Leaders in Customer Loyalty, Powered by Loyalty360
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
Parkland traces its beginning back to a single retail location established in the 1970s in rural Alberta, Canada. For the next four and a half decades, in addition to establishing its own fuel station chain, the brand further grew through a series of acquisitions, including a number of retail fuel operations, a refinery in British Columbia, and most recently, a major frozen food retailer, M&M Food Market. Parkland Corporation has expanded across Canada and the United States, and into the Caribbean. The company now boasts over 4,000 global retail and commercial locations.
In Canada and the U.S., the company operates under the familiar field brands of Chevron, Pioneer, Fas Gas Plus, RaceTrac, Superpumper, Ultramar, and Esso. Internationally, Parkland operates mostly under the Sol brand. Additionally, Parkland has the rights to the On the Run brand in Canada and the U.S. The fuel distributor and retailer serves over one million customers with fuel, convenience store items, and refreshments every day.
Mark Johnson, CEO of Loyalty360, spoke with Derek Wiedl, Director of Loyalty at Parkland, about the brand’s Journie™ Rewards program, building customer loyalty in a space where drivers make choices based on fuel price and location, and the value of strategic partnerships ranging from banking to air travel.
Read the full interview on Loyalty360 here: https://loyalty360.org/content-gallery/in-depth-exclusives/turning-left-or-right-a-q-a-with-parkland-on-creating-customer-loyalty-in-the-retail-fuel-space
Good afternoon and good morning. It's Mark Johnson from Loyalty 360. Hope everyone's happy, safe and well. 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. Today we have the pleasure of speaking with Derek Weidl, the director of loyalty at Parkland. How are you, Derek? Absolutely. Thank you very much for taking the time to talk to us today. 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. And then also a fun fact, a passion may have outside of work.
Derek Weidl:Alright, sounds good. So I'm the director of loyalty programs at Parkland. 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. 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. 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. So really love retail and been in it for a bit of time. 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.
Derek 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. I know you're in Cincinnati so I'm not sure how you react to that, mark, but I bleed me in Blue. You know my dad had season tickets growing up. I go to multiple games all the time, love the tailgating, all that kind of thing you know into recruiting all that stuff. So that's my passion outside of work.
Mark Johnson:That's good. I'm not an Ohio State fan, actually Good we can continue then.
Mark Johnson:One daughter, my next daughter she's pretty much a freak athlete. She wants to go to Michigan to run tracks. So we'll see. They've been to many camps up there swimming camps, soccer camps so I definitely like Michigan over Ohio State. Alright, we're all good then. Yeah, good, Perfect. 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?
Derek 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.
Derek 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. You know our biggest focus from a loyalty perspective is in Canada. 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. There's a couple other brands we work with too, but you know we're serving lots of customers every day. 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. So it's a really good Canadian success story that's grown internationally.
Mark Johnson:Okay, excellent. When you look at customer loyalty, I know you guys have a very successful customer loyalty program, award winning. 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.
Derek Weidl:Yeah, so it's certainly a field focus first program, but that's not the only thing we're trying to accomplish. But that's the hook for customers and it works quite differently than your typical earn and burn program. There are points you're acquiring, but that points are more of a tracker for your milestones within a journey. So we operate under what we call like a 300 point cycle. So every liter you pump you get a point, and every dollar you spend in the C store gets you two points. 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. So that's the hook of the program. Along that journey to the 300 points there are a couple of different free unlocks at the 75 and 150 point levels. 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.
Derek Weidl:We're also introducing other brands in there too, because we recently purchased Eminem Food Market last year. 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. 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? So that's fundamentally what we're trying to accomplish as a loyalty program.
Mark Johnson:Okay, Can you talk about one of the things I find interesting with the C store? 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. It's kind of interesting how that works. We'd love to hear more about that, if you don't mind. Yeah.
Derek Weidl:I'll start off. 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. We talk about fore court versus back court. 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. That that kind of creates a lot of complexities around what seems like it should be a simple thing.
Mark Johnson:Okay, and do community stores have high brand loyalty? You talked about making getting then able to make that right turn versus the left turn, or is fuel based more on price? 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. They don't realize that they they spent more than that. You know going through it.
Derek Weidl:Yeah, it's, it's fine. It's a mix of rational and irrational behavior, like you described. 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. 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. 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. 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. So you know, from a brand loyalty perspective, I mean it depends on the customers.
Derek Weidl:We certainly see that. 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. From a C store perspective, the brand I haven't mentioned, which is actually really important for our business, is on the run. 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. On the C store side of things and how Canadians it's a bit different than what it is in the US too. 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. I think that's changing over time too. So I'd say the consumers are loyal to the brands in different ways in the different regions as well.
Mark Johnson:Okay, when you look at the customers of Parkland, you have a diverse offering in a program that addresses that. Do they have discerning traits? There's some unignificance to them, or what do they look like as customers?
Derek Weidl:Yeah, I'd say the typical way, as a marketer, you might look at customers. 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. 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. So it's interesting from that perspective. I think some of the customer traits that are different from other industries is the frequency that we have touch points with them. 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. 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. So all the types of things you want to see from a loyalty customer.
Derek 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. 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. We are close to launching AeroPlan in the coming months as well. Partnership with AeroPlan, which is the largest airline in Canada and largest airline program in Canada loyalty program in Canada as well. 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. So it's partnerships and is helping that diversity of the customers too.
Mark Johnson:Okay, when you look at partnerships, that's a pretty significant area of interest for Loyalty 360. We actually had a member or only brand meeting this week to talk about partnerships what's working, what's not working. They can stress the gamut from just buying a series of points from AeroPlan or MGM or whomever, or they can be completely integrated. 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. How do you look at partnerships from a parking perspective? How do you get them to work, especially as the whole landscape for partnership seems to be changing? A few partnerships, more involved partnerships what are you saying?
Derek Weidl:For us. 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. So partnerships for us one are very strategic. 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. 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.
Derek Weidl:Journey rewards as well. So it's certainly brand equity, certainly member acquisition and growth. Those are really key pieces to our partnership strategy. 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. And our program design lends itself well to having multiple large partners because we can be pretty distinct in the offering between the partners. So with CIBC we have an everyday discount of three cents off per liter on every fill.
Derek 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. 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. 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. So there's a couple of different pieces there. 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.
Mark Johnson:OK, great, a little bit. Your customers, right, how you look at them. 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?
Derek Weidl:Yeah, absolutely. We get that from a number of different sources. 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. 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. 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. 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. You can't digitize that experience. So there's always going to be that in-person moment where the program lives and dies. 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.
Derek Weidl:I think our challenge is, of course, we're a field-based program or a C-store program. Field-based program that you have a lot of kids working these jobs. 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. 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. We just did a big app redesign that was pretty extensive, that the customer feedback over time fed into that. Of course we brought to user testing too and did research on all those things as well. This is only going to work if the customers like it. 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.
Mark Johnson:Okay, what's the biggest challenge you face in your role? What keeps you up at night?
Derek Weidl:I think it's on two fronts. 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. 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. You know how important that customer interaction is for the program. So that that's that's one that keeps me up at night.
Derek 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? That also equals value for us as a program. 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. You know all the things all like marketers and loyalty. 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? So fundamentally, it's our customers that keep me up at night. I just hadn't put it together till now that those are both the same thing and you know. So. It's all the different touch points with the customers fundamentally.
Mark Johnson:Okay, are there programs you admire from a customer loyalty perspective? Customer, you know programs that you're loyal to and if so, what are they? Who are they and why are you loyal to them?
Derek Weidl:Yeah, it's interesting. You know, up in Canada there's pretty dynamic loyalty space. You know there's some that have been around for a long time. So you know PC optimum is one you're always kind of measuring yourself towards. For those who aren't familiar, it's you know LaBla's grocery chain, along with shoppers, drug mart, the pharmacy. 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.
Derek 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. You know, interact with their customers and you know kind of you know another high frequency type of situation with. You know find different ways and touch points to to interact with you and get you to. 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. 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. 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. 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.
Derek Weidl:You know, partially because I come from that space. But I also find it like very unique in the marketplace too and that it fun. 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. 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. It's like it's as straightforward as handing out a receipt to them, like it's just part of operating. 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.
Mark Johnson:Okay, excellent. And last question you know what can Loyalty 360 do to help you and your team in your customer loyalty journey?
Derek Weidl:You know I think industry best practices, like learning how other programs are doing different things and being innovative. You know we're all trying to stand out right and we're all trying to figure out how to break through the noise. 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. So you know what are, what are what's what's? What are people having success on? What are some of the benchmarks and how does that? 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. So we got to get creative and making that team less grudge.
Mark Johnson:Like All right, grudge purchase and moving away from being a grudge purchase, that's quite interesting.
Derek Weidl:We won't go all the way there. We just need to make the less painful, as I think is the goal there.
Mark Johnson:Okay, good Well, Derek, thank you very much for taking the time to talk to us today. Very interesting to hear a little bit more about you and also your. You know interesting program Parkland and kind of interesting to hear what keeps you up at night as well. So thank you very much for taking the time to share with us today.
Derek Weidl:Very, very appreciate it. Thanks for having the having me on and look forward to hearing the other guests you have on over the time.
Mark Johnson:Excellent. Thank you everyone as well for listening. Make sure you join us for another edition of our leaders in customer loyalty series coming up soon. Have a wonderful day.