southwest georgia oil targets new markets

New Sun Stop prototype appeals to women, elderly shoppers.

Getting more stores and giving better customer service are two tried-and-true ways to boost c-store profits, so when Southwest Georgia Oil Co. (SWGO) decided to grow its business, both tactics made the short list. But a third—and much less conventional—approach seems to be working even better: targeting women and elderly shoppers.

“We were spending a lot of time and energy marketing to the Bubbas of the world, but weren’t targeting women and older shoppers, two market segments c-stores frequently miss,” said Aaron Goodman, the chief operating officer for the Bainbridge, Ga.-based oil company. To remedy this oversight, about six years ago SWGO had Atlanta retail design firm Antista Fairclough design a new prototype for its Sun Stop c-stores that offers a much more open, airy and welllighted environment.

Today, 12 of the of the company’s 27 Sun Stop convenience stores are prototypes. All feature a protective T-canopy that shelters customers en route to a full glass front with backlighted fascia. Inside, ceilings two feet higher than usual are banded by paintings of clouds that surround huge central skylights.

“Brighter, well-lighted stores make a safer environment,” Goodman said. “We still get the blue-collar customers, who are the backbone of our business, but we also find that women and elderly customers feel more comfortable shopping now.”

To further enhance security, the company has also installed closed circuit TV and time-lock safes in all its stores.

Hefty Investment
Goodman acknowledges that the prototype stores are expensive to build— about $500,000-$700,000 more than a traditional c-store—but said they outperform the company’s other retail outlets in sales per foot and volumes by 15% to 25%.

In addition to their more enjoyable environment, Sun Stop stores offer an upscale product mix that includes a nice selection of wines, F’real milkshakes, Jelly Belly jellybeans and a variety of healthy snacks. Signage above dispensers makes finding products easy.

Goodman notes that focusing on upscale, high-profit areas and creating proprietary products increases brand identity. Sun Stop beefed up coffee sales by rolling out its own “Sunshine Coffee” brand that features various gourmet blends and real milk products instead of powdered creamer. The company also does a brisk business with its proprietary “Sunshine Bakery” chocolate chip, oatmeal raisin and macadamia nut cookies, which are baked fresh three or four times per day.

“Cookie sales average about 30 units per store per day,” Goodman said. “At 99′ each, that translates to $30,000 in incremental sales.”

Acquisition, Expanded Property Use Boost Revenues
In addition to furthering sales through its prototype stores, SWGO is presently working on acquiring another c-store chain with 21 outlets and pursuing better use of contiguous property. Four of its stores presently have carwashes, and Goodman expects four more will be added by year’s end; the company just installed its first “Ice Stop” bulk ice dispenser that delivers a 20-pound bag of ice for $1.50.

To further enhance its brand identity, SWGO turned its transport fleet into rolling billboards that feature full color pictures of its upscale proprietary products. The company operates stores in Georgia, Florida and Alabama, netting a large passive audience for advertising messages.

“We’ve made every vehicle in our transport fleet a moving ad,” Goodman observes, adding that SWGO plans to offer its vendors the opportunity to share the advertising benefit by featuring their products as well.

The marketer pumps E-10 ethanol blend at all locations, will offer E-85 in Florida beginning this month and is a major shareholder in ethanol refinery expected to produce 200 million gallons per year. Goodman said that SWGO President and CEO Mike Harrell is the driving force behind the company’s renewable fuels push, which includes building a biodiesel facility expected to pump 10 million gallons per year. (See “Pursuing Alternatives,” p. 28.)

Service Driven
Customer service is the biggest brand builder of all, according to SWGO Director of Training Sean Hader. “Frontline employees are number one asset we have,” he said. “Customers are a very close second, but without great employees, we wouldn’t have a company.”

Hader notes that the company used to let individual managers teach new employees the basics, but decided to standardize training several years ago. Every new employee is required to attend basic training within a month of being hired. Classes are held in four cities to ensure that new hires don’t have to drive longer than 45 minutes and students receive 25′ per hour pay increase upon completion.

SWGO’s basic training covers company history, customer service, store cleanliness, team member appearance, alcohol and tobacco, loss prevention, safety, security, robbery deterrents and benefits.

“It sounds military, but I call it basic training because it covers the basics we expect of them and the basics they can expect from us,” Hader said.

Bridging the Expectation Gap
There is frequently a huge initial gap between what associates believe constitutes great customer service how the company defines it. “We expect our employees to provide ‘outrageous customer service,’ but the reality is that most of the people who come to work for us don’t know what great customer service is,” Hader said. “Most have never stayed at a five-star hotel or eaten in a five-star restaurant, so their vision of customer service and ours don’t match.”

Making employees’ vision match the company’s vision is what training is all about. “Good customer service means treating every customer the way you want to be treated,” Hader said. “Outrageous customer service means treating every customer better than you want to be treated.”

Hader cites three conditions of employment with SWGO: Every associate must greet, plus sell and thank every customer.

Hader also points out to new employees that they will spend the majority of their waking hours at work. “I tell them, ‘If you don’t enjoy this, find something else to do; otherwise, you will look back on your life and think it was miserable,’” he said

Basic training emphasizes the “Yes, Sir, No, Ma’am, Please and Thank You” basic tenets of respect and excellent telephone etiquette. As a result, Hader said some vendors have told him they could hardly believe they were calling a convenience store because associates answered the phone so courteously.

Mystery Shoppers Bring Rewards
To keep employees on their toes, the company sends mystery shoppers to every store twice a month seeking the “Outrageous Customer Service” it desires. There are monthly sales contests for associates with prizes such as a pizza party for the associate and a group of friends, or a $100 gift certificate for a local mall. The associate with the biggest overall sales gets to participate in the monthly managers’ meeting, arriving in a limousine.

Managers benefit as well: The top manager from each of the company’s four zones receive a substantial reward at the end of each year. Last year winning managers received new Jeeps.

“The bottom line is that if you are courteous, respectful, customers will reward with continued patronage, and continued patronage is what it’s all about,” Hader said.

Pursuing Alternatives

SWGO expects to refine and pump biodiesel by early 2007.

After Katrina’s major disruption of petroleum refining and distribution last year, Southwest Georgia Oil CEO and President Mike Harrell wanted to expand his company’s alternative
fuel offerings. Harrell, already involved with an ethanol refinery, decided to build a biodiesel refinery as well. The necessary equipment is on its way, and the company will break ground as soon as the development authority gives clearance for the Bainbridge, Ga., site.

Harrell expects to pump the company’s first gallon of biodiesel in early 2007. The product, made with virgin soybean oil from a Valdosta, Ga., crushing plant, should be pretty easy to sell on the open market, Harrell notes, because most retailers want to offer their diesel customers at least a B-5 blend.

“We’ll offer B-100 to other blenders, and probably start offering retail customers the finished product at B-10, with a goal of B-20 when market acceptance and competitive pricing coincide,” Harrell said.

Harrell foresees Inland’s alternative fuels comprising at least 15% of through put sales within two years. Does he also foresee putting straight waste vegetable oil Inland’s fuel menu as well? Maybe.

“Tax credits for recycling waste vegetable oil are not quite as good as for virgin oil, but if WVO becomes a viable market option, I’m confident we can reconfigure our refinery to handle it,” he said.

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