Love '˜em or Hate '˜em, but BP Loyalty Program Kicks In

Last spring, during the evolution of the Deepwater Horizon oil spill, I wrote a series of articles that addressed the meteorological and oceanographic factors impacting the spread and cleanup of the spill. I also noted that there was plenty of blame to go around, both in terms of creating the spill and in fighting it's environmental outcomes. Surprise! The initial findings of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling have spread around some blame, but seem to have missed the government's role in setting the stage for the disaster. (link) I'll be looking forward to reading the report when it's released next week (January 11, 2011) to see if they can get it right.

Meanwhile, BP's common stock price tumbled from $60.48 on April 20, 2010 to $27.05 on June 28, 2010 and then has climbed slowly (but mostly steadily) to $46.50 on January 5, 2011.

Translated into percentage change terms [(latest value - original value) / original value], this yields a net loss of 55.27% followed by a gain of 71.90%.

Although percentage change suggests that the value today should be greater than what it was back on April 20, 2010, the difference between the two perspectives is that the original value for the computations changes.

Regardless, BP lost lots of customers following the spill. There were numerous online articles describing how BP station owners and operators were upset with what BP had brought upon them.

Now, BP is taking a very proactive step toward winning back its customers. Its THANK YOU DAYS program (which began quietly last month) allows individuals and/or unique e-mail addresses to earn a maximum of three ten dollar ($10) gas certificates by making specified gas purchases. Each certificate requires the five purchases of at least 8 gallons of any grade of BP fuel. The program is NOT valid in New Jersey.

So, I did the math, recognizing that gas at BP stations typically costs several cents a gallon more than gas at competing stations. Hence, I have to spend a little more to earn the "Thank You" bonus.

At least in Naples, Florida (where I live), BP gas costs about 6 cents more per gallon, for all grades, than at other stations. So, if I have to make five purchases of 8 gallons each, that means I have to pay 6 cents extra times 40 gallons. This costs me $2.40 for a bonus of $10. This a return or a percentage change in value of 317%. Wow! That's a great return compared to even the stellar rise in price of BP stock since June 28, 2010.

The program (which only runs until March 1, 2011 or until supplies are exhausted) is fairly easy to use. First, look for labeling on gas pumps to ensure that the station participates. Then, once you make your purchase, go inside the station to have your receipt initialed and get a rub-off Loyalty card. You'll see a code. Keep the card and code information in a safe place.

You have to set up an account at the THANK YOU DAYS web site and enter your five codes. Once you enter 5 cards, you'll earn that ten dollar credit. Credits will be redeemable until September 6, 2011.

It's not clear that this will win back customers permanently. But for now, at least, BP is moving in a positive direction. So, too, are my wife and I. We collected our first loyalty card yesterday.

© 2011 H. Michael Mogil