Certified Oil Exec Makes Business Case for Loyalty Programs

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Certified Oil Exec Makes Business Case for Loyalty Programs

COLUMBUS, Ohio -- Certified Oil Co.'s COO, Greg Ehrlich, recently discussed the business strategy and tactical details behind the retailer’s recent implementation of a new corporate loyalty program.

Speaking at the 2009 VeriFone Customer Forum in St. Petersburg, Fla., Ehrlich presented the topic in front of a large crowd of technology and operations executives from convenience store and retail petroleum companies.

The executive discussed the business case behind creating and rolling out a customer loyalty program, the opportunities presented by the rapid growth of smart phone and social networking technologies, and lessons learned and pitfalls to avoid.

The presentation coincides with the recent implementation of Certified Oil’s "Certified Savings" loyalty program. Ehrlich presented a detailed case study on the 18-month history of Certified Oil's development and rollout of this specific program. He shared insights into the successful six-month pilot test for the Certified Savings program, which was completed in May 2009, prompting the company to rollout the program to its core Columbus, Ohio, market. Currently, about 20 Certified stores offer the program, although this number is expected to grow to a total of 25 to 30 stores by yearend.

"Loyalty makes you think differently and think smarter about your business, your mission and your customers," said Ehrlich. "When properly designed and implemented, it has the potential to differentiate your consumer value proposition and provide your business with competitive advantages."

According to Ehrlich, there are four major areas companies should consider when implementing a customer loyalty program:

-- Loyalty is a service offering to build better relationships with new and future customers. Everyone wants to know what the specific return-on-investment (ROI) from loyalty is, but this is difficult to define and goes beyond straight, quantifiable measures.

-- Loyalty is a path, not a destination. It requires executive support, broad-based commitment, and patience.

-- Loyalty can be deployed relatively quickly without major cost or time outlays, or large space requirements for hardware. The loyalty program for Certified took 15 minutes to load the software at the store level and literally, within minutes, the company was able to offer its customers with points, discounts and rewards.

-- Loyalty can be an effective marketing tool and strategic market differentiator especially with the tough economic times upon us.

"Airlines and hotels have been employing loyalty programs for decades," Ehrlich said. "The development and evolution of the Internet over the past 10 years, coupled with business intelligence tools, has led a variety of major retailers to embark on loyalty programs. Given this, loyalty programs and technology have evolved to a point that enables entrepreneurial companies the size of Certified Oil to successfully play in this space."

CSNews first reported on Certified’s new loyalty program in the cover story of its March 30, 2009 issue. Certified Savings is a multi-level loyalty program. Level one includes product discounts and automatic entry into club programs, in which customers buy a designated quantity of a product —cups of coffee, for instance—with the next one being free. At this level, members are also rewarded with points on their purchases and redemption options that include gasoline discounts and free merchandise.

At level two (which also incorporates level one benefits), cardholders are provided the option of receiving two cents off per gallon of gasoline for enrolling their card for Automated Clearing House (ACH) payment.

At level three (which also includes level one benefits), cardholders are offered three cents off per gallon of gasoline for paying cash.

Founded by Carlyle Baker in Piqua, Ohio, in 1939, Certified Oil Co. is one of Ohio’s leading independent operators of convenience stores and retail fueling facilities. Today, Certified operates or supplies more than 140 locations in Ohio, West Virginia and Kentucky. Certified maintains its own proprietary "Certified" fuel brand and distributes fuels for Sunoco, Marathon, Valero and Clark.

Related News:

Certified Oil Offers Loyalty Program to Grocery Stores -- April 28, 2009

Change They Can Believe In -- March 30, 2009