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Introduction
 
Across Europe 40% of commercial fuel volumes are not purchased with a fuel card. This report highlights the markets and segments offering the greatest opportunity for fuel card growth and examines the key barriers preventing fuel card usage or existing users switching to another provider. Ultimately, this report offers evidence of which acquisition channels work best for both provider and client.
 

 
Scope
 
An assessment of market opportunity through an examination of the fuel card penetration rate per CRT and fleet vehicle across 16 European markets
 
A quantitative breakdown of the commercial fuel retail market revealing fleet and CRT fuel volumes purchased with cash, credit cards and fuel cards
 
An evaluation of acquisition channels in terms of cost, effectiveness and customer quality, based on detailed interviews with industry experts
 
An investigation into the most successful acquisition ventures across Europe with a series of case profiles offering strategic insight
 
Highlights
 
Although the fleet segment generally offers the most potential for growth across Europe, opportunity varies between regions. For example, in Italy there are 0.3 fuel cards per fleet vehicle whilst in Sweden there are 0.8 per fleet vehicle. The credit card is the fuel card's strongest competitor with 23% of commercial fuel volumes bought this way.
 

 
Although fuel card providers will entice CRT and fleet vehicles away from competitors by offering competitive fuel rebates and adequate fuel card networks, companies not using fuel cards are often easier to acquire. A lack of accurate information, often leading to largely unwarranted security concerns, is a key barrier preventing fuel card usage.
 

 
Traditional acquisition channels, such as telesales and direct mailing, achieve better response rates when combined although their effectiveness is inversely proportional to the level of channel saturation in the market. In contrast, partnerships work well independently whilst being relatively low cost and far-reaching.
 

 
Reasons to Purchase
 
Understand which segments and markets offer the greatest potential for growth in the fuel cards market
 
Overcome some of the major switching barriers for those currently using fuel cards and those using alternative payment methods
 
Evaluate acquisition channels in terms of their cost, effectiveness and the quality of the customer gained

TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 3
 
Based on fuel card penetration rates, Southern European markets have greatest potential for growth and Scandinavian markets the least 3
 
Credit cards are the fuel card’s key competitor with 23% of commercial fuel volumes bought this way in Europe’s largest markets 4
 
Existing users in the fleet segment are seeking a dedicated level of customer service whilst CRT value reporting tools 5
 
A fear of fraud and a lack of accurate information are the key barriers preventing non-users from switching to a fuel card 7
 
Across Europe, partnerships work well independently whilst direct mailing and telesales are most effective when combined 8
 
Recommendations 10
 
CHAPTER 2 INTRODUCTION 21
 
This report will enable suppliers to realise the acquisition opportunities within their own market and beyond 21
 
This report is aimed at a wide range of fuel card provider executives 21
 
The report is divided into opportunity, switching barriers, an evaluation of acquisition channels and is both regional and market specific in scope 22
 
For brevity, a range of market terms are used throughout the report 25
 
CHAPTER 3 ASSESSING THE OPPORTUNITY 26
 
Across Europe there are strong motivations to exploit non-users of fuel cards in the commercial market 26
 
Based on fuel card penetration rates, Southern European markets have greatest potential for growth and Scandinavian markets the least 26
 
Fuel card markets in Southern Europe are growing annually with untapped potential in both CRT and fleet segments 27
 
In Central Europe, CRT fuel card penetration is typically high with the fleet segment offering the greatest opportunity 29
 
In the UK, the fleet segment of the market offers the most potential for growth 30
 
Scandinavian markets are the most developed in Europe and both CRT and fleet segments are verging on fuel card saturation 32
 
Credit cards are competing for commercial fuel volumes with 23% purchased with this payment method 33
 
Credit cards are the fuel card’s key competitor with 23% of commercial fuel volumes bought this way in Europe’s largest markets 34
 
In France, 46% of fuel volumes in the fleet segment are purchased using alternative payment methods 35
 
In Germany, 83% of CRT fuel volumes and 62% of fleet fuel volumes are purchased using a fuel card 37
 
In Italy, 80% of fleet fuel volumes and 55% of CRT fuel volumes are bought with cash or a credit card 38
 
In the Netherlands, 50% of fuel used by the fleet segment is bought on a fuel card 40
 
In the fleet segment in Spain 26% of fuel volumes is still purchased with cash 41
 
Whilst 45% of UK fleet fuel volumes are paid for with cash or credit cards, the 6th EU VAT Directive signals fuel card growth 42
 
CHAPTER 4 SWITCHING BARIERS AND MOTIVATIONS 45
 
Understanding and overcoming the switching barriers perceived by specific segments is essential to acquisition 45
 
There are many barriers preventing current users from looking to competitors and non-users from switching to a fuel card 45
 
Existing users in the fleet segment are seeking a dedicated level of customer service, whilst CRT value reporting tools 46
 
In Southern Europe, CRT existing users are price-motivated but reporting tools are becoming more important 47
 
In Southern Europe, existing users in the fleet segment seek quality service with an emphasis on personable relationships 48
 
In Central Europe, existing users in the CRT segment are used to competitive fuel prices and so a strong network is essential 50
 
In Central Europe, existing users in the fleet segment is highly motivated by the quality of customer service on offer 52
 
Existing users in the UK’s CRT segment expect sophisticated and comprehensive fuel reports 54
 
In the UK, existing users in the fleet segment are seeking comprehensive service packages as well as competitive discounts 55
 
A fear of fraud and a lack of accurate information are the key barriers preventing non-users from switching to a fuel card 57
 
Whilst some CRT non-users in Southern Europe are worried about card fraud, others refuse fuel cards in order to evade tax 58
 
In Southern Europe, alternative payers in the fleet segment are seeking a good local network as well as attractive rebates 59
 
Any remaining CRT non-users in Central Europe exist as a result of restraints implemented by fuel card providers 61
 
A significant proportion of Central European non-users in the fleet segment are ineligible for a fuel card 62
 
CRT non-users in the UK are scarce and those that exist may have failed credit checks or have a low mileage 64
 
UK alternative payers in the fleet segment are prone to administrative legacies and a lack of accurate information 66
 
CHAPTER 5 ACQUSITION CHANNELS 68
 
Partnerships work well independently for acquisition purposes whilst mailing and telesales are most effective when combined 68
 
Across regions, partnerships, direct mailing and telesales are the most effective, least costly acquisition channels 68
 
Channels are evaluated in terms of their relative cost, effectiveness and the quality of customer acquired 69
 
For existing users in Southern Europe, partnerships are favoured over direct mailing and telesales 70
 
Non-users in Southern Europe seek advice from associations and are attracted to fuel card providers with partnerships 71
 
In Central Europe direct mailing is considered on of the most effective and affordable channels for acquiring existing users 73
 
Non-users in Central Europe are still responsive to traditional acquisition channels and seek advice from associations 75
 
Telesales and mailing have proven effective for acquiring UK existing users but customer responsiveness is starting to dwindle 77
 
Non-users in the UK have grown resilient to acquisition campaigns and so warrant the use of multiple channels 78
 
Unlike some other channels, partnerships and association agreements are far-reaching and work well independently 80
 
In comparison with other channels, association agreements and partnerships offer the best balance between cost and effectiveness 81
 
The cost of association agreements is best calculated on the basis of litres of fuel gained directly from the alliance Error! Bookmark not defined.
 
Agip’s agreements with Italian associations increase levels of trust, confidence and, ultimately, customer numbers 84
 
Mercedes-Benz and UTA is a mutually beneficial partnership gaining an average of 3,200 customers annually since 2000 85
 
Total’s partnership with Vinci parking operators and Repsol’s credit card with Visa target the fleet segment 86
 
A combination of complimentary channels is the optimal approach to acquisition 87
 
The acquisition capacity of channels is improved significantly when two complimentary channels are combined 88
 
In the UK and Central Europe, direct mailing and telemarketing have proven a successful pairing 89
 
In Southern Europe, 30% response rates are now being realised as a result of the combination of mailing and telesales 91
 
CHAPTER 6 RECOMMENDATIONS 93
 
Safety in numbers: providers should form partnerships and target segments with multi-channel acquisition campaigns 93
 
CHAPTER 7 APPENDIX 95
 
Definitions 95
 
Research methodology 95
 
References 98
 
Relevant links 99
 
Related Research 99
 
SPP writing team 99
 
How to contact experts in your industry 100
 
LIST OF TABLES
 
Table 1: Fuel discount available to Confapi members subscribing to a Multicard or Routex Multicard based on litres used, 2005 85
 

 

 
LIST OF FIGURES
 
Figure 1: Sweden and Finland have the highest card penetration rates, Portugal and Italy the lowest 4
 
Figure 2: Credit cards are a popular second choice for fuel purchases, particularly in Southern Europe 5
 
Figure 3: Aside from fuel rebates and network, customer service and reporting tools are a key concern for existing users 6
 
Figure 4: A lack of accurate information regarding fuel cards, their benefits and the level of security they offer can dissuade non-users from subscribing 8
 
Figure 5: Telesales and direct marketing alongside the involvement of third parties strike the best balance between cost and effectiveness 9
 
Figure 6: Befitting the European fuel cards industry, this report is regional in scope yet focuses on key markets where necessary 24
 
Figure 7: Sweden and Finland have the highest card penetration rates, Portugal and Italy the lowest 27
 
Figure 8: Southern Europe is currently CRT-biased with much untapped potential existing in the fleet segment 28
 
Figure 9: Central Europe, with the exception of Switzerland, has a higher fuel card penetration for CRT than for fleet 30
 
Figure 10: The UK has an above average card penetration for CRT and a below average penetration for fleet vehicles 31
 
Figure 11: Fleet and CRT fuel card penetration rates are some of the highest in Europe 33
 
Figure 12: Credit cards are a popular second choice for fuel purchases, particularly in Southern Europe 35
 
Figure 13: In France, 84% of CRT fuel volumes are purchased on a fuel card 36
 
Figure 14: In Germany, the fleet segment offers the greatest potential for fuel card growth with 29% of fleet fuel volumes paid for with a credit card 38
 
Figure 15: In Italy, 41% of fleet fuel volumes and 33% of CRT volumes are purchased on a credit card 39
 
Figure 16: 38% of fleet fuel volumes are bought on a credit card whilst only 14% of CRT fuel volumes are bought with this payment method 41
 
Figure 17: In Spain, 54% of fleet fuel volumes are purchased using cashor a credit card 42
 
Figure 18: 30% of fleet fuel volumes are bought with cash 44
 
Figure 19: In Southern Europe, whilst most fleet managers are strongly price-driven, they are beginning to look at other extra services 48
 
Figure 20: Fuel card users in the fleet segment in Southern Europe are looking for a balanced mix of service, price and network 50
 
Figure 21: Fuel card users in the CRT in Central Europe are seeking sophisticated all-round service packages 52
 
Figure 22: Fuel card users in the fleet segment in Central Europe look for good quality customer service 53
 
Figure 23: A satisfactory, sophisticated and tailored service package is becoming a more significant barrier to switching 55
 
Figure 24: The fleet segment in the UK expect a comprehensive service package and in-depth reports 57
 
Figure 25: The risk of card fraud may deter some CRT businesses from switching to a fuel card 59
 
Figure 26: For non-users in the fleet segment in Southern Europe insufficient rebates and a fear of fraud are significant barriers 61
 
Figure 27: Fuel card providers’ requirements can prevent those remaining CRT non-users from taking a fuel card 62
 
Figure 28: Some fleet companies in Central Europe remain ineligible for a fuel card due to their size, mileage or credit history 64
 
Figure 29: A lack of faith in card security is the most common reason why clients in the fleet segment are not using a fuel card 65
 
Figure 30: Administrative legacies and a lack of information are the key barriers preventing fleet companies from switching to a fuel card 67
 
Figure 31: Cost, effectiveness and customer quality are the key factors for evaluating acquisition channels 69
 
Figure 32: Associations and partnerships are particularly effective in Southern Europe than elsewhere in Europe 71
 
Figure 33: Association agreements can encourage non-users to switch to a fuel card 73
 
Figure 34: Central European regions are developing acquisition environments and existing users are responding well to telemarketing campaigns 75
 
Figure 35: Although non-users respond less well to direct mailing and telesales, partnerships and associations continue to have a positive impact 76
 
Figure 36: Direct mailing and telesales have proven successful in the past but the growing effectiveness of partnerships cannot not be ignored 78
 
Figure 37: Few channels can independently acquire non-users in the UK market and so appropriate channels should be used in conjunction with each other 80
 
Figure 38: Across Europe, partnerships and associations are considered effective acquisition channels 82
 
Figure 39: Tamoil’s partnership with FITA has raised brand awareness and levels of customer acquisition 83
 
Figure 40: This co-branded card offers companies who are members of certain associations a further fuel discount 84
 
Figure 41: The MercedesService is a co-branded card which offers a wider variety of industry-related services to the CRT segment 86
 
Figure 42: Direct mailing is less costly than telesales but its effectiveness can be improved by aligning it with a follow-up call 89
 
Figure 43: Direct mailing and telesales have different strengths at various points throughout the effectiveness and cost framework 90
 
Figure 44: The more developed the acquisition market, the more successful direct mailing and telesales have proven to be 92