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09/01/2012

SA All The Way!

SuperAmerica team strengthens storied brand with marketing ingenuity and team building

Since gaining its independence from Marathon Oil Corp., the team at SuperAmerica has been busy building customer loyalty, engaging vendors and positioning the chain for growth with an array of marketing programs and franchisee initiatives.

With efforts that include a new My SA Rewards loyalty program (See Reworking Rewards on page 36), SuperMom's foodservice innovation and improved local market-put ing, together the SuperAmerica an entirely new team retail has structure as they seek to jumpstart one of the most recognizable store brands in the country. "The last year has been about getting the people right, getting the processes right, reaching out to our vendors and franchisees — and making money while we're doing it," said SuperAmerica's President Jack Helmick, who was hired in early March 2011, three purchased months after Marathon's Northern Tier Minnesota Energy downstream assets. Now a publicly traded company, SuperAmerica parent Northern Tier Energy completed an initial public offering of common units on July 31. The stock is listed on the New York Stock Exchange under the symbol NTI. To reestablish SuperAmerica as a Midwestern regional chain, the former Marathon downstream assets, which include 166 company-owned and leased stores, 67 franchised units, and the SuperMom's bakery and commissary, are now operated from new retail headquarters in Woodbury, Minn. From this base, the SuperAmerica management team is aggressively pursuing franchisees to grow the network. (See Franchising the Brand on page 34.)

"We wanted SuperAmerica to be a Minnesota-based company so that we are more accessible to our employees, franchisees and suppliers and we can know our market better," Helmick said.

The transition away from Marathon Oil's Speedway chain has injected new energy into the 51-year-old SuperAmerica brand. The chain has seen capital investments, including all new in-store technology (see Technology in Transition on page 39), new marketing and merchandising initiatives, and a greater focus on franchisees.

All of these efforts were in place by December 2011, which marked the end of SuperAmerica's one-year agreement to continue operating on Marathon's retail network. Prior to the transition, Speedway supported marketing, accounting, fleet and Marathon's Speedy Rewards loyalty program from its Enon, Ohio, headquarters.

"We have been able to get off to a tremendous start because we started with great employees dedicated to SuperAmerica and a great brand," Helmick said. "Our early goals were to make sure the employees were motivated and to engage our customers."

Upon arrival, Helmick and the SuperAmerica team launched "Spring Clean Up," spending $4 million in capital improvements that included filling pavement holes, restriping parking lots, refurbishing gasoline islands, repainting canopy poles, re-lamping the store interiors, installing music systems and increasing the number of LED price signs and reader boards to highlight the SuperMom's foodservice brand.

"Those initial capital expenditures sent the public a message that SuperAmerica is in it to win it," Helmick said. "And our employees and customers became excited as they saw us reinvesting in the properties."

With several different floorplans throughout the chain, SuperAmerica team members are working to offer a consistent message as they position the brand for the future. Planograms are updated regularly with a new category management process that utilizes supplier category captains who help drive sales and increase profits.

"As a local company [now], we can have stronger relationships with local vendors who are meeting local needs, which puts us in a better competitive position," Helmick noted.

MARKETING & MERCHANDISING

Under the new marketing and merchandising initiatives, SuperAmerica category managers are putting a greater emphasis on new product introductions. A "New at SuperAmerica" product endcap near the register allows stores to introduce new products to customers.

The retailer's wholesale partner, Eby-Brown Co., has supported the new direction, participating in monthly meetings with the entire marketing department and focusing on in-stock position and items with great speed-to-market potential, Helmick said.

"We want to be 'American apple pie,'" the retail executive explained. "Our customer focus groups revealed people love SuperAmerica; they grew up with us and usually refer to us as 'SA.' Our goal now is to surpass our customers' expectations."

Building on the popularity of the SuperMom's foodservice brand, the team is expanding the menu to include take-home items. Last fall, a 27-store pilot offered bread and prepackaged boxes of holiday cookies, doughnuts and danishes.

At the same time, product innovation has taken center stage, as SuperAmerica bolsters the SuperMom's line of baked goods, fresh salads, sandwiches, yogurt cups and other foods to go. Helmick talks to a team player at SuperMom's daily and the commissary group is included in weekly staff meetings, as in-stock position and performance are now key measures.

The retail leader and a group of store managers, district managers and office staff known as "The TTT — Taste Testing Team," visit the commissary once a month to taste potential new products. New products are then sent to the stores one week before rollout so store employees can taste them and relate that experience to the customers.

Last October, the chain rolled out pizza bites, which were well received. The chain also is testing a bagel, egg white and turkey sausage breakfast sandwich and has added breakfast burritos, grilled chicken Caesar wraps and a sloppy joe sandwich. "The SuperMom's brand is a great advantage we have over the competition," Helmick said.

Sales of fountain drinks, sandwiches and the rest of the SuperAmerica offer, including motor fuels, are driven through My SA Rewards, which launched last fall, taking over where the former Speedway Speedy Rewards program left off. (See Reworking Rewards on page 36.)

All of this in-store activity is being supported by local marketing efforts, including a multiyear sponsorship of the Minnesota Wild National Hockey League team, the Minnesota Twins Major League Baseball team and the St. Paul Saints professional baseball team. Fans attending Wild and Twins games are able to take their game tickets into any participating SuperAmerica store in Minnesota for the SA Deal of the Game. This could include cents off per gallon of gasoline or a free cup of the chain's Brazilian blend coffee.

"As a local company, we can make fast decisions on local marketing efforts," Helmick said.

On the gasoline front, SuperAmerica is accepting competitors' gasoline coupons, an idea that came from a store manager. To generate more excitement, the stores double the value of the coupons on Tuesdays, a historically slower sales day.

"Tuesdays are now a really good day for us," Helmick said. "Customers absolutely love it and employees are now reenergized with a great story to tell the customers."

Helmick views the margin hit taken when doubling a 5-cent-per-gallon coupon as an investment in getting customers back into the stores. "We constantly think about what will change customers' habits and bring them to SuperAmerica," he said. "You can't just advertise, 'Please come in!'"

Now, as SuperAmerica reestablishes itself, management is working to better define the brand and position it in the marketplace. The retailer will be communicating its rejuvenation through a social media program, which will include Facebook, Twitter, foursquare, texting and other platforms.

More traditional efforts are being supported by vendors. The executive team is working with suppliers on online coupons, a monthly online coupon club, ATM receipt coupons and commercials to air on the chain's in-house radio program.

"All of this could not have been done without all of the support of the store employees, our franchisees and store support staff all wanting to be the best," Helmick said. "They love the changes they see. A lot of work has been done and they were all instrumental in making this happen."

Franchising the Brand

As SuperAmerica refines its brand, the management team is looking to grow the network through store acquisitions and more franchised sites. The plan is to fill in the Twin Cities market, which holds the majority of SuperAmerica stores, while expanding outside that region through aggressive franchise growth.

To that end, SuperAmerica's President Jack Helmick and his team are talking to existing franchisees about converting more of their locations to SuperAmerica, and working to pick up new franchisees and master franchisees who want to operate SuperAmerica sites.

"We reached out to reestablish the relationship and include franchisees in everything we do, offering our new state-of-the-art systems," Helmick said. "Our franchisees told us they want to be part of a great chain — and that's what we all want. To do that, franchisees need the products, technology and programs available in the corporate stores and the same level of support."

SuperAmerica franchisees are able to fully tap into the My SA Rewards program and participate in all of the chain's marketing efforts.

"Our vendors have given us a commitment to offer the same prices and promotions to both corporate and franchised stores," Helmick said. "That is a critical component of our vendor relationships."

The retailer also helps franchisees with pricebook management and store audits, building and maintaining their pricebooks and offering the services of its own auditing team. Franchisees receive advertising materials and participate in all corporate promotions, and franchised stores are included in the retailer's security monitoring network.

"We are convinced the franchise model is a great one," Helmick said, "and we are excited to have our existing franchisees as partners — and to bring others into the SuperAmerica program."

Reworking Rewards

When creating its customer loyalty program, SuperAmerica had one concern: retain customers who were happy with Marathon's Speedy Rewards — and make them even happier.

Looking to make customers' transition from Speedy Rewards to My SA Rewards as painless as possible, SuperAmerica put together a loyalty program and technology package that was familiar to customers, but better. Stores began transitioning from Speedy Rewards to My SA Rewards in September 2011, as each location received a new point-of-sale package and other technology.

The My SA Rewards program encourages customer loyalty in two ways. Customers receive free merchandise and gasoline discounts for accumulated points earned for every dollar spent (20 points for $1 spent on merchandise or 20 points for every gallon purchased) and for buying promoted products (100 bonus points, for example, for buying a Clif bar).

Participating customers also earn free merchandise (or bonus points) through 15 different clubs in a buy-a-certain-number-of-items,get-one-free scenario. Among the clubs: a foodcourt club, Pepsi club, Coke club, a Tourney cigarette club, doughnut club (buy six, get the seventh free), Reese's club, energy shot club, car wash club (buy five, get the sixth free) and a beverage club.

Reward levels are easily achievable. For example, customers earn any size fountain drink for 900 points, any hot sandwich for 1,200 points and a 10-cents-per-gallon fuel discount for 1,750 points.

To help customers manage and track their point totals, My SA Rewards in-store kiosks allow them to register their cards or update their account information, select rewards, view club balances, create a PIN number, see special offers and more. Customers also may track points online. If a card is lost, a new one is issued with existing points attached to the account.

"Customers told us to go paperless," noted Jack Helmick, president of SuperAmerica. "In the past, they'd buy six items and had to bring receipts back to the store to redeem them for the next purchase. Now, the system is paperless. The cashier can say, 'That was your seventh drink, so it's on us!' It makes the customer feel better and it engages the employee in a positive way with the customer."

For the transition from Speedy Rewards to My SA Rewards, program signage alerted customers to the change and technology was swapped out overnight. Following the technology installation, an employee ambassador worked the store, taking customers to the point-of-sale terminal where the customer's Speedy Rewards card was swiped, a new My SA Rewards card was swiped and the cardholders' information including existing Speedy Rewards points, were transferred to the My SA Rewards card. Not only did customers keep their points, SuperAmerica gave them bonus points on their cards — bringing them to the halfway mark needed for earning free club merchandise.

"My SA Rewards is a very important part of our culture," Helmick said. "The customers love to get more value and the team loves to reward the customers with free goods. Our tagline for My SA Rewards is 'Buy Stuff. Get Stuff Free!' That says it all."

Technology in Transition

In September 2011, eight SuperAmerica stores in Rochester, Minn., had a technology makeover — the start of an aggressive technology swap that saw Retail Business Systems Manager Asa Queen and his team of four full-time and 20 temporary and part-time employees working overtime for the next several months.

In one fell swoop, stores received between two and four new point-of-sale devices, a back-office system, pricebook, fleet program, gas pricing software and loyalty program technology.

After that initial group of eight stores, SuperAmerica moved on and ramped up to switch out 10 stores a night, with four store support analysts and five field technicians working on two locations each evening. By the end of October, all 166 company-operated locations had the new technology. Franchised sites were equipped by the end of November.

"We started from scratch building an entire retail system," Queen said. "It's been quite an adventure. Our strategy was to 'make it vanilla.' We wanted to keep change for our employees and customers to a minimum."

The plan: Select as many out-of-the-box technologies as possible rather than build custom code to develop a solution. To create the technology base, SuperAmerica worked with Impact 21 Group consultants, along with long-term technology partners Radiant, Red Prairie, Kickback Rewards and KSS Fuel Systems, to make the change as painless to customers as possible. The effort paid off, with SuperAmerica retaining a very high percentage of loyalty rewards and fleet customers.

"A big part of our success was tapping into our operations team; their firsthand knowledge and years of experience were a huge benefit," Queen said. One team player, Director of Merchandising Steve Morris, provided such guidance and direction to the project that he became known as "The Office of Transition."

Six business alignment teams (BAT) — loyalty, daily shift report processing, inventory management, store operations management, marketing support and implementation — made up of 62 employees from all areas of the organization also smoothed the transition. These BAT teams met frequently to create new business processes and procedures, which were documented and then sent to a test lab for validation.

Along with driving the technology configuration process, the BAT teams contributed to the creation of a Day One book. The book, holding all of the new processes, was given to store employees during a hands-on, two-day training session. SuperAmerica also implemented a 24-hour service desk to ensure smooth operations for the stores.

"I can safely say no one else has done this. Starting from nothing and rolling out an entire system in eight months has been very exhausting and extremely rewarding," Queen said. "Our technology partners consistently reminded us of our aggressive schedule and the high degree of risk. We consistently reassured them that we would be successful, and through everyone's diligence and commitment, we have built a revitalized SuperAmerica."

Engaging Employees

Since joining SuperAmerica, President Jack Helmick has made the chain's employees a top priority. Among his goals are to strengthen communication between corporate departments and store employees.

Soon after his arrival, Helmick implemented a weekly staff meeting with representatives from each department and reached out to field personnel and store managers with a simple message: "We need to depend on each other — the SA team."

Helmick takes his responsibilities very seriously, especially when it comes to the company's 2,100 employees and their families. "If we don't take it seriously, our colleagues may not be able to send their child to college or buy that car they wanted," he said.

During his first week on the job, Helmick worked a shift in a store to gauge how employees were feeling and how the stores were operating. "I found very dedicated employees who knew the customers by name and our customers knew them."

To strengthen communication with the store-level team, management created "In The Loop," a Monday morning memo that updates store employees on the company's plans and activities. "It makes everyone feel in the know and really helped during the transition from Marathon," he said.

Each Wednesday, Helmick and a store division team visit SuperAmerica locations. Once a month, he meets with a Store Manager Council, made up of managers from each district. The managers are presented a financial update and given the opportunity to evaluate how well the corporate team is doing. "They tell us what we can do better and offer suggestions of programs that have worked well in the past," Helmick said.

SuperAmerica's future, the president stressed, will be built on its corporate culture. "I'm a firm believer in positive reinforcement," said the high-energy executive. "Adversity comes to everyone; how you deal with it is what is important."

To that end, Helmick is encouraging store managers and district managers to run "their" businesses. "We want to develop our store employees so that we fulfill their career goals. To succeed, they need to be engaged in that decision-making process."

That change, he said, happens one person at a time. "It's all about doing what you say you are going to do. If you ask employees to call you if they need anything, you better be ready to support them when the call comes in. It is how you gain their confidence."