My guest’s career is the dream of many managers. He is responsible for managing customer loyalty on a global scale at a corporation you’re all very familiar with. I invite you to listen to this episode featuring Jakub Krząkała, who represents the Shell brand. Katarzyna Nawrocka, On loyalty programmes at night.
Transcript – A global loyalty scheme
Jakub, we’re going to talk about loyalty schemes and we’ll be chatting tonight, so I’ll say good evening to you.
Good evening.
And right at the start, I’d like to ask you: what does loyalty look like at Shell on a global scale?
When we talk about Shell loyalty, we’re not talking about just one or two markets here, but about more than 20 markets and a customer base of over 50 million. Our programmes are deeply rooted amongst our customers. One example of this is Shell Club Smart in Poland, where we have a customer base of over a million, but there are also programmes that have recently been launched, such as Lotto Shell in Mexico. Every year, we aim to launch additional programmes in new countries. This enables us to continue growing.
We are talking about 20 markets, that is, 20 countries.
Yes.
And every year, new ones arrive.
That’s right.
Do you have a particular approach to selecting new markets and new countries?
We look at the maturity of a given market and the needs of our consumers. Based on this kind of research and our development strategies, we endeavour to implement the appropriate measures at the right time.
Kuba, there are three types of loyalty schemes on the market. Does Shell only have a points-based scheme?
The simplest answer is no. We tailor our programmes to market needs, as well as to the structure, requirements and expectations of our customers. There are countries where our customers actually expect the programmes to be points-based, but we also have markets where our programmes are based on a combination of points and discounts, as well as, for example in Mexico, a programme based on collecting stamps via a mobile app.
You mention Mexico a lot, and I wanted to ask you about Poland – what’s it like in our country?
In Poland, the programme is points-based. Our users can collect points for fuel purchases, as well as for non-fuel items such as hot dogs, coffee and car washes. Points can be redeemed for rewards, exchanged for products at the petrol station, or for vouchers with our partners, such as Allegro, booking.com or Rental Cars.
We’ll be talking in general terms – after all, this is the field you work in and specialise in, when it comes to loyalty schemes – but I’ll chime in every now and then to ask about Poland, so that we can make a comparison.
All right.
Now that I’ve mentioned what you do and that you work globally rather than locally here in our country, I was wondering what challenges someone who operates globally faces when it comes to loyalty programmes?
Because we operate in 20 markets, our users’ profiles – and their expectations – vary. There are countries where our users expect a plastic card and a loyalty scheme without a plastic card simply does not exist, but there are also countries where the trend is the other way round, meaning we are developing a mobile app and a virtual card. Another aspect that must always be taken into account is, of course, market regulations. In different countries, it is possible to offer incentives – that is, to reward customers for various things. There are also restrictions that we must always bear in mind. Fortunately, because we operate in so many markets, we’re able to share knowledge and experience amongst ourselves, which allows us to roll out solutions that have already been tested globally in a really effective way.
You mentioned two points. I hope you won’t mind if I interrupt for a moment to address our viewers, because Kuba mentioned incentivisation, and we’ve already discussed this – we have an episode where we explain what incentivisation is and how it’s calculated, and in the description of that episode you’ll find a link to that very programme and the mobile apps. I also spoke to Tomasz Wit about mobile apps, and I wanted to let our viewers know that they’ll find a link to that episode in the description of our programme. So, let’s stick with mobile apps for a moment and talk a little bit about what the Shell app is like.
So mobile phones – smartphones, that is – have really become an integral part of our lives. For us, a mobile app is a very important channel of communication, as it allows us to build relationships with our users there. When it comes to loyalty apps, they are, of course, no longer just a place for collecting points; in fact, they are becoming a platform where users want to find all the essential features and services, such as the ability to easily locate a petrol station, the ability to take advantage of programme benefits, or even mobile payments. From our perspective, of course, a mobile app should be well integrated with all other communication channels, whether in terms of content or design.”.
A lot has changed with your app, hasn’t it? Have there been any changes recently?.
We are constantly evolving, and naturally, this app is developing at different rates across various markets. Mobile payments are a case in point. There are countries where mobile payments are already an integral part of the mobile app, whilst in others we are only just about to introduce them.
And what about people who don’t use their smartphones for these purposes? They have a phone that’s intended solely for making calls and sending text messages – it isn’t a smartphone, or it is a smartphone but isn’t used for that, precisely because it doesn’t have any apps. Then there’s that plastic card we can use.
Yes, this card is available in most markets, and in Poland, of course, you can obtain one at a petrol station when you make a purchase; you can then register the card at home and join the scheme.
I’d like to ask you a few questions about the statistics, if you know them, because I’d like to see how Poland compares with the other countries you work with. Is it the case that people here use the mobile app or the plastic card more often, or is that the case in other countries?
Certainly in Asian markets, where mobile apps are definitely on the rise and where people are gradually moving away from plastic cards. As for the use of the mobile loyalty app itself in Poland, our base of active users has almost doubled over the last 18 months.
So it’s not that bad.
It’s not bad. We’re making progress.
I’m really pleased to hear that. In that case, I’d like to ask you about the possibility of earning points in other countries, because until now, when I’ve travelled abroad and worked at a Shell petrol station, I haven’t been able to add points to my Polish card. How does it work now?
The ‘cross-country’ feature – that is, the ability to collect points in two different countries – is a very interesting option, which we are, of course, continuing to analyse. At present, this option is available to users of the programmes in the Czech Republic and Slovakia.
So, as a Czech citizen, I can go on a trip to Slovakia and earn points there as well.
That’s right.
And what about me, when I’m travelling from Poland to the Czech Republic?
At present, this functionality is not available. We are, of course, looking into implementing such a solution, but it is important to bear in mind that there are many different factors to consider, such as technological constraints, legal and tax restrictions, and the mechanics of the loyalty scheme itself.
Does the currency of the country in question also play a role here, as we collect points and receive rewards? Each point is worth a specific amount, and depending on which country we’re in, that amount is different and in a different currency, so could this also be an obstacle to centralising all these cards and being able to collect points in every country?
This is certainly an aspect that needs to be considered and analysed. As we know, the Czech Republic and Slovakia have two different currencies, so we’ve managed to resolve this issue. As I mentioned, we’re considering rolling out this sort of solution in other countries, and it’s certainly easier to implement in countries with a single currency, such as those in the eurozone.
We’ve already mentioned the option of paying via a mobile app that lets you collect points. Could you tell us a bit more about how this works at Shell?
Absolutely. The mobile app is an integral part of our strategy and, of course, our customers expect to find all the necessary features in one place – namely, our loyalty app. Looking at the trends emerging in the United States and Canada, customers want to complete their transactions at the petrol pump; consequently, the integration of mobile payments into the loyalty app is no longer a question of ‘if’, but of ‘when’.
All right, we’ve been talking about functionality the whole time, but as someone who uses petrol stations and collects points, I have to ask about the most appealing part of loyalty schemes – the rewards. We have a rewards catalogue, and I suspect it varies from country to country. Do you carry out any research to help you put together such a rewards catalogue? Because in every country, it seems to me that completely different things are popular.
Absolutely – I’d even go so far as to say that it’s not just a catalogue of rewards, but rather what we offer our customers from the perspective of our loyalty programme. Of course, we’re constantly researching our customers’ needs, analysing their feedback and, in this way, developing the features and rewards that meet their needs. At present, we’re seeing significant differences in behaviour and in the way points are redeemed for rewards between corporate clients and consumers. Consumers are looking for a wider range of options; they want to be able to use even a small number of points to gain some sort of benefit.
You’ve actually got a bit ahead of my next question here, because I was just about to ask about the differences, to put it simply, between a customer who comes to a petrol station to fill up a company car and, in theory, collects points on a company card, and the customer who comes to the station to fill up their car but also very often to do a bit of shopping.
Corporate customers, as we know, face slightly greater restrictions when it comes to choosing a petrol station or what they can do with their fleet card, unlike end customers – our consumers – who can make decisions whilst on the move. From a rewards perspective, corporate customers are, of course, keen to collect points based on their behaviour and redeem those points for physical rewards. End customers – that is, our consumers – are looking for a wider range of solutions; they want the option of making so-called ‘micro-redemptions’, that is, using a small number of points to obtain some kind of benefit.
But are you talking about this on a global scale, or are you focusing on Poland at the moment?
Are these trends visible on a global scale? Where points-based schemes have been introduced, the trend is very similar.
And is that the case? Because that’s how it is here. „Here”, I mean in Poland, you can now do a bit of grocery shopping at any petrol station – because let’s face it, these days petrol stations aren’t just places where we fill up, wash our cars and maybe buy a light bulb. As someone on a business trip, I pull into a petrol station – a Shell petrol station, of course – I fill up the car, but I’ve got a very long journey ahead of me, so I need something good to eat, a coffee and to get ready for the meeting I’ve got in five hours’ time.
From Shell’s perspective, we want to be a partner to our customers on their journeys. We offer them the option of collecting parcels at petrol stations, and for corporate customers, the option of having their laundry done. Because we have laundry machines.
So I don’t have to iron my shirt at home; I can do it at your place instead.
Exactly.
Perfect.
And, of course, to offer customers the opportunity to purchase good-quality products from our catering range.
Because this is a challenge for you. You’ve had to expand your range, which means more products are now included in loyalty schemes, because when I buy chocolate or water, I also earn points.
That’s exactly right, and our mission as loyalty scheme operators is to reward our users for their transactions and their behaviour – and to do so by offering points not only for fuel purchases but, of course, for our entire non-fuel range as well. They have the opportunity to collect points more quickly, as well as to use those points specifically on this food and drink range.
It’s precisely this chocolate that’s going to save my life on this five-hour journey. All right, Jakub, I’ll be honest with you – before our conversation, I’d hoped we wouldn’t have to bring this topic up again, but we live in the reality we live in, and the coronavirus pandemic is still very much with us, so it’s not so much that I want to, but that I have to ask you how this has affected the loyalty programme and its development as far as the Shell brand is concerned.
The pandemic has had a huge impact on behaviour – on changes in our customers’ behaviour. In particular, the inability to travel and the shift to remote working. We are seeing three trends emerging across various markets. First and foremost, customers are now making purchases closer to home. Secondly, when shopping, they are trying to combine more shopping trips into a single visit – that is, not just fuel, but also all their non-fuel shopping – which naturally leads to a larger shopping basket. And the third trend, which I believe is the most important, is that customers want to complete their transaction as quickly as possible – whilst, of course, observing all social distancing and safety measures – and they prefer to carry out this transaction at the petrol pump rather than going inside the petrol station.
And these are the changes you’ve noticed all over the world; we’re not talking about Poland here.
Exactly.
I’ll be asking you some questions. The inability to travel – and we’re not just talking about private holiday travel here, but also business travel – meant that fewer customers were stopping off at this station.
We are seeing these trends; however, what is important from our perspective is to respond to these changes in our customers’ behaviour, which is why we are increasingly focusing on introducing mobile app payments more quickly, so that these customers will return to us and be able to carry out their transactions at the petrol pumps. We are also developing other marketing initiatives. One example of this is gamification, where we aim to build customer engagement, not just when they visit our petrol station, but also whilst they are at home.
Kuba, ‘gamification’ is a very difficult word. Let’s explain to our viewers what it means – for those who don’t know – because I suspect that most of our viewers are familiar with the loyalty schemes market and will know what we’re on about.
Gamification essentially refers to lotteries, scratch cards and competitions offered to users of loyalty programmes, but it also includes mobile app games, such as Shell Racing.
Games?
Games.
Go on, tell me.
This is an app that allows users to race in different cars. They can also use points – which are not directly linked to the loyalty scheme – to upgrade their car.
Right, so it’s not the sort of game where I collect points by playing, and those points go into a pool that I can later redeem for rewards; it’s actually a slightly different approach to customer loyalty.
There is a way to build a relationship with a brand, but of course, in an ideal world – and this is what we would like to strive for – such solutions would also be linked to loyalty schemes.
You told me about this game. We already know what gamification is – what’s it like in Poland, and what’s it like in other countries?
We are implementing various types of gamification in European markets, such as Austria and Switzerland, as well as in Canada. From the perspective of users of these types of solutions, we can see that there are customer segments that actually expect us to make gamification an integral part of the loyalty programme.
Could I ask you to give me an example of the most interesting case of gamification – a method, not necessarily here in Poland, but in any other country, that has worked best?.
One such example from overseas markets is Mexico, where customers collect stamps in their mobile app and then receive scratchcards. They never know what’s underneath these scratch cards, which helps us keep them engaged and ensures they keep coming back to our mobile app.
Right then, let’s fly from Mexico to Canada. And is there an interesting example in Canada?
Yes, we recently ran a competition there where users could win the chance to take part in a virtual race – alongside a professional NASCAR driver, of course.
So, where else could we take you? Where else could we fly to? There’s Mexico and Canada.
The United States.
OK.
Similarly, members of the loyalty scheme have the opportunity to take part in various types of prize draws, where the prizes also include the chance to attend various events – such as the chance to win tickets to a Formula 1 race.
Well, to be honest, from a customer’s point of view, it seems to me that an event like that is actually more appealing than a prize of that sort.
This is certainly a suitable solution for a certain segment of our customers. As you know, we strive to tailor our offering to our loyal customer base, and their needs vary. That is why we do not want to limit ourselves to a single solution; on the contrary, we want to offer a range of solutions so that our customers and the value we provide will meet their needs.
And what about the station staff? I imagine you have a loyalty scheme for your staff as well.
We may not have any loyalty schemes, but from the perspective of gamification and engagement, we have recently introduced a gamification scheme based on the concept of fantasy football. This means that station staff competed against one another, earning points for achieving specific targets linked to promoting the loyalty programme and climbing the leaderboard. Of course, the top performers received prizes, both non-monetary and cash, and this is a solution that we will continue to develop, learn from and roll out in other countries.
Exactly, because we’re talking about the UK here.
That’s right.
For now. To start with.
To begin with, the UK – and, of course, the measures we will be implementing in other countries – must be tailored to their needs, as football is not as popular there as it is in the UK.
Kuba, we’re nearing the end of our episode, so before I ask you about the details and the rewards, I’d like to summarise. We have 20 countries, which we’ll list in a moment. You’re researching very different markets and putting together your product range for petrol stations, as well as your rewards catalogue – we keep talking about this, but we haven’t actually mentioned which countries they are.
We’re talking about 23 markets. Let’s start with North America: the United States, Canada and Mexico. In Europe, these include Poland, the Czech Republic, Slovakia, followed by Ukraine, Hungary, Bulgaria, Germany, the Netherlands and the United Kingdom; and now we’re moving further east: Turkey, Russia, Malaysia, Singapore, followed by India, the Philippines, China, Thailand, Hong Kong, Indonesia and, in the south – that is, in Africa – South Africa.
We’ve also already discussed the range of prizes. Prizes are what interest the end consumer the most, and you mentioned that you tailor your approach to each market and assess which prizes are most appealing in each country. Can you name any of the most spectacular prizes?
I’m not sure about the rewards, but certainly in South Africa. There, customers are keen to collect points; they collect a lot of them and exchange them for physical products, and they don’t expect this. In Poland or Germany, on the other hand, customers actually want these rewards to meet their needs, to help them save money, but also to look after their car, which is very important to them. In Poland, we’ve recently introduced e-vouchers for our partners, which have proved to be a great success and are very appealing to our users.
All right then, Kuba, let’s save this for the very end. How does one become a manager on a global scale?
I began my journey in the world of loyalty in Poland, where I supported a variety of companies in developing CRM strategies and consumer segmentation. I then had the opportunity to leave Poland and help create loyalty programmes for Europe. And the next natural step, it seemed, was to join a global team, which would allow me to look at loyalty programmes and strategy development from a global perspective, rather than just a local one.
And that’s your story.
Yes.
Well then, I’ve got no choice but to keep my fingers crossed that we’ll finally be able to travel freely and that you’ll be able to fly off to that dream destination of yours, Mexico, and start work there.
Thank you very much.
Well, thank you very much for today’s episode, and I hope to see you again.
See you later.
And, of course, I’d like to invite my viewers to tune in to the next episodes.
