RETAIL OPERATIONS call for one international fleet card company, the following was stated, “We saw strength in new customer acquisitions and our attrition rate remains at extremely low levels driven by our continued focus on the value we bring to our customers. We also continue to add income from customer fee revenues.” This statement illustrates the obvious: you must charge fees to make the ROI. So where does this leave the petroleum marketer who owns sites and may (or may not) belong to a reciprocal cardlock network? In order to compete you should make sure you have a universal card product in your tool set, and then begin a systematic approach introducing the option. But remember, as we previously noted in Share of Wallet—Fact or Fiction?, we do not recommend that you give every customer this card. In our opinion, the first order of business is to begin assessing your customer’s needs through retention calls. In a recent training clinic with a marketer, we called several of their mid-sized customers only to discover that many had other divisions not being served by the marketer’s cards and/or they had been acquired by another company outside their area who was beginning to consolidate the fuel purchasing. In each instance, we were able to introduce the universal card option and explain that we were more than capable of meeting their expanded needs. This represented not only an important chance to retain volume; it resulted in the opportunity to grow volume. The key is to ensure you illustrate to the customer why your cardlock (or directly owned retail) locations are the optimal fueling environment and that you provide a unique solution not available through the national fleet card options. In addition to having highly controlled and efficient fueling environments, you offer a competitively priced, fee-free option in these locations because you are the actual distributor of the petroleum products. Advise them that the goal is to drive as much of their volume through these optimal locations, and then defer to
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Share of Wallet—The Rest of the Story
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The key is to ensure you illustrate to the customer why your cardlock (or directly owned retail) locations are the optimal fueling environment and that you provide a unique solution not available through the national fleet card options.
the less efficient, poorly controlled, higher cost retail locations when the better option is not available. In the end this will provide the greatest value for their company, and for yours. This approach would be exactly the same when targeting a new customer. It effectively differentiates you from the majority of the competition in the market. You will also notice that this strategy maintains the principle marketing message of “cardlock locations are better,” so you won’t be reversing your long established value justification in your market. It elevates your locations and diminishes the broader retail fueling option. I’ve repeatedly used this technique to successfully convert customers from the national card issuers, some buying as much as 250,000 gallons a month. With larger customers, you will also find yourself introducing cost plus pricing as an option. This option is very unique to the petroleum distributors and their reciprocal fueling networks. When rack to retail spreads are $0.50 and the customer is saving $0.35 per gallon, the $0.02 discount the major card issuers are offering becomes almost laughable to those fleets who understand how the business works. A final consideration before you jump into the universal card world is to ensure your billing system has the necessary functionality to support your strategy. FMNMagazine
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Most systems are weak when it comes to this environment. In some cases, how they price these transactions can actually extend your losses. For example, one universal fleet card product is accepted in Arco locations where the marketer’s cost is actually 101% of the retail price. Some systems are pricing the transactions at retail, not recognizing the net loss until it hits the P&L. In other instances, the ability to charge fees is very limited and can’t be assessed based on transaction type or merchant locations. Our recommendation is to conduct a detailed review of your system’s functionality according to your objectives, and then thoroughly test with beta customers before jumping in with both feet. You can always call our company for advice in this area.
If you follow these recommendations, we believe that you will enjoy a rewarding business opportunity in the universal card world. n
Shane Dyer Shane is the president of PowerUp Fleet, Inc. He possesses over 32 years’ petroleum automation, operations, and executive management experience with a focus on commercial fleet fueling and cardlock networks. PowerUp Fleet, Inc. provides sales force automation/CRM solutions specific to the petroleum industry along with sales training, sales management and executive consulting services. Contact: (541) 388-5120 or shane@powerupfleet.com and visit PowerUp Fleet at: www.powerupfleet.com
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