Times have changed for Texaco, as was clearly demonstrated at its recent retailer conference in Birmingham, themed according to the company’s new brand strategy, ’Bright Horizons’. At a similar event two years ago, the programme covered the needs of retailers working on the company’s network of 300 owned and operated sites, 180 tenanted sites, as well as about 400 dealers. This time there were no tenants or site staff. There is no company owned network.
"Today we have only dealers," stresses Guy Vigar, the company’s general manager, retail sales, Europe. "That was the reason we had the Bright Horizons conference - to tell our organisation how we plan to go forward. We badly needed to do this because retailers had seen us taking a lot of action as we re-positioned ourselves as a dealer company. We needed to tell them what we were about. So we spent a lot of money on a big conference - there aren’t many conferences in the UK with more than 600 attendees that stay overnight as well. But we had to put across a new message - to reinforce our new focus as a fuel wholesaler. We have sold our co-owned network, but we now have 800 direct dealers, plus about 250 dealers within our equity and authorised distributor network."
Vigar stresses the difference in mentality which runs through an organisation when operating a co-owned network. "It’s very labour intensive. We had more than 2,700 employees, and therefore lots of people in accounting and payroll. Last year selling our co-owned network was tough, because we had a very clear strategy of where we wanted to be in the future, and we had to take the necessary action to make it happen," says Vigar. "I think and I hope we did it in a fairly seamless way. I don’t think too many people got angry with us. The whole exercise was a massive challenge. We sold 480 sites and most of the staff went to work for the new owners."
Much of the nuts and bolts of this huge operation was handled by Peter Oakford, Texaco’s manager, retail sales, UK: "We had two teams - one was a team of field people looking after the service stations and making sure the staff were treated with respect, and everyone stayed happy and was fully aware of what was going on. We had another team in the office dealing with all our suppliers because, on the other side of the equation there were a huge number of these to deal with - from those supplying maintenance and dry goods to credit cards and so on."
The sites were sold to companies such as Somerfield, Malthurst, Petrol Express, plus smaller independents such as Elite Garages. About 30-40 sites went out of the industry. At headoffice, staff numbers fell by 60.
But for dealers the message from Texaco is very upbeat: "The sale of the coco network affects our dealers in very positive way," says Vigar. "When you no longer have the burden of the big coco network and all the other issues that go with it, the focus is on your dealer network. "That’s where we are now, and that’s why we have Bright Horizons, which stands for everything we’re going to do in future.
"We wanted to have a clear strategy which played to our respective strengths," says Vigar. "Our new strategy, Bright Horizons, is about helping our branded retailers to deliver good products and services to their customers. As our retailers become more successful doing this, so we will also benefit through higher sales and a stronger brand."
The first part of the Bright Horizons strategy is about the scale of 0-10: "This is really the amount of assistance in terms of value-added benefit to customers," explains Vigar. "As a wholesaler, there are two ways of doing it. One could be at zero - we might provide the brand and the fuel to the retailer, but that’s all. At the other end of the scale is a 10 - which means providing things like our website, Texaco Station; training with our mobile training unit; the WE.O.U loyalty card scheme; and business advice. It’s about up-scaling the skill of our area managers, and making sure they can talk knowledgeably about subjects like health and safety and government regulations - adding real value to the retailer.
"We started off by saying where do we think we should be? But there are only two places you can be and that is either a zero or a 10. You can’t be anything else, because if you aspire to being a seven, you’re actually aspiring to be second best."
The next part of the image is the sun - representing communication. "We recognise that communication with our retailers is very important," stresses Vigar. "The rays of the sun are the rays of communication. It’s also supposed to represent the fact that when we communicate we all do it in the same consistent way. Oil companies in general have been very good at internal communication, but not so good in consistently communicating with their retailers. But let’s not forget the Buncefield incident. There was a real need for us to talk to our retailers every single day, to give them reassurance and keep them informed. We did that through the Texaco Station website."
Texaco also works at good communications through its regional Retailer Advantage meetings, the National Retailer Advisory Council representatives, face-to-face meetings with the Texaco area managers, and via the retailer magazine, Advantage News: "We use the National Advisory Council to make real decisions in our market. If we want to launch a volume builder we’ll get their approval before we do it. If we change our business in any way at all, we will get some guidance from them. Unless the NAC says ’we’re happy with this’ we won’t go ahead. And since we no longer have the coco network, it’s much easier to use the NAC as our source of decision-making as there is no longer conflict with any other class of trade."
The last bit of the Bright Horizons image is the three people walking towards the sunset -and that represents ChevronTexaco, the retailer and the consumer: "What we’re saying is that in a typical wholesale partnership like ours, it is recognition that there are three parties involved. What we haven’t done in the past is to measure this," says Vigar.
"So in the future we will be measuring our relationships much more closely, particularly with our retailers. We are doing this on a quarterly basis and will track that right through this year and next year, and make sure we improve.
"We’re using an independent company to do the survey, and we’ll give retailers the feedback. The sort of questions retailers will be asked will be along the lines of: how often do you see your area manager?; do you get a return call from your area manager every time you phone him?; is our mystery shopper programme working for you? All the questions that relate directly to a retailer’s interests."
In terms of the relationship with the end user/consumer - Texaco already measures that through the Customer First programme - a mystery shopper scheme, which looks at the standards of sites and customer service; and the way the customer sees that customer service. We’re very aware that if we allow our standards to slip, because we’re a wholesaler then our brand will be damaged and we’ll never be able to recover from that position without huge investment," says Vigar.
"One of the key things we said at the convention is that we have given our brand to our retailer partners - they are the protectors of our brand in the eyes of the consumer."
Vigar believes that if Texaco is recognised in the industry as having good relations with its customers it’ll mean that people will decide to choose Texaco as opposed to other oil companies. It will also mean it can retain existing customers.
"When you are the largest oil company in the dealer sector, it’s easy for people to take a swipe at you. Our mission is that we want to be the most professional customer-facing company in the oil sector."
Oakford is also keen to stress how great it is not having the co-owned network: "It’s allowing us to get back to the roots of what we do well. We are a good relationship company, with a lot of great personnel. One of the key elements of our offer now is that we are not just a fuel supplier. We’ve taken the best we had to offer from a company owned network, and re-focused that so it supports the dealer - the retailer. We’ve put people in place so that with Texaco you not only get your fuel, you get a full business package. We’ll make sure the field managers are the most professional and fully support the retailer as a business partner. We’re moving more to a business consultancy."
Texaco has similar ambitions to Conoco, with its Jet brand, and is envious of its consistent leading position in retailer surveys published in Forecourt Trader.
"A year ago," says Vigar, "the survey showed that Conoco had stolen a march on everyone and done a good job in becoming very dealer-focused. We are three times bigger, so we’ve got to try three times harder. But in the next retailer survey our aim is to be right up there at the top."