Even as more retailers dropped out of the Plenti multi-merchant loyalty program this month, the faltering American Express program does not represent a death blow for such collaborations.
Plenti's mistake may have been its attempt to suit every industry that it could handle, with participants selling food, clothing, gas and other products. By design, no one merchant was highlighted over any other.
Dallas, Texas-based Excentus is taking a different approach in Fuel Rewards, a multi-merchant loyalty program that funnels all rewards to purchases at Shell gas stations.
The attraction of cheaper gasoline has resulted in Excentus enrolling 12 million U.S. consumers who saved $1 billion in fuel costs overall.
"Gas discounts tend to be particularly attractive rewards programs," said Gil Luria, director of research for equity capital markets at D.A. Davidson & Co. "Grocery chains such as Kroger’s and Safeway have been leveraging them for several years as their primary loyalty program."
Gas is a frequent recurring expenditure for most households, Luria said. "Other cross-brand rewards programs tend to be less successful, likely because of the differences in shopping behavior within the target consumer group," he added.
What works for Fuel Rewards likely has played against Plenti and other multi-merchant arrangements that have had varying degrees of success. American Express says it will continue with the Plenti program, but acknowledged it was in discussions with merchant participants regarding the program's future.
Consumers like to earn and redeem points in the easiest fashion possible, and the link between Plenti and other merchant loyalty accounts was not always clear. Plus, Plenti had exclusivity rights for each retail sector — if one merchant from a particular category signed up, its competitors got locked out. Fuel Rewards simply has Shell gas stations as its foundation and sole fuel provider, and opens the program to all other retailers and restaurants.
"Plenti got kind of messy on the execution side," said Brian Riley, director of card services for Mercator Advisory Group. Riley said he carries both a Fuel Rewards card and a Plenti card, and he has noticed significant differences.
"I could not get the Plenti card to work correctly on occasion, and I have points earned that I cannot get at," Riley said. "Under American Express, I expected it to be a very strong program, but for whatever reasons, it just did not have good execution at the point of sale."
Fuel Rewards launched in 2012 as a card program, featuring a Fuel Rewards card used to authenticate membership and lower the cost at the pump based on points earned. After seeing the pump adjust the price, a member would then insert a payment card to initiate the transaction.
It still operates in much the same manner, though Excentus has developed an "Alt ID" number to key in at the pump as an alternative to swiping a card.
Excentus is eager to expand options at the pump with its partners, particularly Shell, which has its own portfolio of cards, said Jeffrey Hassman, chief marketing officer of Excentus.
"We are always trying to make it easier for customers to redeem, and that is the kind of thing that requires Shell and us to work together in developing payment methods," Hassman said.
ExxonMobil has its own prominent loyalty program in SpeedPass, which recently launched a new app for loyalty and payments. ExxonMobil remains a part of the Amex Plenti program, but acknowledged early on that incorporating it into the Mobil network was a complicated process.
Excentus wants to avoid any integration problems and wants to consider contactless and mobile payment if such mechanisms appeal to consumers. But the program's biggest asset is the buy-in of its fuel partner.
"Having Shell in your market as the dominant player really makes the program work well," Mercator's Riley said. "At every Shell station, the pump indicates what to do and makes it very easy for a Fuel Rewards member … It's very clever, and they have enough offers at the merchant locations to make it interesting and to make you want to keep using it."
Merchant locations include the Rewards Network of restaurants, T-Mobile, Jiffy Lube, and Giant, Hy-Vee, Country Mart and Stop-and-Shop grocery chains.
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Corrected January 17, 2018 at 12:55PM: A previous version of this article included an incorrect title for Jeffrey Hassman.