Govt interview with Alejandro Gonzalez-Saul, FEMSA

Lower than two years in the past, the corporate migrated an current loyalty program in its OXXO model (Oxxo Premia) into a brand new initiative named Spin Premia. Now we have heard concerning the enormity of this challenge and the success achieved to this point, and contacted Alejandro Gonzalez-Saul to find the main points of how this large program got here to life. 

Alejandro is a finance professional with a Grasp’s from ITAM and has reshaped loyalty methods for a lot of manufacturers over a 20 yr profession. At American Categorical Mexico in 2004, he diversified redemption choices, tripling engagement in two years. Main Membership Premier de Aeromexico, he propelled it into Mexico’s premier coalition loyalty program. As founder CEO of Factors Colombia in 2018, he pioneered Colombia’s loyalty market. 

Becoming a member of FEMSA in 2021, he led the transformation of OXXO’s loyalty program into SPIN Premia, amassing thousands and thousands of customers. Alejandro is a sought-after advertising and marketing government, and he typically shares insights by Merca 2.0 and lectures, whereas mentoring inside FEMSA.

The Smart Marketer is lucky to have the chance to take a seat down with Alejandro and to be taught concerning the Buyer Loyalty journey at FEMSA. Listed here are the highlights of our interview with Alejandro Gonzalez-Saul.

FEMSA – a Mexican primarily based Multinational

For greater than 130 years FEMSA has continued its progress and in the present day, FEMSA is among the largest employers in Latin America, with greater than 350,000 workers and working in 18 international locations (Germany, Argentina, Austria, Brazil, Chile, Colombia, Costa Rica, Ecuador, United States of America, Guatemala, Luxembourg, Mexico, Nicaragua, Netherlands, Panama, Peru, Switzerland, and Uruguay). You possibly can be taught extra about FEMSA right here. 

The worth-creation and progress of the corporate is targeted on retail, drinks, and digital. Due to the latter, FEMSA is growing an omnichannel ecosystem of monetary companies and buyer loyalty initiatives leveraged on our sturdy model popularity and footprint.

Buyer Loyalty in key FEMSA retail manufacturers

FEMSA’s retail division operates two distinct manufacturers, every with its personal worth proposition, OXXO and OXXO GAS. There are greater than 23,000 OXXO shops in Mexico and the Americas. OXXO GAS solely operates in Mexico, and it has greater than 500 gasoline stations. 

These two worth propositions are complementary, and in the present day the corporate has greater than 300 OXXO GAS stations with an OXXO retailer. Relying on the nation and the scale of the community, there’s a mixture of firm owned, business commissioned, and franchised shops. All OXXO GAS stations are firm owned.

OXXO beforehand had a loyalty program named Oxxo Premia, which migrated into Spin Premia. When requested concerning the principal targets of the brand new program, Alejandro responded “The principle aim of this system is to ship worth and financial savings to the members by their factors, that are like cash. Equally, this system goals to offer worth to the allies throughout the ecosystem by gaining a greater understanding of their prospects, being a part of a community of different related manufacturers, and being a part of a advertising and marketing and communication platform. The mannequin is a B2C and B2B proposal. 

We discovered additional that the rationale for evolving the worth proposition of the loyalty program was to extend the use instances for which a member might use this system past comfort shops. The rationale was to create an on a regular basis worth proposition and be current in “the primary moments of a member consumption. Though OXXO is on daily basis, it doesn’t cowl 100% of an individual’s share of spending.

Alejandro shared a few of the greatest challenges on this challenge:

• Create a technological and knowledge platform able to supporting the thousands and thousands of each day transactions that cross by OXXO’s POS programs (13 million folks go to an OXXO retailer in Mexico on a regular basis).
• Discover a answer to register the knowledge of thousands and thousands of customers and guarantee this knowledge was correctly structured for evaluation and understanding.
• Migrate the outdated program to the brand new one with out affecting the real-time operations of the POS, as OXXO operates 24 hours a day, twelve months a yr, and this system couldn’t be halted attributable to this rebranding change. 
• Migrating thousands and thousands of customers with out altering their historic transactional knowledge was one other essential problem.
• Like several coalition, attracting main allies to this system and getting them to undertake the worth proposition as their very own is at all times a big problem, particularly originally phases of the brand new program’s life.

Spin Premia Overview

The Spin Premia program was launched with the brand new worth proposition in April 2023. The challenge took 1 yr and three months from the conception of the technique, definition of the worth proposition, UX/UI design, know-how and knowledge structure choice, monetary mannequin, cybersecurity, fraud mannequin, CX (Buyer Expertise), choice of founding allies, and so on.

A Spin Premia member finds on a regular basis comfort within the loyalty program’s worth proposition. The worth proposition is based totally on OXXO shops, the place for each $10 pesos spent, they earn 2 factors, equal to $0.20, which can be utilized as a type of fee for all merchandise offered within the retailer (apart from cigarettes and child formulation, for regulatory causes). 

In different phrases, the person receives a 2% profit. Along with OXXO shops, the member can earn and use factors at OXXO GAS, with the Spin by OXXO card (fintech), and different exterior allies of FEMSA, corresponding to Volaris, the main low-cost airline, ViX, the Televisa / Univision streaming service, targeted on Spanish-speaking audiences, Cinemex with cinema ticket coupons and reductions, and Caliente, an internet on line casino that additionally permits customers to earn and use Spin Premia factors.

Finally, Spin Premia factors are cash that can be utilized as a type of fee all through the ecosystem. The worth of the factors is identical throughout all allies.

Alejandro shared perception into the particular nature of the worth proposition that has contributed to this system’s outstanding success. The principle function of this system is the simplicity and transparency of the worth proposition. Factors have the identical worth ($0.10 MXN) throughout all ecosystem allies. The worth is communicated to the members to make sure consciousness of how a lot cash they’ve in factors. One other key issue for fulfillment is the convenience of incomes and utilizing factors. To earn factors, solely a cellphone quantity is required, and to make use of them, a digital or bodily loyalty card is important.

From a channel perspective, this system was born 100% within the bodily world because of the footprint of OXXO, its nationwide presence, and its attain throughout all socioeconomic ranges. Presently, a Cellular App is being developed to permit members to have a digital expertise with this system. 

The thought is to offer better worth and an entire expertise by the app. For instance, coupons and punch playing cards are solely obtainable by the digital channel. Because of this if a buyer desires to make use of low cost coupons, they must obtain the app to entry them.

We requested concerning the “incomes velocity” of this system – a essential factor in buyer acceptance and engagement. Alejandro shared that “the redemption velocity is extraordinarily quick. That is primarily as a result of the factors are like cash; due to this fact, they can be utilized as a full or partial fee methodology. The typical buy ticket in OXXO may be very low, so the factors are used very incessantly. For instance, factors can be utilized to pay for a Coke. Customers are additionally discovering worth in utilizing their factors to pay for Volaris ancillaries, corresponding to additional baggage charges, seat assignments, and so on.”

Many advantages from this system can be found past factors. Spin Premia affords low cost coupons with main CPGs, cinema tickets, premium ViX memberships, and low cost coupons with the airline. Moreover, CPGs are fascinated with activating punch playing cards that incentivize the frequency of purchases of sure merchandise, the place the member advantages by acquiring free merchandise. 

Spin Premia additionally goals to reward members past transactions. The worth proposition affords members entry to unique live shows and music festivals. This system is lower than 1 yr; thus, it’s in fixed evolution to bolster the worth proposition and person expertise.

A preview of outcomes

Membership progress has been sturdy. As of year-end 2023 this system had 40.2 whole million members. The acquisition of recent members continues with wonderful momentum. 

Alejandro defined the sources of this progress, saying “OXXO shops and OXXO GAS stations function a wonderful acquisition engine, though it additionally represents a problem as a result of it isn’t nearly acquisition however about engagement as nicely. In reality, this side is the place we’re focusing, not a lot on acquisition however totally on creating each day customers by leveraging our program and different options.”

As seasoned Loyalty Entrepreneurs know, exercise charges are key as soon as the essential mass of membership has been achieved. Spin Premia is performing nicely towards this metric additionally. At year-end 2023, Spin Premia had 19.2 million lively customers, up from 12.9 million only one yr prior. 

Member exercise with this system may be very frequent. Alejandro shared “contemplating that OXXO has greater than 13 million each day transactions and that the loyalty program already accounts for a big share of tender (31%), we will say that the worth proposition is producing excessive engagement.”

The put up How Spin Premia turned the brand new Loyalty Technique for FEMSA appeared first on The Smart Marketer.