Understanding the investment

[Fuel only] How Upside protects your profit as fuel margins shift

Margins fluctuate - and Upside takes this into account

Margins in the fuel business can be volatile - there are periods where your margins are very high, and other times when they are very low - or even negative. What sets Upside apart from any other loyalty or rewards programs is that our promotions are both margin-bound & dynamic. 

Why is this so important? It means that you don’t have to worry about the impact that margin fluctuations will have on the promotions you are offering customers via Upside. Simply put, Upside’s promotions will always move in real time within your available margin to protect your profit while continuing to deliver as many new transactions as possible to your business.

What this means for you:


When margins are high:

Upside allows you to use your expanded margin as a customer acquisition tool - utilizing promotions to grow your business by bringing you as much profitable volume as possible.


When margins are low:

Upside’s promotions dynamically adjust, giving away less to protect your profit while still incentivizing incremental transactions. Furthermore, Upside guarantees a minimum ROI of 15% for our fuel retailers and ensures you never pay for non-incremental transactions.


Unlike other programs, where promotions are static or require you to make any changes yourself, Upside’s promotions are dynamic - moving on every transaction to account for changes to your sign price and the costs associated with selling fuel. That means when the margin environment changes, you can focus on running your business instead of spending time running down what specific promotion amounts are profitable day-to-day or hour-to-hour. 

00_lightbulb.png Static promotions are often associated with a loyalty program or marketing campaign. When the margin environment changes, your business strategy associated with offering these promotions often has to change as well. That means dedicated personnel spend time monitoring which campaigns you are running and what promotions are being offered. Unlike static promotions, dynamic promotions don’t need to be turned on or off depending on the margin environment.

We all know margins can fluctuate wildly month-to-month, so it's not surprising Upside’s promotions also fluctuate over time. We can see the dynamic movement of Upside’s promotions in action when we look at the monthly change in margin relative to Upside promotions.



Promotions move dynamically as the margin environment shifts

Upside promotion amounts always rise and fall in the same direction as margins - and, importantly, the fact that the light blue line is below the darker blue line shows that our promotions are always LESS than margin. We leave as much margin as possible for your profit!

00_lightbulb.png What happens when margins are negative? Upside sets promotion amounts to 1 cpg to ensure your location is still visible to users. No profit share fee is applied for these transactions - you are only responsible for the promotion cost.



When margins are high

Higher-margin periods give you the opportunity to play offense by aggressively focusing on customer acquisition without cannibalizing your existing business. Upside’s broad reach and personalized promotions help you do just that.  

Strategically using higher promotions on occasion - when  margin allows - is also critical for retaining customers once Upside has delivered them to your site. To drive sustainable growth for your business over the long term, we need to not only bring you new customers, but keep these customers coming back. 

00_lightbulb.png Just because the app shows a high promotion at your location does not mean you pay that amount! Upside occasionally boosts promotions in the app to drive you more profit and funds these boosts entirely. Visit your Upside dashboard to see how much you’re paying for each transaction.

In an analysis of a retailer who has been on the program since 2019, we found that Upside user retention
1 at the retailer’s business is nearly 5x higher when the average promotion amount exceeds 8CPG compared to retention when promotions are consistently below 3CPG. 



Customer retention is higher when larger promotions are offered

Higher personalized promotions are more likely to be accepted than lower offers. This is probably pretty intuitive, but it’s important to note that user retention is significantly lower when promotions are always below $0.08/gallon. This aligns with a recent study published by the National Bureau of Economic Research where researchers found that drivers are unwilling to go two minutes out of their way for <$0.09/gallon savings at the pump. Having the ability to provide richer offers (when margin allows) improves retention, increasing the incremental volume driven to your station in the long-run. 

Even when margins are high, Upside’s goal is always to give away the lowest promotion required to incentivize a user to make an incremental purchase. Remember - Upside is built on a profit-sharing model, which means that we only make money by sharing in the incremental profit with you. So the more profit that’s leftover after the customer promotion has been paid out, the more there is for both of us to share!


When margins are low 

Upside’s promotions always move in real time, so they are naturally lower during low-margin periods. But, even when margins are low - or even negative - Upside is always working to maximize the amount of new, profitable sales we deliver to your business.

What does this mean in practice? 

When margins are negative, Upside sets all promotions to 1 cent per gallon. Why? The simple answer is that acquiring users for the first time is very expensive - so we want to ensure a consistent user experience by making sure your sites continue to be visible to existing users. 

Upside also funds a significant portion of customer promotions to both acquire new users and retain existing users.  On average, Upside funds as much as 30% of customer promotions through boosts & bonuses that cost you nothing. 

00_lightbulb.png Notice a promotion in the app that is higher than 1 cpg when margins are negative? Don't worry - that's a boosted offer funded by Upside. You are only responsible for the base promotion amount. 


Upside's ROI guarantee

Additionally, Upside’s ROI guarantee ensures that you receive a minimum 15% quarterly ROI on fuel transactions; if ROI comes in under this threshold, Upside will issue you a refund for the difference in fees & promotion costs.

00_lightbulb.png To learn more about how Upside calculates ROI, see How Upside delivers a meaningful ROI


In summary:

  • Unlike any other program, Upside’s promotions adjust in real time as your margin changes
  • When margins are high, larger promotions can be used to acquire more customers and bring you even more profitable sales
  • When margins are low, Upside’s promotions dynamically adjust, giving away less to protect your profit 
  • Upside guarantees you will earn at least a 15% quarterly ROI
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