Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / Turning Left or Right: A Q&A with Parkland on Creating Customer Loyalty in the Retail Fuel Space
Transcript
- 0:05Mark Johnson: Good afternoon and good morning.
- 0:06Mark Johnson: It's Mark Johnson from Loyalty 360.
- 0:08Mark Johnson: Hope everyone's happy, safe and well.
- 0:09Mark Johnson: I want to welcome you back to another edition of our Leaders in Customer Loyalty series and this series we speak with leading brands about what they are seeing on the front lines of customer channel and brand loyalty.
- 0:19Mark Johnson: Today we have the pleasure of speaking with Derek Weidl, the director of loyalty at Parkland.
- 0:24Mark Johnson: How are you, Derek?
- 0:24Mark Johnson: Absolutely.
- 0:27Mark Johnson: Thank you very much for taking the time to talk to us today.
- 0:29Mark Johnson: First off, we'd like to start these on a personal level Get to know the individual speaking with a little bit more, understand kind of their current role within the organization, maybe a little backstory as well of a previous role if you had that maybe that were applicable.
- 0:41Mark Johnson: And then also a fun fact, a passion may have outside of work.
- 0:45Derek Weidl: Alright, sounds good.
- 0:45Derek Weidl: So I'm the director of loyalty programs at Parkland.
- 0:49Derek Weidl: I've only been around since September so I'm you know I'm kind of a veteran at this point after nine months in but, you know, still learning the business quite a bit.
- 0:58Derek Weidl: I came from M and M Food Market, which is a frozen food retailer in Canada with over 300 different locations there where I ran different you know digital marketing, e-commerce and loyalty leadership roles there.
- 1:12Derek Weidl: But you know I've done a lot of different things from a consumer marketing perspective and retail and non-profit, the agency side as well, and including documentary broadcasts, which is a little bit of a you know kind of detour for me, but you know, formed my storytelling as well.
- 1:30Derek Weidl: So really love retail and been in it for a bit of time.
- 1:33Derek Weidl: My team at Parkland is responsible for loyalty across the business in Canada, US and international, with a big focus in the Canadian market with the Journey Rewards program, and so I'm sure we'll get into that quite a bit over the next little while.
- 1:51Derek Weidl: But fun fact about myself I'm a very even though I'm based in Canada kind of near Toronto, I'm a very big college football fan, specifically Michigan Wolverines.
- 2:02Derek Weidl: I know you're in Cincinnati so I'm not sure how you react to that, mark, but I bleed me in Blue.
- 2:08Derek Weidl: You know my dad had season tickets growing up.
- 2:11Derek Weidl: I go to multiple games all the time, love the tailgating, all that kind of thing you know into recruiting all that stuff.
- 2:17Derek Weidl: So that's my passion outside of work.
- 2:20Mark Johnson: That's good.
- 2:20Mark Johnson: I'm not an Ohio State fan, actually Good we can continue then.
- 2:28Mark Johnson: One daughter, my next daughter she's pretty much a freak athlete.
- 2:31Mark Johnson: She wants to go to Michigan to run tracks.
- 2:33Mark Johnson: So we'll see.
- 2:34Mark Johnson: They've been to many camps up there swimming camps, soccer camps so I definitely like Michigan over Ohio State.
- 2:41Mark Johnson: Alright, we're all good then.
- 2:42Mark Johnson: Yeah, good, Perfect.
- 2:44Mark Johnson: So for Parkland for those who may not know, you guys kind of a very unique entity Can you give us a short history of what you guys do, how you do it and who you do it with?
- 2:55Derek Weidl: So Parkland is a leading convenience and fuel marketer and across 25 different countries, but it started off very humbly and a single gas station in Alberta and you know it's mostly focused on retail.
- 3:10Derek Weidl: So there's about 3,500 retail locations across all those markets, with the biggest, you know we're serving about a million customers a day across all those locations, so you know it's quite a big volume and frequency as part of that business and the business takes different shapes and forms across the different markets as well.
- 3:33Derek Weidl: You know our biggest focus from a loyalty perspective is in Canada.
- 3:37Derek Weidl: So, like we operate under the fuel brands of Chevron, pioneer, fast Gas and Ultramar in Canada, from a journey rewards perspective, we also operate under ESO that's another brand in Canada, but there's a whole mix of them in the US and mostly under the soul brand and international.
- 3:59Derek Weidl: There's a couple other brands we work with too, but you know we're serving lots of customers every day.
- 4:07Derek Weidl: It's a fast growing business that's been largely through acquisitions and partnerships and deals that you know started from that single gas station in Alberta and now reaching to that 3,500 plus retail location.
- 4:22Derek Weidl: So it's a really good Canadian success story that's grown internationally.
- 4:26Mark Johnson: Okay, excellent.
- 4:27Mark Johnson: When you look at customer loyalty, I know you guys have a very successful customer loyalty program, award winning.
- 4:34Mark Johnson: You know when you look at the program and how does the program work, how do members engage with it, you know what benefits and you know how to keep it current.
- 4:42Derek Weidl: Yeah, so it's certainly a field focus first program, but that's not the only thing we're trying to accomplish.
- 4:48Derek Weidl: But that's the hook for customers and it works quite differently than your typical earn and burn program.
- 4:54Derek Weidl: There are points you're acquiring, but that points are more of a tracker for your milestones within a journey.
- 5:00Derek Weidl: So we operate under what we call like a 300 point cycle.
- 5:04Derek Weidl: So every liter you pump you get a point, and every dollar you spend in the C store gets you two points.
- 5:11Derek Weidl: And as you go along to that 300 point end state, at that 300 point mark you get seven cents per liter off your fill.
- 5:20Derek Weidl: So that's the hook of the program.
- 5:22Derek Weidl: Along that journey to the 300 points there are a couple of different free unlocks at the 75 and 150 point levels.
- 5:29Derek Weidl: So that gives you opportunities to select free chocolate, bar, water, chips or maybe an additional two cents off per liter in your next fill.
- 5:41Derek Weidl: We're also introducing other brands in there too, because we recently purchased Eminem Food Market last year.
- 5:46Derek Weidl: So there's frozen food offerings to carbon credits, those types of things and those the 75 and 150 levels really about engaging customers in a kind of micro redemption fashion Along that journey to the real hook that the customer has at the seven cents per liter discount at the 300 point level and those micro-dention opportunities are really about driving customers into the C store and we kind of really look at what our program is trying to do from two different lenses.
- 6:17Derek Weidl: Is fuel stations price and location are really important, and then loyalty is about making you turn left instead of right to the gas stations that you're making a choice on, and the micro conversion opportunities is once we got you at that gas station, can we get you then to move another extra 20 feet into the C store as well?
- 6:36Derek Weidl: So that's fundamentally what we're trying to accomplish as a loyalty program.
- 6:41Mark Johnson: Okay, Can you talk about one of the things I find interesting with the C store?
- 6:45Mark Johnson: You know the front court, the back court, how that works, how the fuel may not necessarily match up with kind of the merchant locations.
- 6:53Mark Johnson: It's kind of interesting how that works.
- 6:55Mark Johnson: We'd love to hear more about that, if you don't mind.
- 6:57Mark Johnson: Yeah.
- 6:58Derek Weidl: I'll start off.
- 6:58Derek Weidl: It's a very complicated business with a lot of complexities of brands and relationships and you know dealer models versus corporate or owned models and all those kinds of things and as a result it plays a lot of complications into the loyalty program and how that gets executed with our customers.
- 7:15Derek Weidl: We talk about fore court versus back court.
- 7:18Derek Weidl: Fore courts, you know, referring really to the, the fuel part of the of the location itself, right, and back court, referring to the C store and any of the other ancillary you know retail opportunities there too, and so you know the, the fore court, in a lot of cases could be branded differently than how the back courts branded and some you know companies have that all aligned together and it's there's just a considerable web of you know, different relationships and business models going on.
- 7:49Derek Weidl: That that kind of creates a lot of complexities around what seems like it should be a simple thing.
- 7:54Mark Johnson: Okay, and do community stores have high brand loyalty?
- 7:57Mark Johnson: You talked about making getting then able to make that right turn versus the left turn, or is fuel based more on price?
- 8:03Mark Johnson: So I know in the past we've spoken with people where people could be irrational right, they'll drive 15 miles to get that 10 cent discount.
- 8:11Mark Johnson: They don't realize that they they spent more than that.
- 8:13Mark Johnson: You know going through it.
- 8:16Derek Weidl: Yeah, it's, it's fine.
- 8:17Derek Weidl: It's a mix of rational and irrational behavior, like you described.
- 8:20Derek Weidl: Right, because a lot of the you know drivers around you know making a choice on fuel is certainly around price and location, which are pretty rational things to do.
- 8:29Derek Weidl: The way it becomes irrational is the understanding of the you know sometimes on the discounts of these things, right, so you might spend more money, you know, driving to a different location or waiting in line and idling than the difference in the in the price or the discount you're getting through the loyalty program.
- 8:45Derek Weidl: But people do respond to that and so you know we need to always balance and providing the right value to that customer, along with, you know, making sure that the program's profitable.
- 8:56Derek Weidl: So that's always a tricky balance on a space where margins super tight, like you're talking pennies all the times that you're kind of fighting it out for right.
- 9:06Derek Weidl: So you know, from a brand loyalty perspective, I mean it depends on the customers.
- 9:10Derek Weidl: We certainly see that.
- 9:12Derek Weidl: You know our pioneer brand is understood, as you know, usually a cheaper alternative than something like Chevron, which is another one of the brands we operate, which is understood as more of a premium, and you get different customers there too.
- 9:25Derek Weidl: From a C store perspective, the brand I haven't mentioned, which is actually really important for our business, is on the run.
- 9:30Derek Weidl: That you know we have the rights to in Canada and the US, that we're rolling out across all those nations or across those different locations.
- 9:39Derek Weidl: On the C store side of things and how Canadians it's a bit different than what it is in the US too.
- 9:49Derek Weidl: Like you see, a broader mix of larger variety of the types of sea stores, from holes in the walls to real destination spots where you don't see that same destination spot to the same degree in Canada.
- 10:04Derek Weidl: I think that's changing over time too.
- 10:05Derek Weidl: So I'd say the consumers are loyal to the brands in different ways in the different regions as well.
- 10:13Mark Johnson: Okay, when you look at the customers of Parkland, you have a diverse offering in a program that addresses that.
- 10:21Mark Johnson: Do they have discerning traits?
- 10:23Mark Johnson: There's some unignificance to them, or what do they look like as customers?
- 10:28Derek Weidl: Yeah, I'd say the typical way, as a marketer, you might look at customers.
- 10:35Derek Weidl: We certainly have some segments of customers that we prefer, but realistically, drivers are who we're looking at for the program from a general perspective, like anyone who's driving, this program can work for for sure.
- 10:52Derek Weidl: And the interesting thing about the program is we're not creating demand, we're trying to drive them to choose to have their set demands spent with us as opposed to others.
- 11:05Derek Weidl: So it's interesting from that perspective.
- 11:08Derek Weidl: I think some of the customer traits that are different from other industries is the frequency that we have touch points with them.
- 11:15Derek Weidl: Our average active customers shopping, interacting with the program weekly for the most part, and so your heavy users are doing multiple times a week.
- 11:28Derek Weidl: So it's a high frequency business and our customers are more frequent than your typical non-loyalty customers as well, and they're spending more and filling up more.
- 11:38Derek Weidl: So all the types of things you want to see from a loyalty customer.
- 11:42Derek Weidl: But we're spread pretty wide on the types of demographics and psychographics of these customers, for sure, from the program perspective, and we're trying to diversify that with your partnerships as well.
- 11:57Derek Weidl: So we have our key partnership in CIBC, which is a major bank in Canada, as our launch partner has been our oldest partner and really important strategic partner for us.
- 12:11Derek Weidl: We are close to launching AeroPlan in the coming months as well.
- 12:17Derek Weidl: Partnership with AeroPlan, which is the largest airline in Canada and largest airline program in Canada loyalty program in Canada as well.
- 12:27Derek Weidl: That's going to bring in a whole different set of customers that are a little bit more on our higher end and very sophisticated from a loyalty perspective as well.
- 12:36Derek Weidl: So it's partnerships and is helping that diversity of the customers too.
- 12:42Mark Johnson: Okay, when you look at partnerships, that's a pretty significant area of interest for Loyalty 360.
- 12:47Mark Johnson: We actually had a member or only brand meeting this week to talk about partnerships what's working, what's not working.
- 12:52Mark Johnson: They can stress the gamut from just buying a series of points from AeroPlan or MGM or whomever, or they can be completely integrated.
- 13:01Mark Johnson: I think most fuel offerings tend to be more integrated just because of the regulatory piece and the payment processing piece and just some of the complexities there.
- 13:10Mark Johnson: How do you look at partnerships from a parking perspective?
- 13:15Mark Johnson: How do you get them to work, especially as the whole landscape for partnership seems to be changing?
- 13:20Mark Johnson: A few partnerships, more involved partnerships what are you saying?
- 13:26Derek Weidl: For us.
- 13:27Derek Weidl: We're in a growth state still, so we've been around for four years but we're still adding a lot of members and we're still in a growth mode.
- 13:36Derek Weidl: So partnerships for us one are very strategic.
- 13:41Derek Weidl: We're being thoughtful about who we're partnering with and how that brings credibility and equity to our brand, which is a newer brand in the loyalty space.
- 13:51Derek Weidl: So having brands like CIBC, which is the top five bank in Canada, and AeroPlan, which is one of the biggest programs out there in Canada, canada being one of the more dynamic loyalty spaces out there in general brings a lot of credibility to our brand.
- 14:12Derek Weidl: Journey rewards as well.
- 14:14Derek Weidl: So it's certainly brand equity, certainly member acquisition and growth.
- 14:21Derek Weidl: Those are really key pieces to our partnership strategy.
- 14:24Derek Weidl: It's making sure that we're giving extra value to our partners as well as making sure our partners are getting a lot of value of the program too, which is easy to say but difficult to execute on, of course.
- 14:37Derek Weidl: And our program design lends itself well to having multiple large partners because we can be pretty distinct in the offering between the partners.
- 14:49Derek Weidl: So with CIBC we have an everyday discount of three cents off per liter on every fill.
- 14:58Derek Weidl: We're not public yet with the details on the AeroPlan integration, but it's going to be an integrated approach where airplane customers are going to participate in the journey program to get some Aeroplan benefits.
- 15:11Derek Weidl: It's not a straight currency swap, right, and that's because of the structure of our program allows for that type of activity, which is great for us and great for our partners because they can differentiate their offering.
- 15:24Derek Weidl: But also it makes the customer have to actually participate in the program actively and understand it and therefore it become more engaged in our program and engaged with our brands and allows us to help manage the behavior that we're hoping to see out of the program too.
- 15:41Derek Weidl: So there's a couple of different pieces there.
- 15:44Derek Weidl: To summarize, it's the acquisition, the equity, but also leveraging the design of the program to really get the most of these partnerships and hope they get a lot of us too.
- 15:56Mark Johnson: OK, great, a little bit.
- 16:00Mark Johnson: Your customers, right, how you look at them.
- 16:04Mark Johnson: Do they give you feedback about the experiences, the voice of customer, things that you may enhance, things that they're looking for with regard to experiences, the service level or the program itself?
- 16:16Derek Weidl: Yeah, absolutely.
- 16:17Derek Weidl: We get that from a number of different sources.
- 16:19Derek Weidl: We have our own call center set up that we're constantly monitoring what type of information whether from trends to bugs and those types of things to solve on those experiences, but also what are things that they're appreciating and liking too.
- 16:36Derek Weidl: We do get some positive calls every now and then on the call center front, which is always encouraging, and, of course, using social media is a good listening spot for us to understand what customers are reacting to.
- 16:48Derek Weidl: And then at the operator level too, is really critical for us from a voice of customer perspective, because the program lives and dies with that in-person experience at the pump and at the backcourt.
- 17:02Derek Weidl: This program, by definition, has to have a physical component, like you're driving your car and you're filling up physically at these stations.
- 17:16Derek Weidl: You can't digitize that experience.
- 17:19Derek Weidl: So there's always going to be that in-person moment where the program lives and dies.
- 17:24Derek Weidl: And our operators are a great funnel for a lot of that feedback from the customers, because they're going to hear it, they're going to get and they're interacting with the customers.
- 17:36Derek Weidl: I think our challenge is, of course, we're a field-based program or a C-store program.
- 17:43Derek Weidl: Field-based program that you have a lot of kids working these jobs.
- 17:49Derek Weidl: It's a lot of high turnover, so informing and training those people to interact properly with those customers and take the feedback we need and funneling that up is very difficult.
- 18:01Derek Weidl: But at the same time a lot of what we've received from customers has directly impacted changes we've made in the program to allow customers to choose when they use their discounts, to what kind of offers we put into at the 75 and 150 point freebie levels.
- 18:21Derek Weidl: We just did a big app redesign that was pretty extensive, that the customer feedback over time fed into that.
- 18:32Derek Weidl: Of course we brought to user testing too and did research on all those things as well.
- 18:36Derek Weidl: This is only going to work if the customers like it.
- 18:39Derek Weidl: So we need to ensure that we're constantly listening and we have a growing muscle and how we cross-functionally come together to look at all the feedback we're seeing from all these different channels and feed that into our development roadmap and program roadmap too.
- 18:56Mark Johnson: Okay, what's the biggest challenge you face in your role?
- 19:00Mark Johnson: What keeps you up at night?
- 19:04Derek Weidl: I think it's on two fronts.
- 19:05Derek Weidl: I talked a bit about the challenge at the operator level, that it's the biggest opportunity, but it's really challenging for us in a head office space to be impacting to the degree we want to that customer and human interaction that happens.
- 19:23Derek Weidl: You have 19-year-olds that you know may show up on Monday and may be done with that job on Friday, right, and so keeping them trained and informed in the program, especially with, you know, different business models where you have dealers that you know have a big range of interest and understanding of the program themselves and relying on them to train up to those, you know that staff, it's a challenge, it's a it's a it's an ongoing challenge to break through and make sure they're using the right messages and understanding.
- 19:58Derek Weidl: You know how important that customer interaction is for the program.
- 20:03Derek Weidl: So that that's that's one that keeps me up at night.
- 20:07Derek Weidl: I think the other one is how are we constantly, you know, evaluating, understanding the right messages to send to consumers and what's what's driving value for them?
- 20:17Derek Weidl: That also equals value for us as a program.
- 20:20Derek Weidl: So what are the right customer touch points, what's the right message, what's the right offer, how we do this at scale, how do we get more and more personalized.
- 20:28Derek Weidl: You know all the things all like marketers and loyalty.
- 20:31Derek Weidl: People are sweating Like, and it's all you know, but both of those things are sent around how we interact with our customers, right?
- 20:39Derek Weidl: So fundamentally, it's our customers that keep me up at night.
- 20:42Derek Weidl: I just hadn't put it together till now that those are both the same thing and you know.
- 20:47Derek Weidl: So.
- 20:47Derek Weidl: It's all the different touch points with the customers fundamentally.
- 20:50Mark Johnson: Okay, are there programs you admire from a customer loyalty perspective?
- 20:54Mark Johnson: Customer, you know programs that you're loyal to and if so, what are they?
- 20:59Mark Johnson: Who are they and why are you loyal to them?
- 21:02Derek Weidl: Yeah, it's interesting.
- 21:04Derek Weidl: You know, up in Canada there's pretty dynamic loyalty space.
- 21:08Derek Weidl: You know there's some that have been around for a long time.
- 21:11Derek Weidl: So you know PC optimum is one you're always kind of measuring yourself towards.
- 21:16Derek Weidl: For those who aren't familiar, it's you know LaBla's grocery chain, along with shoppers, drug mart, the pharmacy.
- 21:24Derek Weidl: They had two massive programs and then LaBla's bought them and combined it all together and it's a massive, massive program that you know there's huge resources behind it and so I mean that's a space you're always wanting to, you know, pay attention to and understand what they're up to, and one that almost everyone is interacting with because so many of the retail spaces are attached to that program.
- 21:49Derek Weidl: So you know it's kind of hard to avoid that one and they've done a great job and continue to like, develop up that program.
- 21:57Derek Weidl: You know, interact with their customers and you know kind of you know another high frequency type of situation with.
- 22:08Derek Weidl: You know find different ways and touch points to to interact with you and get you to.
- 22:13Derek Weidl: You know predict what you want and when you want it and how you and best ways to hook you into that McDonald's ones.
- 22:23Derek Weidl: We we talked, we have chat, ongoing chat on McDonald's and looking at you know the different and that's has some similarities to us and where they have like different point levels to your spending points instead of tracking points.
- 22:36Derek Weidl: But you know we think we have there's a lot of similarities in those or a lot of things that we could leverage from there to introduce into our program.
- 22:44Derek Weidl: So we pay attention to that and I'd be remiss if I didn't talk about, you know, m&m Food Market in Canada and an interesting loyalty program there that's very different than most of the ones I've just mentioned.
- 22:55Derek Weidl: You know, partially because I come from that space.
- 22:58Derek Weidl: But I also find it like very unique in the marketplace too and that it fun.
- 23:03Derek Weidl: It functions a little bit more like a membership program in that it's really like over 95% of the transactions happening in those locations are with the member account, like a loyalty member account.
- 23:18Derek Weidl: So like the amount of data is incredible, the the way the program's woven into the DNA of the business, like you don't struggle getting franchise partners to participate in the program.
- 23:31Derek Weidl: It's like it's as straightforward as handing out a receipt to them, like it's just part of operating.
- 23:37Derek Weidl: So I think like the kind of DNA of loyalty within M&M I find super fascinating and you know want to find ways to replicate that at Parkland through the Journey Rewards program.
- 23:49Mark Johnson: Okay, excellent.
- 23:50Mark Johnson: And last question you know what can Loyalty 360 do to help you and your team in your customer loyalty journey?
- 23:56Derek Weidl: You know I think industry best practices, like learning how other programs are doing different things and being innovative.
- 24:05Derek Weidl: You know we're all trying to stand out right and we're all trying to figure out how to break through the noise.
- 24:12Derek Weidl: There's never been more loyalty programs, you know, out there and so you know customers can participate in probably only so many and and or be active and engaged in it in only so many different ways.
- 24:24Derek Weidl: So you know what are, what are what's what's?
- 24:27Derek Weidl: What are people having success on?
- 24:29Derek Weidl: What are some of the benchmarks and how does that?
- 24:32Derek Weidl: How do we apply those to our business and think about that different way to make that stand out to you know what, at the end of the day, like we're, we're fueling convenience store business, you know, as fuel's a grudge purchase right, so, like you know, no, you know we're not going to win with, you know, you know, without being like really precise and creating a value proposition to the customer.
- 24:57Derek Weidl: So we got to get creative and making that team less grudge.
- 25:03Mark Johnson: Like All right, grudge purchase and moving away from being a grudge purchase, that's quite interesting.
- 25:12Derek Weidl: We won't go all the way there.
- 25:13Derek Weidl: We just need to make the less painful, as I think is the goal there.
- 25:17Mark Johnson: Okay, good Well, Derek, thank you very much for taking the time to talk to us today.
- 25:21Mark Johnson: Very interesting to hear a little bit more about you and also your.
- 25:25Mark Johnson: You know interesting program Parkland and kind of interesting to hear what keeps you up at night as well.
- 25:31Mark Johnson: So thank you very much for taking the time to share with us today.
- 25:35Derek Weidl: Very, very appreciate it.
- 25:37Derek Weidl: Thanks for having the having me on and look forward to hearing the other guests you have on over the time.
- 25:43Mark Johnson: Excellent.
- 25:43Mark Johnson: Thank you everyone as well for listening.
- 25:46Mark Johnson: Make sure you join us for another edition of our leaders in customer loyalty series coming up soon.
- 25:49Mark Johnson: Have a wonderful day.