Murphy’s Takes a Whrrl with Rewards Program
Murphy’s USA is testing a new rewards program with Whrrl,
a location-based service that enables consumers to earn points leading to a
wide variety of prizes — possibly even a digital coupon for $50 in free gas
— when they check in at the chain’s roughly 1,100 stations. According to a
press release, Whrrl is “a social loyalty program designed to close the
gap between a brand’s online social media presence and real-world physical
presence. Whrrl Society Rewards is the first program to tie together word-of-mouth
influence and real-world visits, rewarding people for motivating others to
visit a business.”
A ClickZ article on the test
questioned whether Whrrl would be a hit at Murphy’s, which operates over 1000
gas/c-store outlets in 21 states, many of which are connected
to Wal-Mart stores.
John Kim, VP of product management
and marketing for Pelago, the parent company of Whrrl, said, “We’ve found
a lot initial success with moms. And that demographic is actually one that
shops at the Targets and the Wal-Marts of the world. So it’s not really a stretch
for us to go after this segment, because it’s very relevant to the community
that we already have.”
Among the freebies that Whrrl users can win include
$1 coupons handed out daily as well as free soft drink and snack offers.
Mr.
Kim told ClickZ, “When you put out something as simple
as, ‘Hey, this is your chance to check-in and win $50 of free gas,’ it doesn’t
matter who you are talking to. They understand there’s a value proposition
here, and it’s going to be very clear to them. It’s not about social media. It’s
not about ‘sharing out.’”
Whrrl says it is different than other programs
on four counts: being prize-based; being viral, offering incentives based
on factors beyond just transactions; and providing retailers and brands with
the ability to set up their own societies to attract like-minded consumers.
“Traditional loyalty programs can create the wrong expectations with customers,
because discounts based on transactions don’t always lead to a deeper relationship,” Casey
Petersen, social media marketing manager for Murphy USA, said in a press release. “We
love our customers not only for their business, but positive word-of-mouth
and influence on others to try Murphy USA gas. Whrrl’s Society Rewards program
is the perfect way to reward them for their loyalty.”
Discussion Questions: What are your thoughts on the Murphy USA rewards program
test? What do you think the future of loyalty programs will look like?
“Check-in” type loyalty programs are likely to increase in importance as marketers become more confident in using game based marketing in its various forms (see previous RW discussion at http://bit.ly/d5v7Om).
One challenge for Murphy’s (and any other retailer considering a similar program) will be to avoid creating a walled garden. Going all the way back to AOL, people want their online services to connect. If Murphy’s supports Whrrl, why not also Foursquare and Gowalla, not to mention Twitter and Facebook’s upcoming “check-in” capabilities? Betting on a single, smaller service will only leave Murphy’s in a social cul-de-sac.
The social component is going to play a larger role for loyalty in the future, but the real driver for loyalty programs will continue to be the value to the consumer who is part of the program. You won’t talk about a program (at least positively) unless you are pleased with the perks of being a loyal customer.
Murphy’s loyalty program looks interesting and it sounds like Whrrl will be an added feature to help with WOM. The chance to win $50 in free gas is not a huge driver in my opinion. The lottery approach to loyalty is less effective than simple steps to earning rewards unless the lottery amount is substantial ($50 is not substantial). Why not offer consumers “$X” off their next fill-up for every “Y” visits (check-in’s) they make to Murphy’s. Or better, offer loyal customers an electronic coupon they can share (email or post to facebook) with their 10 closest friends.
Give loyal customers something to share and they will. Facebook and other online platforms just make it easier and faster than the old fashion face to face referral.
Geo-location programs tied in with the psychology of gaming continue to increase in popularity, and are helping drive traffic and create loyalty with certain retail brands. But it is VERY early in the process, and no one can declare that these types of programs are working.
That being said, one has to commend Murphy’s on their willingness to try something new, different and innovative in their marketing approach. Without this type of experimentation, companies will be left behind.
Kudos to Murphy’s for their forward thinking.
Like Tom Hank’s character in “Big” when it comes to marketing and these virtual societies “I don’t get it.” I fully understand the attraction of elements of the program such as check in and win a prize (who doesn’t like to win?). However, on that aspect alone to be successful the prize frequency would have to be greater than it likely is, so I gather being able to increase the level the customer is in the society provides the stickiness, i.e., the willingness to participate, even though I didn’t win a prize this time.
That being said, the issue will be the same as it is for all loyalty programs–does it move the needle? Do market baskets increase? Do transactions go up? Do we retain customer we would have lost?
There is no question, location-based social networking is exploding and retailers like Murphy’s are wise to try a low-impact approach to harness it. I agree with the previous comments about a lottery approach being less effective in loyalty efforts, but there’s a downside to offering rewards for check in’s: fraud.
Systems like Foursquare use your geolocation to determine initial venues to check in. However, once you have done your initial check in, you can check in at will from any location. While these geolocation systems are treated as a game, that really doesn’t matter, but once you add rewards to the mix, it creates temptation. Foursquare, which offers coupons through their platform to those who become “mayors,” are already seeing incidents of this: people writing programs to make themselves “mayors” of thousands of locales overnight. If you add in rewards, it’s important to take significant safeguards to ensure the rewards go to those intended.
Social media is today’s ‘over the fence conversation’. Word of mouth is and always will be the best form of loyalty communication. The program also places ownership more to the customer where the real ownership of loyalty lies in the first place.
Programs that continuously attempt to direct customer activity under the guise of so-called loyalty have and always will fail. Programs that offer the opportunity to allow the customer to share in the reward for what they are already doing are closer to the hoped-for results.
Customers own loyalty when they choose to make purchases with one retailer over another consistently when they have other choices. Retailers attempting to harness that elusive activity may do well. Caution is key.
Other forms fail when retailers believe they own loyalty. They never have, never will.
This is a way to “Tie” the consumer to your location. If you add some fun and a chance to win (lottery style) you have a winner. Consumers are looking for a reason to stop at a specific station. If there’s one convenience store on every corner you have to differentiate yourself. A loyalty program is a good idea.
Like others here, I give Murphy’s props for trying something new. But I have reservations about Whrrl’s success at Murphy’s. How Whrrl works (i.e., check-in, prizes of chance, recommendations, societies, etc.) is good for engaging a consumer over the long term. But I question whether c-store consumers want that type of long-term engagement, especially given that the primary consumer motivator in this channel is convenience. When refueling or stopping for cigs, soda and sweet ‘n salty snacks, most consumers want to get in and get on with their life (the average c-store transaction is 3-4 minutes).
Matching Whrrl’s engaging program with other retail chains that are focused more on long-term shopper engagement may achieve better mileage.
I’m sorry, but “convenience” stores are called that for a reason (one of the main attractions is being able to get in-and-out quickly) and I can’t see many compromising this principle for the sake of winning a thoroughly underwhelming $1/off coupon. Low–or at least competitive–prices and good service are the only prizes any retailer should offer, and they should be offered 100% of the time (no “check-in” required).
One of the possibilities that Foursquare and other location-based services offer is the ability to draw consumers in to the store for an incremental visit. I like the idea of posting promotions and offers in a public way prior to check-in and regardless of “mayorship” or other badges earned.
With this acquisition level established, there is a choice to offer some form of continuity or singular promotions. Murphy’s seems to have both elements and the Murphy’s representative slams points based programs in his comments. I’m a little confused on that point, but will do further research to unwind the program rules.
For the c-store industry, I would land on an ever changing set of offers that encourage people to stop in and discover what the deal of the day is. I’m not sure the accumulation of points is needed to make the offer attractive.
Agree with the panelists who advise that convenience store shoppers are in a very different need state than other venues. Loyalty programs have to provide instant value for convenience shoppers, and keep Murphy’s top of mind as their destination when it’s time to fill up. This could be a way to move Murphy’s closer to first choice for the convenience store stop. Kudos to them for working to engage their shoppers in a new way.
Murphy’s rewards program is a great forward thinking idea. I suggest they put more thought in the rewards/benefits piece. Now the challenge will be to get the word out and make people think they are receiving something of value. I do not think a $1.00 prize will do it.
Getting the word out should be easy with the various social and media outlets. Look how fast it happened when the NBA stars decided which teams they were joining.
Rewards programs as a whole seem to be underutilized. I believe retailers receive a benefit even for the concept.
This is a smart test for Murphy’s in that it is relatively low risk, versus going “all-in” with Foursquare or another LBS social media platform. It’s a classic “walk before you run” approach with very limited downside, particularly given the win versus earn proposition. There are not very many c-store loyalty success stories in the US!
In our view, the biggest issue with programs isn’t fraud, it’s one of creating entitlement. The gaming aspect gets away from that risk but the structure of using a 3rd party platform does create another one: if you can’t create the right hooks in terms of both opt-in and customer transactional insight, you are seriously limited in the ability to intelligently do relationship marketing and get not just the first incremental transaction, but the subsequent ones.