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Convenience Equals Loyalty

ExxonMobil finds that getting people in and out quicker makes customers come back more often.
Apr 08, 2002—April 8, 2002 - Back in 1995, Joe Giordano, Mobil Oil’s VP of product and business development was looking for a way to get customers in and out of its stations faster. Mobil (now ExxonMobil) had done a marketing study, which found that that was a big concern for customers. Giordano looked at a variety of pay-at-the-pump technologies before he finally discovered radio frequency identification, or RFID.

Mobil's Speedpass
At the time, RFID toll payment systems, which use active, or battery-powered tags, were just starting to become popular, and he envisioned a system where a reader mounted above the pump would receive a signal from a box in your car and bill you automatically. That turned out to be impractical (the signals from those systems travel so far that it would be hard to know which car was at which pump) and too expensive.

But Giordano soon learned about technology from Texas Instruments, which would make it possible to put readers in the pump. Customers would wave an RFID tag in front of the reader to pay. Each RFID tag would have a microchip with a unique serial number that would be matched to a customer in a central database, so their credit card could be billed automatically.

RFID had several advantages over other technologies. It’s very difficult to clone an RFID chip, so fraud wouldn’t be a problem. It’s easier and faster than a credit card. And it was relatively inexpensive. Each tag cost less than two dollars, which meant they could be given away to customers. And most important, the RFID number simply identified the customer. The customers could still pay have the transaction billed to their own credit card, if they wanted. That was important because a lot of people like to use a specific card to get frequent-flyer miles and other benefits.

In August 1996, Mobil began testing the system in gas stations in St. Louis using a key chain wand, a contactless smart card and a tag on the car. It quickly became clear that customers liked the key chain wand – a lot. Once they tried it, they stuck with it. Mobil began rolling out the RFID system, which it called Speedpass, nationally in May of 1997. And in 1999, it began putting Speedpass readers inside the convenience stores in its stations, so you can pay for a bagel and coffee the same way.

"We looked at everything we could think of," says Giordano. "RFID gave us the ability to make it simple and easy for our customers. It’s simple, easy, safe and cost-effective."

Giordano won’t reveal how much it costs to retrofit each pump with an RFID reader. He says it isn’t cheap, but he adds, "as a percentage of our total capital investment, it’s not that expensive."

ExxonMobil has rolled Speedpass to more than 7,000 Mobil and Exxon locations. And it has more than 5 million active customs. Giordano says the company’s market research finds that more than 92 percent of Speedpass customers are highly satisfied with the technology. Giordano says Speedpass are likely to make one additional trip per month to the gas station, which translates into a significant increase in revenue. "We’re very happy with our investment," he says.
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