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Shell1 a leading international energy company with expertise across the entire oil and gas value chain, has an extensive retail network. They hold the distinction of being the world's number one retailer with over 44,0002 stations in more than 75 countries.
These stations serve an impressive 30 million customers daily, processing a staggering 11 billion transactions annually. The company leverages a strong digital presence with its app reaching 700 million smartphone users across a global footprint spanning 30 countries. Moreover, Shell boasts 16 million active loyalty card users, and it's all thanks to its effective enterprise loyalty.
An enterprise like Shell with an ever-increasing customer base thrives on generating customer loyalty through its brand value3. As a result, Shell maintains a leading position4 in the oil and gas industry, both in terms of brand value and revenue. Take its Shell Go+ loyalty program as an example.
Launched on their app, and available to every Shell consumer, this mobile app lets customers earn points on purchases and redeem them for exciting rewards like vouchers, special offers, and merchandise.
As a result, the initiative Shell Go+ reached a milestone with 1 million5 registered customers. Moreover, to mark this milestone, Shell gave the members double points on all fuel purchases at participating stations.
It's like a double win for Shell. Not only did they introduce exciting deals, and offers to entice the customers to participate, but rolled out more rewards to the members for staying loyal to the brand.
What is an enterprise loyalty program?
An enterprise loyalty program is a strategic approach organizations use to build strong, long-term relationships with their customers. It goes beyond traditional consumer programs by focusing on business-to-business (B2B) interactions.
Knowing that loyal customers are key to business success, many enterprises have shifted their focus on improving their customer experience, and their journey along with the brands. Moreover, Studies show that even a small increase in customer retention can lead to significant profit gains. Let us quantify the benefits.
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A statistical study on the impact of a well-woven enterprise loyalty program:
- A study by
Freshworkshas revealed that higher customer retention translates to higher profits.
- A 5% increase in retention can boost profits by 25% to 95%.
- The same study showed that loyal customers tend to spend more and can be worth up to 10 times more than first-time customers. This means they contribute more to your company's overall value.
- According to
Gartner, the key to successful customer interactions is delivering value to your customers.
- According to a
PR Newswire report, 79% of consumers are more likely to do business with a brand because of its loyalty program.
- The same report revealed that up to 50% of consumers, a huge shift from 33% in 2019, want chance-to-win rewards included in the loyalty experience.
Companies are strategically moving from a generic loyalty program to one that prioritizes understanding and caters to individual customer needs and preferences. This translates into generating an enterprise loyalty program that is more personalized, relevant, engaging, and ultimately more satisfying. If done well, you the program is strategized well, you can benefit from:
- Increased customer retention by rewarding repeat business and encouraging customers to stick with your company.
- Boosts customer lifetime value and leads to increased revenue.
- Enhanced customer engagement that can incentivize deeper engagement, such as attending events or providing feedback.
Let us analyze how Fortune 500 are focusing on driving customer loyalty in the competitive landscape.
Case studies
Following are the two case studies by Shell and Target that will be used to understand the best practices.
1. Shell improved its revenue margin by more than 3 million euros by leveraging data loyalty
A company as vast as Shell runs quite a few loyalty programs to reach an impressive 30 million customers daily. There are several Shell loyalty programs, each with its own set of benefits and rewards. Some popular are:
- Shell Go+: This is Shell's most rewarding loyalty program that offers benefits and rewards with every visit to Shell, whether fueling up, taking a break, or getting a car tune-up. Members earn points with every visit, get free roadside assistance, enjoy exclusive perks from partners, and can pay with points or collect instant rewards.
- Shell V-Power Rewards: This program is focused on customers who fuel up with Shell V-Power premium fuel, offering bonus reward points, surprise rewards, ongoing discounts, bonus points, and birthday treats after hitting fuel volume milestones.
- Fuel Rewards: This is a free loyalty program that rewards members with cents-per-gallon savings at Shell. Members can save a certain amount on every fill-up with Platinum Status, Gold Status, or Silver Status. Rewards can be earned from everyday purchases and redeemed at participating Shell stations.
Challenge Shell faced while running a data-driven loyalty program
With so many loyalty program running altogether, what Shell needed was to analyze the loyalty data curated from the program to initiate a targeted initiative. Data is crucial for effective fuel pricing strategies. Shell aimed to utilize its customer loyalty data more efficiently by automating the analysis process, which was previously conducted manually for each individual site.
Solution Shell sought
So, an enterprise like Shell implemented a scalable and agile data layer solution. The solution was designed to easily add data and be replicated across all geographic markets through data standardization. It allowed users to easily and automatically create analysis map layers based on aggregated customer data.
This provided insights into the wider catchment area for each gas station, and whether the customer base was primarily road users or residents living near the site. The loyalty data can be viewed at any desired level of detail, from a single gas station to the entire country. The data got synchronized whenever changes occurred, giving pricing analysts a near real-time view with just one click. This helped them take timely action daily.
Impact: Every data counts
By automating and simplifying the manual and the time-consuming process of its loyalty data analysis, Shell was able to:
- Spend less time on data integration and shift its focus to analyzing the data and driving insights,
- Generate higher revenues with this solution. Shell was able to improve its revenue margin by more than 3 million euros in Germany alone in three months of implementation.
- Get the geo-dashboard support operations in 28 countries that can leverage this new functionality with its loyalty data.
Shell is now able to better understand its loyal customers' behavior within its network, thereby enabling the company to make quicker and more informed pricing decisions.
2. Target’s rebranded loyalty program Circle garners 100 million users and continues to expand
Another example of a data-driven loyalty program is Target’s Circle loyalty program. It is a free loyalty program that offers several benefits to members. Like,
- Automatic application of relevant discounts at checkout online, in the Target app, or in-stores,
- Earning 1% in Target Circle rewards on eligible purchases, which can be used toward future purchases,
- Access to exclusive deals and personalized Target Circle Bonuses based on shopping habits,
- A 5% birthday discount on a single purchase valid for 30 days after your birthday,
- The ability to cast votes for select local and national nonprofits to impact Target's charitable donations,
- Free trials and exclusive deals from Target Circle partners like Apple and Ulta Beauty.
The loyalty program was not only directed toward building loyalty, but it went beyond that. The program offered a variety of ways to save money, get personalized rewards, and make a positive impact. However, it also went ahead to building a community and offering a more engaging shopping experience. Let's analyze how they mastered the matter of loyalty.
Why launch Target Circle when RedCard was already there?
Simple answer: Target wanted to broaden its customer base and increase awareness of its running program. Their existing store card, REDcard, had a steady membership of around 23%.
However, the Target RedCard loyalty program was facing challenges due to its emphasis on exclusivity, particularly with the Target RedCard. Apart from the technical issue that hindered the users from using the card, the matter that many few could avail of RedCard created a division. As a result, the consumer base did not expand but rather stayed steady.
So, to salvage the stagnant pace, Target launched a new loyalty program, Target Circle on October 6th, 2019, to broaden its customer base. Target Circle aimed to attract non-REDcard users and offered a more personalized way to connect with customers and build loyalty.
The Target RedCard loyalty program benefits were revamped and rebranded under the Target Circle umbrella to streamline and enhance the loyalty offerings at Target. The Target RedCard debit and credit cards were transformed into the Target Circle Card. The program was designed to engage all Target guests, from enthusiasts to less-invested shoppers. So they offered:
- Personalized benefits such as a 1% discount every time they shop at Target.
- Customers to have a chance to have a voice on which charities their local store would support and provide personalized offers based on their shopping habits.
- An extra 5% off every purchase, extended return windows, and free two-day shipping on most items from Target's website.
- Sales, discounts and offers exclusively,
- Additional members-only perks like free Apple trial subscriptions throughout the year, with deals now being automatically applied at checkout for added convenience.
The changes aimed to provide a more seamless and rewarding shopping experience for Target customers. The introduction of the Circle loyalty program also aligned with the retailer's commitment to enhance customer relationships and deliver value and ease through its loyalty programs.
Results driven by Target
Target's loyalty program, Circle Rewards, has recorded a tremendous reach. It has strayed away from the traditional subscription-based loyalty models, like Amazon or Walmart. Nonetheless, Target Circle Rewards has:
- Reached over 100 million users as of May 2024. This is an increase from 80 million users in November 2023.
- Announced plans to expand the capabilities of the Circle Rewards program further.
- combined with in-store activities and merchandising to strengthen Target's brand and offer a tailored shopping experience for its members.
- Improved bond between program members and Target by delivering promotions through preferred channels.
- High conversion rates.
Knowing which tactics to opt for while designing an enterprise loyalty program is important. So, let’s learn the right way we can build a successful loyalty program.
How to build a successful enterprise loyalty program?
The following are the ways to build a successful enterprise loyalty program:
1. Lay the groundwork for success
- Define your program goals: Start by identifying what you want to achieve with your loyalty program. Is your primary aim to retain existing customers, drive higher purchase frequency, or encourage customer referrals? Clearly defined goals will guide every aspect of your program design.
- Understand your customers: Invest time in researching your customer base. Analyze their needs, preferences, and buying behaviors. This knowledge will help you tailor the program to resonate with your target audience and maximize its impact.
2. Craft an engaging program
- Choose the right rewards: Don't underestimate the power of compelling rewards. While discounts are always appreciated, consider offering a variety of rewards that cater to different customer segments. This could include exclusive product access, personalized offers, early access to sales, or tiered reward structures based on spending levels.
- Personalize the experience: Leverage technology to personalize the program experience. Recommend relevant rewards based on past purchases, offer birthday discounts or anniversary bonuses, and tailor communications based on customer preferences.
3. Embrace technology for optimization
- Utilize automation: Streamline program management by automating tasks like points calculation, reward redemption, and communication triggers. This frees up resources and ensures a smooth customer experience.
- Harness data analysis: Don't let valuable customer data sit unused. Utilize data analytics to gain insights into customer behavior within the program. This will help you optimize your reward strategy, identify areas for improvement, and ultimately, ensure the program delivers on its goals.
Loyalty programs are a powerful tool, but success hinges on best practices. Let's explore key strategies that we learned via the case studies employed by Fortune 500 companies to maximize program effectiveness.
Enterprise loyalty program best practices
Here are some best practices learned from Fortune 500 companies:
1. Like Shell, aim to:
- Offer multiple loyalty programs to cater to different customer segments. Shell runs several loyalty programs, each with its own set of benefits and rewards, to reach a wide range of customers. This allows them to tailor the program to specific customer needs and behaviors.
- Utilize customer data to drive insights and pricing decisions. Shell sought to better leverage its loyalty program data to inform targeted initiatives and fuel pricing strategies. By implementing a scalable data layer solution, Shell could gain insights into customer behavior, and data at any desired level of detail, from individual stations to entire countries, and get a near real-time view of data changes to enable timely pricing actions.
- Realize significant revenue gains from data-driven decisions by optimizing its loyalty data analysis, Shell was able to shift focus from data integration to driving insights. It not only improved revenue margins by over €3M in Germany alone in just 3 months but enabled geo-dashboard support operations in 28 countries to leverage the loyalty data.
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Key learning: Shell demonstrates how a data-driven approach to loyalty programs can lead to a better understanding of customer behavior and significant financial benefits. You can offer multiple tailored programs and use loyalty data insights to drive customer engagement and revenue growth.
2. Like Target, aim to:
- Broaden its customer base. Target launched Circle to attract non-REDcard users and offer a more personalized way to connect with customers beyond their existing RedCard loyalty program. Circle aimed to engage all Target guests, from enthusiasts to less-invested shoppers
- Offer a variety of benefits. Circle offers a range of benefits to appeal to different customer segments, such as the automatic application of relevant discounts at checkout, earning 1% in Target Circle rewards on eligible purchases, and much more to gain engagement.
- Streamline and enhance loyalty offerings. Target revamped and rebranded the RedCard benefits under the Circle umbrella to provide a more seamless and rewarding shopping experience. This included transforming the RedCard into the Circle Card
- Use data for personalization. Circle, like Shell, uses customer data to provide personalized offers and benefits based on shopping habits. This helps deliver a tailored experience for members.
- Focus on Customer Experience. Circle is combined with in-store activities and merchandising to strengthen Target's brand and offer a tailored shopping experience for members.
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Key learning: The key is to design an enterprise loyalty program that broadens the customer base means attracting new customers through targeted incentives and program accessibility.
Use customer data to tailor rewards and offerings that resonate with individual preferences. In addition to this, streamlining the whole program participation, and providing a tailored brand experience would foster stronger customer connections.
Conclusion
If seen from the lens of an enterprise, the crux of the enterprise loyalty program is pretty straightforward: it retains existing customers, encourages repeat business, and builds brand loyalty across various products and services.
However, only by going beyond the traditionalist approach can one enterprise easily drive customer engagement, increase customer retention, and ultimately boost overall revenue for the enterprise.
To take your loyalty game to the next level, we suggest collaborating with
Giift LMBS. Giift can help your enterprise loyalty programs by providing a comprehensive platform that enables businesses to effectively manage and enhance their loyalty initiatives. With LMBS, you can:
- Streamline the management of loyalty programs, including reward tracking, personalized offers, and program rules.
- Engage customers effectively by offering customizable rewards, real-time communication, and personalized recommendations. This leads to improved customer retention and increased spending.
- Gain insights into customer preferences and behaviors. This data-driven approach allows businesses to offer targeted offers, customized rewards, and relevant communication to enhance customer engagement and loyalty.
Giift LBMS makes managing a loyalty program a breeze. Keep your customers engaged, offer rewards that fit their needs, and grow your program along the way.
Citations
1. Shell Global. (n.d.). Shell Global. https://www.shell.com/
2. Shell. (2024, April 5). Statista. https://www.statista.com/topics/1560/shell/#topicOverview
3. Brand value of top oil and gas companies 2024 | Statista. (2024, April 3). Statista. https://www.statista.com/statistics/536946/brand-value-of-the-leading-oil-and-gas-companies-worldwide/
4. Top oil and gas companies by revenue 2023 | Statista. (2023, August 29). Statista. https://www.statista.com/statistics/272710/top-10-oil-and-gas-companies-worldwide-based-on-revenue/
5. Express Mobility Desk. (2021, December 17). Shell celebrates 1 million registered customers on its loyalty platform Shell Go+. Financial Express. https://www.financialexpress.com/business/express-mobility-shell-celebrates-1-million-customers-on-shell-go-plus-mobile-app-2382444/
Nagma Nasim
Nagma is a content writer who creates informative articles, blogs, & other engaging content. In her free time, you can find her immersed in academic papers, novels, or movie marathons.
