Although the industry average for same-store gallon sales is admittedly low, said Dan Arnold, president, Road Ranger aims to become an industry leader in many more ways than that.
“We are always looking forward and asking ourselves where this industry is going so we can maintain a degree of control over that future and ensure our success,” he said. “Our mantra is let’s be the first ones to reach the future.”
Arnold said most of the time the answer lies in improved back office technologies and processes to ensure that the company maximizes its collections and does not pay more in operating payables and taxes than it is supposed to.
The biggest change for the future of the industry could have to do with customer service expectations and labor costs, so Road Ranger developed a retention incentive plan four years ago to keep experienced, dedicated employees on board. The company awards a percentage of each employee’s gross wages every year, with each award vesting and paying out three years later.
Of course, the recession has challenged many plans for the future, but Arnold said early planning at Road Ranger has enabled it to weather the worst of the storm with minimal impact.
In December of last year, the company rolled out a comprehensive rebranding campaign that started when Arnold asked his team what features of the Road Ranger experience would cause customers to drive by other competitors.
“We initially talked about things like customer service and clean bathrooms, but I said today, those are table stakes; the customer expects them, and we aren’t going to win any new customers by excelling there,” Arnold said. “So we decided we needed to make some significant, long-term investments in our brand to create a retail experience that couldn’t be duplicated.”
First, the company hired Grahan Spencer of Rockford, Ill. to conduct a demographic study of the Road Ranger customer and why he buys gasoline from them. The results led to a relatively inexpensive but significant cosmetic change at all locations that included a new gas canopy with a horse head on top that’s easily recognizable and unique. The company created a new, brighter, and more modern logo and partnered with national diesel fuel giant Pilot, branding the diesel fuel of 23 truck stops under that name. It also rebranded its own gasoline as Ranger Fuels and nicknamed its three levels no-lead, leaded, and premium gasoline as Mustang, Stallion, and Thoroughbred, respectively.
“It’s hard to differentiate such a staple commodity as gasoline, but we’ve had success, so far, by tapping into the romanticism of the open road and tying in the symbol of the wild horse,” Arnold said.
But Road Ranger didn’t stop there. Its second move was to certify all its fuels as Top Tier, a certification supported by a group of auto manufacturers to designate the highest quality gas that allows their cars to run as they were intended to. Not many fuel retailers have all levels of gasoline Top Tier certified, but Arnold said about 20% of the company’s customers are concerned about their car’s performance and the specifications of the gas they use, so the certification is an important differentiator.
Third, the company tapped into another 20% of so of its customer base, which Arnold calls the social justice customer: a group of consumers, most of who are under 30, who place a high emphasis on buying from ethical businesses.
“We didn’t want to rip off the image of the wild American horse and just use it to sell more gasoline; we wanted to give back,” Arnold said. “So we approached myriad organizations working to protect wild horses out west and became the financial sponsor of the American Wild Horse Preservation Campaign, which serves as an umbrella group for all the critical supporters of the freedom for the American wild horse.” Today, Road Ranger donates a portion of its profits to the campaign and has informational brochures and sells bumper stickers in its stores for interested consumers.
There are other new features of course: the company cut costs and implemented 32-ounce fountain drinks that cost only $0.59 at its 20-flavor fountain bars, as well as $0.99 frozen carbonated beverages. The company also recently launched its own brand of water, Mustang Valley Springs, which presents information about the wild horse preservation campaign. Today, the 20-ounce and the one-liter private label water sizes are in the company’s top 50 items in terms of gross sales and gross margin dollars.
“All of these little features contribute to making the Road Ranger experience a unique and enjoyable one for our customers,” he said. “We’re tying all the pieces together to build a better foundation for the company that will serve us well no matter what challenges lie ahead.”