Editor's Note: As part of the 10th anniversary of ExxonMobil's On the Run retail concept, CSP took a look at how and why the model has succeeded, beginning with this look at a franchisee's success and the video tour below on CSPTV. Watch for more in tomorrow's CSP Daily News, and for an in-depth look, watch for the October issue of CSP magazine.
NEW YORK -- Harry Singh owns 40 gas station and convenience store sites in the New York City area; 24 of them are supplied by Mobil, and eight of those feature On the Run franchises. In other words, [image-nocss] he has plenty of data with which to compare the effectiveness of On the Run and the muscle ExxonMobil brings to it.
His eight On the Run sites range from 3,200 square feet to 1,100 square feet, with the smaller stores carrying about 90% of the inventory of the larger. Singh said his first On the Run, opened in 2002, has improved inside sales by 110% annually. Fuel volume has risen to 3.8 million to 4 million gallons per year, improving annually by 102%.
Singh, who earned an International Franchise Association honor in 2006 for his work with On the Run, said the main differentiator for an independent operator is the corporation's buying power. Promotions change every two months at On the Run stores.
It is so difficult to come up with a promotion, Singh told CSP Daily News. If you're a single dealer, you don't have buying power, you don't have leverage, you don't have enough man-force that you can go out and sit down and force people to come to the table. We are able to get all that work done through ExxonMobil, because they can negotiate better deals.
Having ExxonMobil's expertise, resources and leverage lets an operator take care of the most important aspect of his business.
When you have a brand, you can sit back and relax, do your job: serving the customer, making sure the store looks the best, greeting your customers, providing the fresh coffee every morning, Singh said. They can do the rest of the job giving you all the other additional tools, including re-setting the stores, providing the new plan-o-grams, providing the new offerings, promotion negotiation, dealing with the signage, dealing with the POP. It's very important to growing your business, to give customers reasons to come to you.
Singh added some touches of his own to his On the Run sitesgranite bathrooms, and some offerings based on local preferences in locations that range from gritty areas in Brooklyn to upscale leafiness in Long Island. In meetings to discuss Exxon Mobil's customer-service initiative, Pacesetter, Singh has said, What is one thing you can do for your customer that does not relate directly to your profit? They travel the extra mile to come to your location because they know you for something.
Singh said On the Run provides him with a few somethings, such as Bengal Traders coffee and pastries, the promotions, the customer service.
That's where the brand works, he said of Pacesetter. If you do follow all the tools, you can set yourself far different than your competition. You can create that 'wow' factor. People will say, 'I've got to go to that On the Run because I love the coffee offering, they've got beautiful clean bathrooms, the people are great, in uniforms that are crisp and clean.' When you provide all the elements of the offering people are looking for, there's no reason for them to go anywhere else. In retail, it's very difficult to provide 100% of everything, every hour, every day. I think the Pacesetter initiative can help you provide that 99% of the time."
As a multi-site operator, Singh gets a 1.5% discount on monthly royalties, which helped him hire the on-staff franchise specialist ExxonMobil requires when the On the Run store count gets to six or more. In the future, Singh, also in real-estate development, looks at new sites as possible On the Run development.
My preference would be On the Run, he said. My first shot to try to make it work would be On the Run.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.