Fuel Rewards Lead to Big Sales in Both Fuel and Food

Sep 12, 2018

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About

JakeMickey LawsonLaurelGroceryCompany_Logo
Jake Jennings and Mickey Lawson
Laurel Grocery Company
Edmonton, KY

Fuel

Store Specs:
19,215 SQ - FT 
10' x 12' fuel service window with six pumps

  

In Edmonton, neighboring grocery stores had been marking down products like milk so low that they were taking a loss to compete. But, because we had a fuel center and they didn’t, we were uniquely positioned to offer rewards to build customer loyalty at both our store and fuel center without engaging in a price war. Initially branded as “Fuel and Food for Less™,* our fuel rewards program is tied to a store-specific My Edmonton IGA Rewards card. To prepare for the initiative launch, we added blades and signage throughout the store and debuted the initiative in our weekly ad, including a bonus $0.10 per gallon fuel reward on meat sales and a special offer of $1.99 per gallon, which was covered by our fuel supplier. Fuel and Food for Less was launched over Father’s Day weekend and the response was tremendous, with lines of cars waiting to get their fuel. Since then, we have rebranded the fuel rewards initiative as “Fuel Cents” and have expanded into a total of 14 stores, some which have their own fuel center and others that have partnered with a local gas station.

*Both Fuel and Food for Less and Fuel Cents are registered trademarks of Laurel Grocery

Center store sales increased 8%
Perishable (meat and produce) sales increased 6%
Fuel gallon sales increased 7%

WHY IT WORKS
For our shoppers:
Value
Customers receive discounts on both fuel and in-store specials.

Convenience
Instead of driving around trying to find the best prices, customers can take advantage of great discounts on both fuel and groceries in one location.

Variety
Bonus fuel rewards encourage customers to branch out and try new products. Many of them find new favorites. This also helps us drive brand awareness. For example, during IGA Days, we offer a fuel reward for IGA-branded items. The bonus rewards are a great way to drive sales in both the fuel center and the specific department.

For the store:
New Marketing Opportunities
When they sign up for the card, customers provide us with an email address that we can use for future marketing initiatives. Plus, because customers scan the card to access in-store sales, it gives us great data about which promotions are most effective.

Reduces Loss From Promotions
Rather than getting in a price war with our competitors, we can pair regularly-priced items with a fuel reward. For example, when a local competitor offered milk for $0.99, we offered a $.05 per gallon fuel reward. This saved the customer more money and we recouped the sales through our fuel centers.

Win-Win-Win
Our fuel rewards program has led to increased sales in both the store and fuel center while encouraging customer loyalty.

Pricing:
In addition to the bonus fuel rewards, customers receive $.05 per gallon up to 15 gallons for every $50 they spend in the store. There is no limit to the amount they can save, but the rewards do expire at the end of the month they receive the rewards in plus two months.

Tactics:
Make sure that you have both a good fuel provider and a good point of sale provider. It is inevitable that there will have to be some settings tweaks in order to implement the fuel reward program, and having a good relationship will help ease the problem. If you don’t have an on-site fuel center, find a local gas station that you trust to partner with.

  1. Analyze your competition.
    The impact of a fuel reward program will vary significantly from town to town. If other stores already offer a fuel program, adding your own may help to retain your customer base, but might not help you attract more.

  2. Start spreading the word.
    Use a variety of mediums to let people know about your new program. We leverage our weekly ad, in-store signage, a weekly e-blast, and social media to promote.

  3. Make launch day an event.
    We were able to work with our fuel provider to promote the event. They also agreed to cover the cost so we could discount the gas to $1.99 per gallon. Offering a big promotion really helped us get the word out. 

Pro Tips:
When we first started, we didn’t anticipate that the program would be quite as involved as it turned out to be. This was especially true when we started expanding the fuel rewards to our other stores. Every store, even those in a chain, have slightly different pump interfaces. You can’t go into this initiative thinking you are going to have a cookie cutter solution.


Hold plenty of training sessions to make sure that your store employees know how to communicate with customers about the program. Little actions, like having cashiers circle the fuel rewards on the receipt and explain how to redeem the rewards, can do more to promote the rewards than all of the in-store signage.
Get people talking. We feature short stories of customers saving money at the pump in our ads. This also encourages those customers to share their experience on their social channels.


Keep your bonus reward offers simple. We have found that, if we ask customers to buy items from multiple departments in order to get the bonus, they are much less likely to take advantage of the offer. But, if we offer, for example, $0.10 rewards for $25 in meat, it is usually very successful.

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