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Ever notice that the world is full of experts who have never actually done what they are "experts" at?

Many a business professor has never actually managed a business. Most business courses stress defining business terms but never actually teach the concepts of running a business.

This blog hopes to teach some of the terms and, at the same time, give some examples and lessons on running a business.

There will also be reviews of books on business listed here. Sometimes companies give me books to review. Regardless of where I get the book to review, I will give my honest opinion. If I was given the book to review I will always disclose that in the review.

I seek to start posting on 02 January 2012. Some of the posts will be recycled from some of my other blogs.

The reader should know that there is no one “Right Way” to conduct business that will apply in all situations. This blog is meant as a place to start. It is hoped that you will perform further research and consult professionals experienced in your particular business before making any important decisions.

11 July 2012

Exxon Doesn't Have a Clue

Exxon Doesn’t Have a Clue

Once upon a time, larger oil companies, like Exxon, owned and operated retail outlets. This was a learning experience for them. Mostly what they learned was that they could not make a reasonable profit by their standards, so they got out of retail.

Now, these same companies, Exxon, Conoco Phillips, and others, have decided that somehow, even though they failed miserably at making a profit, they know how to tell retailers who have been in business for years and making a living along the way how to operate their stores.

Exxon and the other retailers have forgotten that Mom and Pop made them what they are today, not the other way around. If it weren’t for Pop fixing cars down at the local fillin’ station, no one would know what an Exxon was. People bought Exxon gas because that is what Mom and Pop sold, not because it was Exxon gas.

Years ago stations flew flags such as Enco and Esso. These later became Exxon. Exxon and Mobil merged and became one of the largest companies in the world, yet they still haven’t gotten it right. They think that we buy gas from Exxon Mobil because of something that Exxon Mobil does right. Nothing could be further from the truth.

Way back when, Mom and Dad would load the car up with their 2.5 kids and hit the road for a “road trip.” They had gotten a gas card for Esso or Enco because Mom and Pop sold that kind of gas and it simply made it easier to pay for the gas once per month. They would start out down the road and keep an eye out for the local Esso station so they could use their card.

Most people are loyal to one station or the other. On their way to or from work they will fill up with gas and maybe get a cup of coffee or a soft drink. When they go in the convenience store they may or may not know the name of the cashier, but they know they will get a good product at a good price. It really doesn’t matter what brand of gasoline is sold outside since most pay with a bank card rather than a gas card.
Somehow big companies like Exxon think that you, the consumer, will suffer if Billy-Bob behind the counter isn’t wearing a shirt with Exxon embroidered on it with a “Hello my name is Billy-Bob” name tag. Did you ever leave a store and say to yourself, “I am not going back in there because Billy-Bob did not have on an Exxon uniform and name tag?”

Now we all want to find a convenience store that is clean and well-lit; that goes without saying. We all want a fair price for what we buy and we want everything to be fresh and clean. But, is it really so important to us that our trash can has the word Exxon on it? Is it really important for there to be no handwritten signs on the location?

Some MBA at Exxon decided that all stations had to have a minimum of 4 fueling points. That is, there had to be at least two Multi-Product Dispensers (MPDs) at each location. An MPD is that unit that has a hose or sometimes two on each side that can fill two vehicles at a time. It is what most people call a pump. Well, somehow Exxon and the others decided that unless there were at least two of them at a location they would not allow that station to sell their brand of fuel. I have seen some pretty crazy configurations to squeeze those two MPDs into the limited space they had. Most of the time, for locations with limited space, only one MPD can be used at a time since the two are so close to one another that it is impossible for two vehicles to fit.

Most of these companies employ mystery shoppers. Some of the companies, like Market Force, employ shoppers with a little bit of common sense and intelligence. The company Exxon uses does not. The family I work for owns stations with several different brands of gasoline. When Exxon does a mystery shop, it is a joke.

We have seen where mystery shoppers working for Exxon took a picture of a computer printed sign that was posted on an MPD. This would be the same MPD that the mystery shopper pumped fuel out of. They would write up that there was a handwritten sign on the pump that said the pump was out of order. Do these people not know how to read?

One of the stations has no food service what-so-ever. No coffee, no fountain drinks, and no heat-and-eat meals at all are offered at this location. However, mystery shoppers from this company have written up that the food service area was not clean. Guess what, we can’t clean it if it doesn’t exist.

At one of the locations the candy is all the same price. A sign on each shelf reads “Candy, All King Size $1.39, all Regular Size 99¢.” The mystery shopper working for Exxon wrote it up as not being priced. All the coolers in the location have the price of the soft drinks posted on the door or on the shelf in front of the soft drink. Yet somehow Exxon mystery shoppers can’t find the price.

I have a challenge for the Exxon officers and board members. I think Old Rex Tillerson and the rest of the group should sign up with their mystery shopping company with assumed names and then go out and actually conduct mystery shops and turn them in as if they were just ordinary shoppers. This would do two things. First, it would allow them to see firsthand what it is like out in the field and second, it would allow them to know how what they report is interpreted by their mystery shopping company. I think both would be an eye opening experience.

It would seem that Exxon, since they seem to think that it is important for all employees at all Exxon branded stations wear Exxon logoed shirts,  that Exxon should foot the bill for these shirts. They should give them free to all Exxon station employees and pay to keep them clean.

Poor Mom and Pop, or Maa and Baba as is often the case, should not have to foot the bill for all the things that Exxon finds important. Exxon should create a program to improve the look and function of all their stations. They should provide grants to each store to bring it up to Exxon Standards. These grants should go to upgrade the location like repair roofs, upgrade restrooms, replace signs and canopies. Exxon should repave parking lots and provide landscaping. They should retile floors, remodel interiors, and upgrade fuel delivery systems like the Veeder-Root and MPDs. In short, Exxon should improve each Maa and Baba station on its own dime. There would be no cost to the location as long as they remained an Exxon affiliate for at least five years after the remodel is completed.

What do you say Rex? Are you willing to put your money where your MBAs’ mouths are?

The opinions or advice listed in this blog or website should be used as a place to start only. It is not a substitute for the use of a professional.
Please be sure to consult your attorney and/or accountant with any specific questions.
There is no one right answer to any business question that will cover all circumstances.
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