Yesterday, on April 20th, 2020, oil prices plunged by 321% to -$40.32 per barrel. With oil futures trading in the negative territory, suppliers were offering to pay buyers to take oil off their hands.
The futures contracts for West Texas crude in question are basically a preorder for oil in May bought in April. But with the economy coming to a standstill, there is so much unused oil in the reserves that energy companies have no room to store it. And without enough storage space, no one wants to purchase oil futures that are about to expire.
Investors remain unconvinced that the demand for oil will recover in the short term even after OPEC and its allies agreed to the biggest-ever oil production cut intended to backstop prices. The now historic price drop acted as an incentive to buy the oil with a generous discount.
Many experts have weighed in on this unprecedented phenomenon, its causes, consequences, and what it means for the world.
What do SDK.finance experts have to add?
“It looks like sellers have experimented with a new loyalty program. The price drop yesterday was equivalent to oil sellers introducing a $40 coupon to entice their customers to purchase their product for delivery in May. Printing coupons is a well-known marketing strategy that many customers love. The most interesting question is: will oil buyers become more loyal to oil sellers because of this amazing deal?” – adds Alex Malyshev, the CEO of SDK.finance.
If you would like to bring the same loyalty program to your clients, it can be implemented in just a few easy clicks with the Loyalty Program solution:
1. Create a loyalty rule
Specify the following fields to create a loyalty rule for discount coupons:
- Loyalty rule name: ‘$40 discount coupon to all buyers in May’
- Start date: 04/20/2020
- End date: when the rule will expire
- Bonus calculation type: FIXED
- Value: $40
2. Issue loyalty coupons
Loyalty coupons can be implemented using our prepaid functionality. Choose the following to implement coupons:
- Generate prepaid coupons to a merchant wallet: ‘$40’
- Determine serial and PIN numbers for any required coupon medium (physical scratch cards, e-mail, SMS, WhatsApp message, etc.)
- Integrate terminals or websites with the Loyalty system
- Receive full or partial payments using coupons or promo codes from a consumer to merchant
3. Activate the loyalty rule
Now the merchant can activate the created loyalty rule by pressing the “Activate” button and confirming the action. That’s all it takes!
Coupon discounts have proved themselves to be a tremendous tool for improving customer retention and boosting sales. The extreme oil sale on April 20 found its buyers, and the next day prices climbed back above zero. Just like the $40 coupon ‘issued’ by oil sellers, your company can benefit from fantastic benefits our Loyalty Program offers.