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Imagine yourself as a company executive in a new country (this should be relatively easy). The rules are different, but your goals are the same. Build profits and streamline costs. Finding the best solutions for improving your company’s bottom line is not a simple matter in a domestic environment. Will you increase your profitability and efficiency or will you fall prey to the competition?

Wherever you are in the world, building sales requires teamwork, experience, and creativity. We know. Corporate Marketing, Inc. has been providing winning solutions to companies like yours for over 25 years. Our professionals have years of experience in developing and managing international, multicultural sales-building programs, and we consistently help our clients achieve their goals at the most competitive project fees.

But don’t take our word on it. Read for yourself.

On the following pages you’ll find a fascinating case study of one of the most successful programs for building brand sales, enhancing performance, and improving productivity. After you’ve read the case, ask yourself this: “Could Evans CM provide me with solutions that will help my business prosper?”

If you answer “yes”, you’ve discovered the ultimate tool to increase profits. We urge you to give us a call at your earliest convenience, because frankly, why go on safari without us?

 

Case Study

Company: Caltex Oil (SA)
Program type: Incentive Marketing with a focus on Customer Service
Goal: Improve profitability
Strategy: Customer service improvements
Key elements: Communication and training, measurement systems, on-going program redevelopment, recognition precognition processes.

Overview

Caltex Oil’s network of service stations operate either as franchise sites or independent two-party dealerships.

Caltex Oil’s franchise department provides franchisees with access to the kind of initiatives they would not be able to afford or administer as independent sites. Its objective is to provide the resources necessary to develop meaningful strategies that achieve set business objectives.

 

Situation Analysis

Given that the government dictates the price of petroleum products in this country, oil companies are unable to compete through pricing policies. Their products, too, are fundamentally the same. They’re aware however, that market share determines profit and are thus hungry to claim the lion’s share of this market. Major companies, including oil companies have identified a way to develop long term Brand Loyalty while pursuing a greater share of the market is to provide superior customer service to the consumer. This factor is controllable!

Caltex Oil’s franchise policy provides the ideal environment to promote improved customer service. Caltex Oil decided that it would be pertinent to promote a standard level of service excellence amid all franchised service stations.

 

Goals

The primary objective of designing, implementing and managing an incentive program within the Caltex franchise network was to achieve increased profitability for individual franchise sites and for Caltex Oil. This would be achieved by promoting improved customer service throughout the franchise network.

Intangible benefits of the incentive program included:

• Improved morale and teamwork at Caltex franchise sites
• The creation of a communications vehicle for the franchisees
• The motivation of franchisees and staff to make a greater commitment to the success of their businesses and that of Caltex Oil; and
• To give franchisees and their staff the feeling that they were sharing in the pride and success of the organization by helping by helping Caltex achieve its business gaols

Strategy

A Corporate Marketing firm was commissioned to design, implement and manage a highly sophisticated customer service program designed to motivate improved service levels at all franchised sites.

Over the years, this initiative was carefully developed and communicated to produce the most efficient levels of service from franchisees and their staff. It included comprehensive training aids and motivational material for franchisees and forecourt attendants. Participants were rewarded for delivering improved service. Caltex and dealerships also designed incentive program for easy management. All program development, communication, administration, and fulfillment were carried out by the communications project management firm.

Structure

The initial program began in 1998. The initiative has been revised and improved a number of times. By 2005, Nielsen figures showed that the Caltex Franchise network overtook its nearest competitor, as well as non-franchised Caltex sites to achieve industry leadership.

The initial franchisee program

The initial program targeted the operators of franchise sites. These people were rewarded for offering good service, as measured by the public.

Measurement was based on defined service factors which were perceived as crucial to service excellence as well as sales growth. It was a bilingual program and included merchandise rewards – selected from a customized Award Catalogue – and a top group travel prize for the best performers.

Forecourt attendants

While the initial dealer program was successful, it also served to emphasize a crucial shortcoming. Although franchisees were ultimately responsible for the profitability of their business, they were not the individuals delivering the service to the consumer. The forecourt attendants were identified as vital to the service excellence equation. Thus the Caltex Incentive Program for forecourt attendants was initiated.

Forecourt attendants were rated – by the franchisee – against defined service criteria. These standards included prompt attention, friendliness, speed of service, cleanliness, accuracy, punctuality and so on. The service criteria were communicated on a pictorial poster. Measurement was conducted internally and each service station produced a top attendant for the month. Larger sites awarded more than one winner per month. Because of the low income earned by this target group, cash awards were issued to winners. This program proved that incentives assisted most sites to achieve improved service. Analysis suggested that several format changes would make the program even more effective.
Training elements introduced

The study showed that increased training was necessary to educate the forecourt staff about customer service and the impact that good service would have on them and their business. The Corporate Marketing firm revised the incentive program to include extensive training schedules. Dealers were issued with guidebooks on how to train their forecourt. An exam was designed to test forecourt attendant’s understanding of the objectives of the incentive programs and the criteria for good service.

Measurement periods were shortened from one month to three weeks and the value of individual cash prizes was reduced, while the number of recipients of prizes increased. Recognition certificates for good service and for passing the exam were issued. These proved extremely successful.

Mystery motorist measurements

The following stage of the incentive program introduces a new dimension to the measurement system. Research organization, AC Nielsen – known at that time as Market Research (MRA) – were commissioned by Caltex to issue independent report on the service performance at franchised Caltex sites.

The Nielsen measurement system introduced objectivity into monitoring service levels. Caltex Service Station franchises were rated by Nielsen twice monthly. This meant that a “mystery motorist” visited each station every second week and judged specific elements of service. Franchisees were given results immediately, enabling them to provide forecourt attendants with feedback and offer extra training or praise, where due. Nielsen also provided the Corporate Marketing firm with the opportunity to define common problem areas. These issues could then be addressed though special training courses or in the communication elements of the incentive program.

Midway through this stage selected merchandise prizes were offered to supplement the cash prizes awarded. Items included small electrical products, household appliances and small luxury goods such as a camera or mobile phone.
This new development reinforced the objectives of the incentive program, and brought in a vital recognition element, needed to boost the cash awards. Further communication, featuring a cartoon type character call “Wooshman”, was distributed to advise forecourt attendants of the new prizes on offer and to give them additional training.

 

Franchisee involvement returns

At this, it became apparent that the incentive program for forecourt attendants would benefit greatly from an aligned initiative designed – once more – to motivate and reward franchisees for the important role they played in training and continually encouraging their staff to achieve improved service.

The primary goal of the initiative for franchisees was also the achievement of service improvement across the Caltex franchise network with the intention of helping Caltex become the industry leader.

By steadily improving monthly service ratings, franchisees were offered the opportunity of winning a selection of 2,550 prizes of tempting travel, marvelous merchandise and valuable high street store vouchers. These were displayed in a special customized Award Catalogue.

Service levels were again measured by the “mystery motorist”. Franchisees were also rewarded for improved monthly “housekeeping / sparkle” standards, measured according to set criteria, on a monthly basis. By improving monthly service levels, and ensuring that their service station was always in tip-top condition, franchisees were given the opportunity of winning great prizes while increasing their sales and profits and improving the long term brand value and identity of Caltex.

 

Broader training initiatives

In the meantime, Caltex also realized that there was a huge need for further training on the broader issues regarding service, amongst forecourt attendants.

For this purpose, an exclusive training – launch video was created to launch the revised incentive program for forecourt attendants. The video used humor and drama – in a situation – concept of customer service and the Nielsen measurement system was accessible to all forecourt attendants in the Caltex network.

Research, conducted among franchisees before the program was revised, suggested that previous communication – conducted in Afrikaans and English – were not completely effective for all forecourt attendants. Further to this finding, the Caltex training – launch video was filmed in Xhosa, Sotho and vernacular Zulu. English subtitles ensured that dealers could understand proceedings throughout the video. It was scripted and directed with great care to make the update incentive program accessible to the majority of forecourt attendants.

Introduction of team rewards

Another change to the format was that this updated program issued cash rewards to forecourt attendants as teams. This addressed a perception, amongst participants, that the previous initiatives favored individuals. The revised rules encouraged forecourt attendants to improve service levels, in the knowledge that their performance affected the whole team.

However the incentive program still acknowledged individual excellence. A range of merchandise prizes was again on offer to successful individuals.

Awards

The Caltex Incentive Programs addressed two different groups of people. Forecourt attendants earn low salaries and were issued cash rewards. They were also rewarded with a selection of merchandise. This included items such as a mobile phone, a cordless kettle, an iron and high street store vouchers.
Certificates

Certificates were issued at certain stages during the incentive program for forecourt attendants. These elements of recognition were very well received.

All rewards for the incentive programs of the dealers were paid out in the form of performance points. They were redeemable for a large range of merchandise, high street store vouchers, and travel which were displayed in the Award
Catalogue.

Give the diversity of people involved in the incentive program for franchisees, the Award Catalogue was selected as the most effective fulfillment option. The large variety of awards ensures that there is something to motivate everyone. Its attractive presentation encourages participants to page through it, alone or with their families. This increases its motivational impact and acts as a constant reminder of the rewards on offer for continued performance.

In addition to the cash payouts and merchandise prizes on offer to both parties, the Caltex Incentive Program rewarded top teams by issuing invites to the prestigious Caltex Service Star Banquets. These Banquets, which were held in five regions throughout the country’s best forecourt teams and franchisees at gala occasions that included partners and other VIP guests from
Caltex Regional Offices.

In the future new initiatives are likely to include group travel opportunities for the franchise Dealer Principles, once again giving Caltex the opportunity to extend the current training initiatives to include these key individuals.

 

The Theme

The theme of the original incentive program for franchisees was “Flying Colors”. This colorfully portrayed the aspirations and rewards of the initiative – earning your colors or stripes!

When the program was revised to address forecourt attendants, it was themed the “Caltex Service Star” Incentive Program. It used the Caltex “Star” to encourage forecourt attendants to, in turn, be “star service providers”. The second initiative program for franchisees was called “Reach for Rewards”, giving a strong focus to the 1000’s of awards available for selection.

Communication campaign

The ongoing communication campaign for the Caltex Incentive Program evolved along with the initiative. Forecourt attendants were initially addressed through posters. These became increasingly informative and effective. They were highly graphic to cater for the poor literacy found in this group and focused clearly on training.

The training – launch video was surely the highlight of this communication campaign. In addition to this, Caltex Service Station franchisees received further posters and charts to explain the program and on which to display banquet results to forecourt attendants. These posters included illustrations of moments from the video and copy was translated into Afrikaans, Sotho, Zulu and Xhosa. Other documentation included a complete guide on how the program worked, registration forms, audit sheets, prize order forms and certificates.

Details of the updated incentive program for franchisees were presented to participants in a striking launch brochure, which doubled as a dust cover for the award catalogue.

Monthly statements advised franchisees of their progress on the incentive program. Information included graphs showing progress on a quarterly basis, as national averages. In addition, franchisees received monthly bulletins. This newsletter kept participants informed about developments on the program, specials on prizes and news of top achievers. It also provided readers with other interesting and helpful items.

Forecourt Magazine

Regular articles, highlighting the objectives and results of the incentive program, were published in Caltex’s internal Forecourt Magazine to reinforce the recognition element of this initiative. Teams winning places at the annual Caltex Service Star Banquets were also featured in the magazine to further applaud their achievement.

Program Delivery

Like Corporate Marketing, Inc., the communications firm served as a full – service incentive marketing and motivation company that provided a comprehensive, one – source service. The company worked closely with Caltex Oil’s franchise department to achieve successful initiative, which were revised and improved.

The communications firm maintained an up – to – date database of all program participants and maintained regular contact by sending performance statements, circulating additional communications and through the winner hotline service. The company also conducted regular research amongst participants to ensure complete satisfaction with the program at all stages. Highly comprehensive management reports were made available to Caltex. This enabled parties to monitor progress closely and to react to any necessary developments with immediacy.

Summary

Prior to using these incentive marketing initiatives, Caltex management had identified that levels of customer service needed to be improved. With the introduction of these comprehensive training, measurement and reward systems, service levels showed steady improvement and, by the end of September 2005, the Nielsen figures showed that the Caltex Franchise overtook its nearest competitor, as well as non – franchised Caltex sites, to achieve industry leadership.

Furthermore the incentive programs have evolved into an influential reason for two – party sites to join the Caltex franchise network. Independent dealers are recognizing the fact the initiatives are highly effective methods of achieving improved business at their sites.