Payment Methods

GasBuddy: Making Friends On Both Sides Of The Gas Pump

In the aftermath of Hurricane Harvey, huge swaths of Texas ran out of fuel. Customers were sitting in milelong lines at a dwindling number of gas stations that still had fuel. Houston, Dallas, Austin and San Antonio authorities directed people to the mobile app GasBuddy, which tracked and displayed stations that were open and had fuel – and at what price – in real time.

GasBuddy is the consumer’s and fuel retailer’s friend. That’s the message this Boston-based tech company has been evangelizing, and Texas isn’t the only place where people are reaping the benefits of that friendship – on both sides of the gas pump. GasBuddy CEO Walt Doyle recently told Karen Webster how the company has struck the balance between fuel brands and consumers and how the GasBuddy platform is about to get even stickier with a foray into payments.

Win-Win-Win

Doyle said that it all starts with critical mass and a base of users. Every day, 3 million people write reviews of their gas station and convenience store experiences and post them to the Gas Buddy app. That crowdsourced customer feedback runs the gamut from clean bathrooms to coffee quality, and combines that with hard data like pricing and availability of goods such as prepared food and beer to help customers choose which station they’ll visit on their journey to – wherever. Home. Work. The day trip to Six Flags. Over the river and through the woods to grandma’s house. You get the point.  It can lead to some pretty powerful insights for those brands, Doyle said.

Doyle says everybody wins: Consumers like finding cheaper, cleaner, more convenient gas stations and convenience stores, and retail brands realize that they can win customers by leveraging GasBuddy’s data to excel in those areas and build out GasBuddy pages that promote their brands.

All that has helped move GasBuddy’s value proposition from “finding cheap gas” to “finding the perfect pit stop,” Doyle said.

If a consumer “is taking a weekend trip to the mountains, they want to stop once, fill up their tank, grab a quick bite to eat, stock up on beer and milk for the condo, and use a clean bathroom. Price is always important in retail, but there are a lot of factors that influence choice.”

GasBuddy’s data, Doyle said, help those brands sharpen their competitive edge beyond just the price at the pump. For instance, GasBuddy showed that Sheetz beat out WaWa among Pennsylvania customers not because it had cheaper gas, but because it had better coffee. The quality of coffee, says Doyle, has a direct correlation with foot traffic in the morning.

Yet on both sides of the pump, Doyle said, GasBuddy’s customers wanted more. GasBuddy has been around since 2000 – long before mobile apps and ePayments were things, and long before anyone had heard of “crowdsourced data.”  But  today, it’s not enough just to lead the horse to water, even if it is the cheapest water in the city with the best coffee and cleanest bathrooms. Customers want a product that would let them pay for gas, and fuel brands wanted an option that could help them save on the cost of payment acceptance. This week, GasBuddy gave both sides that option.

Why Payments?

Fuel and convenience retail is a fragmented market, said Doyle. There’s little customer loyalty, despite brands spending a whole lot of money in an effort to create it. Even where they succeed, Doyle said, their programs can only help customers so far because traveling out of state will expose the customer to a whole new bevy of brands where their loyalty points will do no good, either for them or for the issuing brand.

That’s one of many reasons why Doyle sees so much potential in the market. That, and the fact that people go nuts for cheap gas. Offer customers, say, a $350 sign-up bonus at a bank, he said, and they’ll pass. But offer them $350 in free fuel, and they’ll run over their grandma for you. (Doyle’s words, not ours).

That’s why GasBuddy decided to get into payments – and get into it with a dramatic offer, guaranteeing customers five cents off a gallon at most gas stations in the U.S.  And do it via a closed-loop, ACH-based payments product that can be used at more than 150,000 locations – so far.

To start, GasBuddy users are given a plastic card which is used to activate the pump; the rest of the process is completed using the company’s mobile app.

Onboarding the consumer is something that Doyle said the GasBuddy team worked hard to streamline. ACH enrollments can lead to drastic drop-off due to processing time: up to two days, when users are enrolling so they can use the product now. GasBuddy lets them complete that process in 60 seconds from web or mobile by essentially logging into their bank account from the point of registration and authorizing GasBuddy to access it.

Streamlined onboarding aside, Doyle admittedly describes this “Version 1” product as a bit clunky, but an easy workaround to the gnarly point-of-sale integration block at launch. Moving forward, however, GasBuddy is going full-on mobile. Customers will be able to link the mobile app with their bank account and pay as they would with any other eWallet.  Down the road – yes, pun intended – many interesting partnership opportunities are on the roadmap that allow both brands and consumers to benefit from the power of the app.

So far, it’s paying off, Doyle said. In the few short days since rollout to a limited group of users, adoption of the new GasBuddy payment card has been strong – likely buoyed by GasBuddy’s brand recognition – that GasBuddy’s servers crashed.  But Doyle said that the real payoff from payments, however, isn’t financial, at least not directly.

“We make a little money on payments,” Doyle said, “but the real value is driving customer churn down and frequency of use up. The churn rate is low in payments; if we get people to use us for that, then we’re stickier.”

 

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