A Treasure Trove of Wisdom in The Human Library

This year at The NATSO Show, NATSO is creating its own interactive one-on-one learning library that will be filled with experts in their fields.
More
 

This year at The NATSO Show, NATSO is creating its own interactive one-on-one learning library that will be filled with experts in their fields. These experts will be on loan from NATSO’s Human Library for customized learning experiences operators can tailor to their own objectives. Read on to learn from the amazing resources who will be on hand to share their expertise in the library, sponsored by Bridgestone Bandag Tire Solutions.

Social Media Is Changing Habits
When habits are broken they can never be put back together again. Our old habits are breaking faster than ever before and no one even cares about putting them back together. Our cell phones have become the ultimate tools for communication. They are our electronic wallets. In the past, everyone’s wallet held their little black book filled with important phone numbers and addresses. Those phone numbers and addresses were the link to our social life and activities.

Welcome to 2011. There is a generation reading this article that doesn’t know what a little black book is. Well, move over 20-somethings, social media is not just for kids anymore. There are groups and social networks for every possible category of interest you could imagine. Facebook has become our telephone book, our directory assistance, our high school yearbook and our catalog of people we want to know better. When was the last time you spent an hour just surfing on Facebook?

Some of you answer that by saying, “Last night for two hours and the night before that and the day before that as well.”Who knew that surfing Facebook would replace spending time in front of a TV set? Yes, you can get addicted to Facebook. It is one of our new communication habits—and I say new even though it is seven years old. Within that seven-year period, Facebook has attracted more than 500million users, and 50 percent of active users log on to Facebook every day.

Now consider that the average user has 130 friends. Think about the word-of-mouth potential that Facebook offers your business and your social life. Then consider the fact that there are 150 million users who access Facebook on their mobile device, and users who access Facebook via their mobile device are twice as active as non-mobile users. Now the icing on the cake, other than the fact that it is free, is that we have multiple ways to communicate on Facebook as well—via chats, personal messages, wall posts, pokes and status updates.

Although Facebook is the most popular form of social media, there are literally thousands of social media sites. They all have created their niche. Go to ping.fm and look at the various social networks that will distribute your posts with just one click. Before you do anything like that, you better know and understand the network to which you are posting your message.

Twitter has become the other powerhouse social network. The thing you need to understand about Twitter is that it is a mini billboard announcement sent to everyone interested in what you are writing about. That is why it is not uncommon for some Twitter users to have followings in the millions. The key is to have short, frequent messages to let people know what’s happening in your business and in your life. The problem is most of us don’t really want to know everything going on in everyone else’s life.

The next categories I want to mention are the ones with only a local marketing focus, such as Foursquare. The way it works is you download the app to your phone, then the site will reflect only businesses in the area where you are located.

It’s a brave new world. But for this new world of social media you don’t have to be brave —you just have to be willing to try. The rewards for both you and your business can be phenomenal.

Mining Data to Spot Trends
The NATSO Foundation has retained the business research and consulting firm Frost & Sullivan to conduct in-depth research on the truckstop industry to help identify trends. StopWatch caught up with Mary-Beth Kellenberger, the global aftermarket program manager for automotive and transportation at the firm, to learn more.

Can you tell us more about your research?
Frost & Sullivan is conducting a broad, 360-degree analysis of the truckstop industry. The ultimate goal of the research is to put the truckstop industry into perspective by size and growth potential. The research will define the challenges and opportunities that lay ahead and how organization members can best position themselves to succeed in the forthcoming years.

As part of its methodology, the analysis will take into account major market-influencing factors such as the economy, technology, industry best practices, the customer’s environment, competitive environment, economic and political atmosphere (both local and global), and the integrated industries. All major market developments and influences are analyzed and their impact on the market properly assessed. Frost & Sullivan will also conduct detailed investigations into market structure developments and the impact key services have on the current and future development of the industry.

How can operators use data to shape future decisions?
Information on macro trends can provide an insight into the overall volume flow of goods and traffic volumes that they can expect to see across North America and in their particular region. It can indicate where opportunities lie for new locations and which locations will need additional marketing or management to ensure they remain profitable despite future macro trends. Macro trends are also the leading edge of what we can expect five to 10 years out and provide great insight into future services, technological impacts to vehicles as well as service provision.

Can you tell us how the ebbs and flows of one profit center affect the bottom line in others?
Truckstops provide a variety of both interrelated and potentially competing business opportunities. A tight economy has pushed consumers to reduce all unnecessary spending. Many consumers actively seek out cheaper fuel locations and are filling up prior to leaving home and bypassing roadside truckstops for fuel. In doing so, the opportunity to drive sales for food and convenience items is diminished. Alternately, we saw owners extend the time between service intervals on their vehicles as a means of saving money. This happened for both commercial and private vehicle owners. The result has been an increased need for roadside service and on-demand repairs, which truckstop service centers have benefited from.

How can operators better identify and track trends within their specific locations?
The more they can do at an individual level to observe and consciously track their customers’ behaviors the better will be the information foundation on which they can make and justify future business decisions. Vehicle counts, time-of day usage, length of stay, and frequency of visits are all key metrics that need more complex means of tracking, but all are very important for creating and analyzing business case opportunities for new and advanced service offerings.

They should be looking for opportunities that provide incremental, evolutionary service and truckstop experiences as well as the revolutionary events that will transform an industry. Most of the incremental developments are so small that if you are not conscientiously watching, they slip by, and without knowing it, participants can end up two years behind in a service sector because they missed the opportunity to create the founding structure for emerging services. Playing catchup can be costly.

Expanding customer contact and understanding your competition are key factors to understanding the future of your business. However, it can be a challenge and costly to leave your business and investigate every competitive threat or best practices. Frost & Sullivan provides that analysis on an industry basis as well as other macro tools that allow each member to position itself within the industry, identify and evaluate new emerging technology and best practices, and package up an analysis that provides insight into the opportunities that are best suited by business category or business objectives.

Retail Strategies
In the good old days, truckstops could survive on gasoline and diesel sales alone, but today’s operators know things have changed. The one-trick pony of just selling diesel or gas doesn’t work anymore. Truckstop operators’ core product has come under pressure, and operators who rely on fuel sales alone won’t have the resiliency to handle the ebbs and flows of the market.

While truckstop operators may be facing the phenomena for the first time, this is not new to retailing. Other channels, from home improvement (lumber and hardware) to grocery (dry groceries) to pharmacy (prescriptions), have seen their core category savagely attacked by the competition, and truckstop operators can learn from their example.

Years ago when grocery stores sold just dry groceries (their equivalent of truckstops’ diesel and gas), they became more competitive. We saw grocers’ expanding their food offerings to include fresh foods such as produce and meat. With time they have surrounded their central grocery offering with deli foods, flowers, seafood, bakery, meat and even coffee to enable them to sell cheap groceries but make some money in other categories. The core category brings customers to the site, but the other offerings are where retailers can make money.

Based on our research, we see three different categories of truckstop operators today that every location can fit into. There are those leaving the industry—exitors; those who are just keeping their head above water—existors; and those who are excelling and making a good living—excellors. Exitors don’t really know what they are doing and are desperate to leave the industry, while excellors are good retailers who know what they are doing and have a strategy. Excellors also look at their competition and other industries for inspiration and learning.

One of the keys to determine a location’s status is to know the gross sales per square foot per year out of the store. An exitor will have low sales per square foot—say, less than $300, while an existor will have sales up to $700 per square foot per year, and an excellor will have sales per square foot per year in excess of $1,500. We have some stores that achieve up to $3,000 per square foot annually.

As a specialist retail consultant, my goal is to take exitors and turn them into excellors. We have done unique consumer research that helps us get them there. For example, our data reinforces the knowledge that the coffee category is incredibly important for truckers. We all know that, but few of us have an excellent coffee offering. For the truckstop industry, not getting coffee right is like not getting the groceries on the shelves for a grocer. Not surprisingly, we have also found that truckers want to have lots of healthy food options.

Good, relevant consumer research is crucial because it gives operators a direction. That knowledge will help retailers look at the principles and resiliency of each category and optimize their square footage. Other industries have invested in research for years, and the truckstop industry can learn from their example.

So, locations need to determine what sort of truckstop they are—exitor, existor or excellor—and then work out what they want to be.

They can start fundamentally changing how they think and what they do so that the consumer/ trucker — not their supplier, staff or the oil company— is their target market.

The first step we often recommend is to go after the low-hanging fruit — get the retail basics right and then do some research.

Crunch Numbers to Grow Profits
Not only is knowledge powerful, but it can be profitable, too. Truckstop and travel plaza operators have a wealth of information about their customers at their fingertips, and crunching those numbers can help them better understand carriers, their gallons and their contribution to the location’s bottom line.

By examining monthly diesel purchases for each carrier and the discount amount given, locations can calculate the exact contribution to profit for each carrier. The more operators know about an individual carrier’s activity, the better positioned they are to negotiate with that carrier.

Once locations start dissecting the data, they may find they have customers who are getting discounts the truckstop operator had long since forgotten about or that somehow were input by accident. Typos happen and a 2-cent per gallon discount unfortunately can be input as 20 cents. The carrier isn’t likely to bring that type of mistake to an operator’s attention, but hard data will. Discounts not justified by the gallons are a bottom-line expense and should be adjusted.

Many operators have 700 to 1,200 carriers that frequent their locations, so reviewing each account manually would be nearly impossible. Automated reports can allow them to see the data and identify which accounts need attention and which are profitable. Detailed data can also help operators determine where they should target their marketing.

With a location’s permission, PRS can pull data directly from fuel card companies and produce a variety of reports.

Knowing the carrier facts in today’s competitive marketplace is more critical than ever for locations that are focusing on management and marketing strategies to increase their gallons and maximize their profitability.

Play to Your Audience
Each consumer is different, and how you deliver your products has to be flexible to meet their needs. To be successful you must figure out how to deliver your products and services in a unique and consistent fashion. The years when a hot meal could only be found at restaurants, gas at gas stations, and retail products at retail stores has long passed. Today’s consumer can buy spicy chicken wings at a sports bar, gas station orWalmart while they’re shopping.

The world for the consumer has been blurred with little differentiation between retail, foodservice or convenience establishments. Menus from full service, quick service and fast food have all started to look the same, which shows everyone is trying to please everyone. With these broader menus and offerings have come diminished execution and diluted products.

Despite this trend, research shows today’s consumer is looking for more “authentic” food and experiences from food service. What makes you different? What is your customer looking for from you? Is it speed of service, a home-cooked meal or regional foods and services? Your key to success is dialing into what your consumer is looking for, zeroing in on products and execution, and promoting what makes you different and worth the visit.

To determine what sets you apart, you can conduct a SWOT—strengths, weaknesses, opportunities and threats—analysis of your foodservice operations. Examine your strengths and how to leverage them in the eyes of your consumer—is it convenience and speed of service or is it the best handmade burger in town?

Then, ask yourself if there are products that you do not execute very well on a consistent basis. Brainstorm ways to improve the product or consider removing the product. Next, rate your service and consider ways to improve your throughput while effectively managing labor dollars.

When considering additional opportunities, look for gaps in your menu and seek ways to simplify your operations. Can you add a “grab-and-go” component for consumers who are looking for great quality without the wait?

As part of your SWOT analysis, don’t forget to consider your competition. Who and what are you competing against? What is happening in the landscape of your operation—new competition, road construction or simply a diminished labor pool? Your analysis will help you develop a strategic plan to address those threats and be prepared to act.

Whether your foodservice operation is independent or part of a franchise, a thorough analysis can help you make the necessary modifications to drive sales and profitability.

Branding for Business
Joe Bona, president of the retail division of CBX, a full service branding firm, has spent more than 30 years figuring out what shapes shoppers’ behavior. He knows that building a brand can boost business. In one-on-one meetings in the library, Bona will help businesses identify their strengths and discover ways to build on them.

What should truckstop and travel plaza operators know about branding?
First, many people think brands start and stop with a unique name or creative logo. In fact, brands are more about the associations and perceptions that consumers have with a company, product or service. For a truckstop, branding probably has more to do with things like service, convenience and cost/value. Building a compelling experience for the drivers is core to how to build a successful and meaningful brand. If you can create a consistently high level of experience, over time, people will come to associate those attributes with whatever your name and logo.

Can you share some surefire ways to build a brand?
Building a successful brand requires smart thinking and time. If you concentrate on the fundamentals—knowing your audience and delivering an experience that is relevant to them, you are off to a good start. However, too many retailers try to be all things to all people. The best way to build brand awareness and drive loyalty is to become famous for something. You might still carry the same assortment as your competitors, but what is that one thing you can build your brand around—the best sandwich, best cup of coffee, best pizza or best travel amenities that makes truckers go out of their way just to stop at your facility.

How does a store’s layout and design contribute to the overall brand?
Layout can really help make an experience easy and intuitive. When planning a store, you have to balance where you want to locate a category with where a consumer wants it to be. Locating “famous” destination categories for high visibility and easy access helps to create a brand promise—how does design bring it to life along with how the service and execution helps fulfill the promise. Overall, the design needs to be approachable and appropriate for the audience.

How can locations increase a shopper’s planned purchases versus their impulse-driven purchases?
I think this goes back to being famous for three to five categories and executing them better than your competition: “I’ve got to stop at XYZ because they have the best prices on cigarettes and they always have my brand; I have to stop at XYZ because they have the largest selection of accessories and parts at competitive prices; I have to stop at XYZ for a meal because they have the best pies, soups and breakfast combos. You need to stand out from the crowd—be different, be relevant and execute better than anyone.

Jan_Feb_2011Cover.jpg

This article originally ran in Stop Watch magazineStop Watch provides in-depth content to assist NATSO members in improving their travel plaza business operations and provides context on trends and news affecting the industry.

The magazine is mailed to NATSO members bimonthly. If you are a member and not receiving Stop Watchsubmit a request to be added to the mailing list. Not a memberJoin today or submit a request to receive additional information.

Subscribe to Updates

NATSO provides a breadth of information created to strengthen travel plazas’ ability to meet the needs of the travelling public in an age of disruption. This includes knowledge filled blog posts, articles and publications. If you would like to receive a digest of blog post and articles directly in your inbox, please provide your name, email and the frequency of the updates you want to receive the email digest.