Service and standards are under the microscope as the Jet brand pursues excellence across its 540-strong dealer network with a programme called ’HI’.
With a UK-wide marketing reorganisation at the company’s head office in Warwick completed earlier this year, the ConocoPhillips marque has embarked on an ongoing brand audit to discover the strengths and weaknesses of its operation, and in so doing, provide a useful tool to help its dealers maximise their businesses.
The new regime is being driven by the company’s need to keep its nose ahead of the other fuel brands that are gradually beginning to follow the Jet way of thinking. After all, the Jet brand has always come head and shoulders above everyone else in the PRA’s bi-annual survey of dealer opinions on oil companies. With scores such as 92% for dealers who consider their relationship with Jet to be ’good’ or ’very good’; and only 5% wanting to switch brands, Jet has consistently set the benchmark in the industry for its supportive approach to dealers while others have fluctuated. Now it is raising the bar again, according to retail marketing manager, Patrick Hudson.
"You can’t just develop a culture by saying it - it’s something inbred that you have to constantly work at, and it takes years to do. What I think retailers do remember is that we’ve always been there as a dealer-dominated brand. While adapting to structural market changes we have been consistent in our approach to dealers, and we’ve always told a straight story. And that’s why we’ve always had these high ratings in the PRA dealer survey.
"We recognise that predominance in customer focus and relationships is our unique selling point and we aim to put even more focus on it. We see a lot of competitors trying to come through to where we are and follow us. I think our message is that we will stay ahead of the pack. We deal with 15 of the Forecourt Trader Top 50 Indies and we’ll be looking closely at reinforcing those relationships, and developing new ones. But we’ll never forget the smaller-based retailer - our bread and butter - we’ve got some excellent best-in-class retailers there. And it’s a great network that we are proud of with the average Jet site now selling in excess of three million litres a year."
Meanwhile, a reduction in total UK marketing headcount from 145 to 115; rationalisation of ordering and distribution centres from seven to two; and some fresh faces at field staff level, have been a major part of honing the UK marketing operation within the past year.
GOODBYE TO SMILE
Another significant step by Jet was withdrawing the Smile campaign.
"It was a difficult decision because it was among the best - if not the best - in the industry," stresses Hudson. "However, there were a few issues such as the philosophical issue - is loyalty really necessary? These days we believe petrol retailing is more location- and service-driven than loyalty-driven.
"The Smile promotion was only really in 60% of our sites; and in those sites it wasn’t being consistently applied. We had some best-in-class advocates of Smile and some weaker performers. It’s difficult to apply a loyalty programme consistently with a dealer-only network. So we took the bold decision - following consultation with our dealer council - and did our utmost to handle customers and our retailers as fairly as we could.
"We had a fair amount of customer reaction. However, we have done what we can to settle things consistently and amicably with motorists. And with our Jet retailers, if redemptions weren’t made, in the majority of cases we reimbursed people for the amounts that weren’t redeemed. Inevitably the reverse was also the case with a small number of our sites where redemptions were high. We also rewarded our sales assistants who had excelled in handling the irate customers. We communicated the end of the promotion heavily on sites. We gave people extra time on their redemptions, because legally you’re not obliged to give more than 90 days. We bent over backwards to make sure we didn’t damage our customer relations, or, perhaps more importantly, their relations with those in the customer frontline."
As it turned out, the impact on volumes was negligible, according to Hudson - probably less than 1% across the total Jet network, accepting that in the case of a small number of Jet retailers it may have been more than this. And the retailers have more margin because they’re not being charged for a promotion.
"Giving up Smile was bold, but I think it was the right thing to do," he says. "Now we have launched the HI programme, which is largely about standards and service. There is no point in running a promotion unless you’ve got your standards and service to a level where it’s going to be consistently high."
Lindsey Grant, Jet’s marketing manager, business improvement, describes HI as a system of measurement that will assess where the company is now, so the dealer’s got the information he needs to be able to improve his site.
"We’ve been asking our customers via an online questionnaire what their experience on a Jet site has been like. The incentive is a prize draw every quarter - the first quarter (from January to March) the prize was a car. For the second quarter, following feedback from dealers, and to encourage greater response, we are introducing regional prizes. For each of our eight regions the winner will get £1,000-worth of free petrol."
There are four elements to the HI programme: customer feedback; a Suresite safety audit; a mystery merchandiser visit; and a brand assessment performed by a regional manager. "That gives us a range of feedback from different angles about site services and standards," says Grant. "And we are sure it will give the dealers a good feeling about where their business improvement opportunities are.
"If our dealers get good scores in these categories they get bonuses to share with their staff. Also there’s a league table at the end of the year, and there will be a recognised reward system. There will be up to £1,000 per dealer site on the table each year as an incentive for dealers to do well."
Hudson says the challenge for all oil companies in the dealer market is how to keep standards up. "Running company-owned standards programmes is easier in that the oil company owns the asset and is better placed to control what happens on it. You cannot tell people what to do in the dealer market - dealers need to be persuaded and see business sense. If a dealer has done well, he will get a certificate to display, and where we can we will get the local press involved.
"But the incentive is the tip of the iceberg. What we’re saying to dealers is, if you get your standards and services right, your business is healthy, it grows and does well - £1,000 is nothing compared to the prize that’s out there for those sites that are getting it right.
"Our research has proved that, on average, those who are getting it right and move to the best-in-class can earn about £9,800 a year extra in net margin improvement to their business. The top dealers increased their business by 16.5% over a particular period. So we’re looking at a clear commercial advantage."