A few months ago I was musing over whether the concept of loyalty could be applied to the forecourt industry. At the time my comments were mainly focused on our customers and whether loyalty cards per se were a worthwhile proposition. Of course, the other side of the coin is the relationship we have with our suppliers, when we are the customers.
Now I’ve never been one to chop and change my suppliers. Over the years I’ve found good suppliers hard to come by so once I’ve built a relationship, I tend to stick with them. I’ve accepted that, from time to time, there may be someone else out there offering certain of the products cheaper, but I’ve taken the view that the upheaval caused when changing supplier, combined with the uncertainty of whether the new offer will be maintained, wasn’t worth disturbing my existing arrangements. I also had a belief that if you get a reputation in the industry for constantly changing, you eventually find that suppliers aren’t interested in quoting for what they consider short-term business.
I’ve also always thought that showing some loyalty to your supplier brought some dividends when you needed a favour or some preferential treatment. Maybe it’s because of this outlook that I don’t drive a Bentley, but at least most of the time I find my stress levels manageable.
The company that has probably consistently proven my attitude wrong has been Texaco. Over the years that I’ve dealt with the Lone Star (in the old days it was the Loan Star, but that’s a different story!), I’ve lost count of the number of different institutions it has used as credit card acquirers. It seems that every two years it changes and every time it does, it manages to get a much better deal. In addition, perhaps because of the volume of business at stake, it never seems to run out of banks that are prepared to tender.
So it was quite a surprise to find that its latest improved offer had been obtained without actually changing acquirers. Now I don’t know the background to all this. Maybe, because it no longer has its own Star network, it couldn’t generate the same interest this time, or maybe, for the same reason, there wasn’t sufficient financial incentive to really rattle the cages. Whatever the reason, I have to pay tribute to its negotiating skills as they certainly seem to be able to get far better rates than most of the competition. It’s just been a little unfortunate that no sooner had I finished calculating the savings I would make, than the price of fuel shot up and turned all the ink red again!
These are certainly unusual times. When the Platt’s price of diesel can rise by 7.5p a litre in 25 days we can definitely say (by way of passing tribute to Humphrey Littleton) that normal rules do NOT apply. If you’re on a ’rolling daily’ supply deal there have been days when the margin has been less than the credit card cost. Truly an Alice in Wonderland scenario, where it would actually cost me less to give a motorist 50p to drive off and fill up somewhere else rather than do it at my site and pay with plastic!
Combining the themes of Alice in Wonderland, supplier loyalty and Texaco brings me nicely to another of my erstwhile suppliers, Total Oil.
Following the Buncefield disaster, Total seems to have entered into what I can only describe as a ’Nemanich’ phase. Serving notice on all its dealers who have break clauses in their supply agreements, and then offering them new terms that are even more uncompetitive than BP’s - those boys from across the Channel seem intent on instant network decimation. And that includes multiple operators with long-standing relationships. I wonder how small Total’s customer base will become before it suddenly realises that you have to have some volume to cover your fixed costs. Still, Total’s loss will be Texaco’s gain.
Strange how a business centred on motor cars is so affected by cycles!!!