Building relationships

Multinational energy company operating in more than 20 emerging, fast-growing markets, predominantly under a wholesale and highly decentralized business model. Exposure to millions of customers everyday thanks to a large network of fueling stations and convenience stores. A global industry trend that is drifting profitability from wholesale to retail, for product margins to customer understanding. The right markets, the right assets, but the wrong culture. How to turn the tide?

 

The ambition

Lacking alignment and understanding on the need to transform the whole operating model which would involve changing the way the company deals, both from an organizational and business model perspective, with its retail spots, a customer loyalty program was proposed and accepted as the turning point to start moving in the right direction.

Starting from scratch, the objective was to build and launch a full-fledged, highly differentiating program in 2 countries within a period of 8 months, before moving on to the next wave of 8 markets in a more roll-out kind of manner.

This whole endeavor posed many different challenges that needed to be prioritized and addressed, to name a few: the definition of customer value – different across markets –, the conservation of the local ownership in combination with the required inputs from headquarters, the integration of different sources from a technology perspective, and the delivery of customer profitability as an EBITDA driver from a business perspective.

 

Addressing it

Considering the constraining elements of the operating environment, in order to produce the most impactful delivery, the program needed a stand-alone, all-encompassing organization, a “Glocal” relationship model, and a strong management layer.

Stand-alone. Treating and running the loyalty program as a business unit, and therefore arranging an organization to support it: content, marketing, analytics, operations, IT, etc.

All-encompassing. The bottom line is not about promotions or points but about creating a new concept of what a customer is, and turning all sides of the business towards it: POS systems and technology, field managers, business intelligence and AI, control, finance, etc.

“Glocal”. Local program contents and value proposition aimed at accompanying and promoting people’s lifestyles, plus global customer understanding to aggregate patterns and apply insightful actions.

Management. Mechanisms for program control at the point of sale.

 

Creating impact

15%-20% increase in revenues on year 1.

Program break-even in less than 1 year.

40%-50% increase in average basket size.

Half of total customer base (+1 million users) registered into the program on year 1, providing the company with sell-out and transactional data.

Customer database, integrated with the systems at transaction level for B2C channel management.