As we near the end of our Race for Volume series, let’s explore the importance of brand. In our analogy of the convenience retailer as a finely tuned performance race car, I picture brand as the shell or body of our car.
Why would a customer choose your c-store over the competition?
Think of a Ferrari. What immediately springs to mind? If you are anything like me, the immediate picture is a sleek, gleaming red sports car that is engineered for speed. The Ferrari exemplifies the ultimate sports car—fast, low, aerodynamic, racy—and the world-renowned prancing-horse logo embodies all of that and more. While the Ferrari competes against a host of other respectable sports cars—Bugatti, Lamborghini, Porsche, Mercedes, Aston Martin, BMW, Audi—none of them quite have the esteem of a Ferrari.
But that esteem was not bestowed overnight. Ferrari worked hard to establish and maintain its image as the preeminent sports car worldwide. The company consistently manufactured amazing cars and pushed the boundaries of engineering to deliver a legend on wheels. Today, few brands have a name as powerful and memorable as Ferrari.
Of course, you know that a brand is far more than just an attractive, unforgettable logo. That’s important, but a great brand can influence customer choice and create loyalty. Branding also plays a role in attracting and keeping the right staff. It can even impact the cost of financing your business. Your brand says something about you as an organization.
Think of your business. What image does it conjure up in your mind? Are you able to clearly articulate what makes your business unique? Why would a customer choose your brand over every other competing brand in the market? Do your employees embody that brand value every day … in every shift … with every interaction? Even more importantly, are you able to measure the value of your brand in relation to the rest of the market? Can you establish how much volume you would gain, or potentially lose, if you changed brands?
We worked with a client whose sites were performing quite well; the company’s market efficiency was above 1 (see Part 2 of this series for an explanation of this important metric). Still, company executives felt that their fuel brand was undermining the rest of their efforts. They had great locations, were recognized as top-notch operators, and their facilities were exceptional. But they were certain that volume was being left on the table.
Kalibrate analyzed their sites and predicted how their volume would be impacted if they changed from a lesser-known, regional brand to a major fuel brand. Our forecast indicated that by making this type of brand change, they would generate an average increase of 35% in gasoline volume.
They made the change, and this increase was realized. Their market efficiency went through the roof, and they finally benefited from their excellence in other areas of the business. They became a ‘Ferrari’ after years of operating well below that level.
It is important to emphasize that changing brands is not always the right thing to do. The operational impact and business case need to be carefully considered. In the example above, it made perfect sense because the client’s fuel brand was constraining the volume, revenue and profit that its sites could deliver.
Clearly, fuel retailing has been made more challenging as the brand associated with a convenience store is becoming increasingly blurred. For many years, it was fairly straightforward; the brand essentially belonged to a major oil company. But now the choice that customers face is extremely diverse and the brand could be the fuel that is sold, the sign above the convenience store or even a partner organization sharing the site’s location.
Each of these decisions on branding needs to complement and represent the very core of what your business is about.
Original article series first appeared in CSP Daily News
Coming in Part 9 of “The Race for Volume” series: A summary of the 7 Elements for fuel and convenience retails success.
Click here to read Part 7
Click here to read Part 6
Click here to read Part 5
Click here to read Part 4
Click here to read Part 3
Click here to read Part 2
Click here to read Part 1