across the stations evaluated is 37%. In other words, for every dollar spent on GetUpside, GetUpside returns $1.37 in profit beyond what would have been earned historically from GetUpside users.

Post-evaluation recommendation:

Though our Sunoco-Safeway evaluation didn’t find positive ROI, we do believe this will improve significantly as more users start using the program. We’ve found this to be true as GetUpside has grown, and we expect the same for Safeway.

Complementary in nature, GetUpside will never offer a discount that conflicts with an existing rewards program. Getpside adjusts offers at the individual customer level to account for any other discounts that have been applied through existing branded programs. Therefore, the strongest, and most thorough approach to increasing profits is to implement Upside alongside your gas + grocery rewards program.

With GetUpside, you are assured a positive ROI on day one.


Your station’s evaluation

Contact GetUpside today for an evaluation of your rewards programs to find out exactly how many new customers are being attracted, how much more you’re earning from existing customers, and exactly how much return you’re earning right now.


GetUpside is the easy-to-use revenue generation platform that gets more customers, buying more, at your station. Ready to get in touch? Sign up to learn more about how your station will profit with GetUpside’s proven model.