How to evaluate grocery + gas branded partnerships

Asking the right questions, analyzing results, and augmenting success

GetUpside
GetUpside
Oct 5, 2016 · Unlisted

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 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

Data reviewed:

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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:

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

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.
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Resulting return on investment:

  • 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

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.
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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.
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Resulting return on investment:

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Post-evaluation recommendation:

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


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.

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