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CSNews Exclusive: BP Takes Price Rollback to the Next Level

NEW YORK – There may be other chains and fuel companies offering price rollback at the pump, and participating in Excentus Corp.'s fuelperks! program, but BP is the only one currently thinking beyond the present moment and creating a plan for brandwide deployment of price rollback technology across all branded locations -- allowing it to expand beyond partnerships to offer its own redemption programs.

"There is no national grocer to link up with -- everybody is regional," David VanWiggeren, BP Card marketing manager told CSNews Online in an exclusive interview. "It takes more than one partner to cover an area. We wanted the option of offering it without a partner, so we can enhance our branded card programs and do other promotional things we don't need a partner to do."

BP started planning in 2007 after seeing the success of Giant Eagle's fuelperks! program and hearing customers talk about it. The company launched an initiative to uncover the best way fuel marketers could participate in loyalty programs in the United States, VanWiggeren explained.

"It really started as a competitive response, and then we decided we could help our BP jobbers and customers in the field if we created redemption technology," he noted. "We realized if we could offer price rollback functionality, there was a lot we could do with that – through partnerships with grocers, and non-grocers, but also with our own branded credit card programs."

The oil company plans to enhance its branded credit card programs and offer new promotions, but also plans to take on new partners, both grocer and non-grocer.

VanWiggeren explained it as a "hub strategy using experts in the field to form alliance partnerships," the expert in the case of technology and loyalty being Excentus.
While the company is already partnered with grocers and using the technology, the new plan is for a long-term solution, said VanWiggeren, and BP is actually funding the development of it across the network.

"We are paying for the deployment at eligible sites, which is any location with three or more dispensers," he noted. "Those with only two have to fund it themselves, but the cost is only around $1,500."

Currently, the company has 94 percent of its branded locations signed up to receive BPs price rollback functionality, and is in the final stages of development and testing, he said. The plan is to install the software first and then rollout the new version of the BP Visa credit card and BP Card in two phases.

"We have begun the deployment process for 440 sites and the actual installs are starting in May and will run throughout the year," VanWiggeren told CSNews Online. "We have to visit every single site twice, and we have more than 8,000 signed up."

Croix Oil, based in Minnesota, which supplies 37 BP sites and operates four, is one of the pilot locations, and rolled out the price rollback technology May 31, 2009, in partnership with Rainbow Foods, a local grocery chain. The current promotion is 10 cents off a gallon of gasoline at BP for every $50 qualified purchase at Rainbow Foods, said Michele Smith, account manager at Croix Oil, who calls on all the BP sites.

"The price rollback has been awesome," she said. "You don't run across something you are excited about in the petroleum business that often, and this is so much fun to watch. I call on every store once a month, and when customers come in and ask how to use it, I go out to show them. When they see the price roll back on the pump you would think it's eight of their birthdays in just one moment. They are astounded by it. We even have customers who come into the store and hand the receipt to the cashier saying, 'look what I saved.'"

The company is taking the same approach with loyalty and price rollback as it does with its payment systems – using an electronic payment server (EPS) box at each site to direct transaction flows. This allows a jobber to select any EPS-certified point-of-sale (POS) system and when a customer swipes a card, the transaction goes directly to the EPS instead of the POS for processing, explained VanWiggeren.

"We let jobbers buy the POS they want and then let the POS vendor put the functionality in. The POS is a slave to our EPS box from a payment perspective, and we wanted to do the same thing with the price rollback technology," he said.

With the new technology, when a loyalty card is used, the information is sent to Excentus via the EPS to see how many cents-off rewards are on it. "The brains sit in the EPS and the POS just needs to use PCATS standard language to process the rewards," VanWiggeren explained.

The BP sites supplied by Croix Oil have seen increased traffic since they started offering the program, as well as new faces, which is "the biggest thing you could ever ask for," said Smith. "A customer may be used to another gas station, but then they come here to redeem their gas rewards and we get to 'wow' them, and then they never leave."

Plans for the Future
One of the biggest benefits of implementing the technology brandwide is the opportunity to go above and beyond partnerships with local grocers to give customers even more. BP plans to introduce a new cents-off-per-gallon reward card for use with the price rollback technology and capitalize on the growing gift card industry.

"We have a BP gift card today, and you wouldn't believe how many of those we sell," VanWiggeren told CSNews Online. "The gift card industry is growing and gas cards are a big part of that. Imagine someone giving you a reward card with 50 cents off per gallon. When you swipe it, it will act like a loyalty card with a one-time use and ask you if you want to redeem the reward. When you say 'yes' the price will roll back at the pump. We think the psychology behind that will be very powerful."

With the average fill up at 14 gallons, a 50 cent off reward card would save the consumer $7.50, and with distribution, the cost to BP would be around $9 per card, said VanWiggeren. There are also plans in the works to offer redemptions without using a card. Right now there is a fuel promotion for BP's Invigorate where customers who pump more than eight gallons of gas can take the receipt into the store for a free scratch off ticket to win free fuel for life.

"In the future we could do a scratch off to win 10 cents off per gallon, and give them a code to enter at the pump to activate the price rollback technology the next time they come," VanWiggeren explained.

These are a few examples of things BP can do with the technology without the need for alliance partnerships, but the company is not counting them out in the future.
"We still have a good mousetrap for bringing on alliance partners, and recently announced a partnership with Bi-Lo stores in Charlotte, N.C.," he noted. "You will see us announcing more markets and more partners in the future."

However right now, BP is the only major oil talking about offering its own promotional opportunities because it requires brandwide technology, VanWiggeren said.

"We wouldn't want someone to have a card in his or her hand that only works in Nashville, Tenn.," he explained. "Eventually, I believe other major oil companies will get there, but I think we have a good head start."

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