In 2014, Hess announced the acquisition of Speedway Gas, a leading independent service station chain with 62 locations in the United States. With this acquisition, Hess gains a company that is well-versed in the art of selling gasoline, with over 100 years of experience in the industry. It also provides Hess with a foothold in the growing on-demand fueling market.
Is the gas quality the same at all of the locations that Hess acquired? How does the customer experience compare at these different gas stations? These are some of the questions that this article will attempt to answer.
In a time when gas stations are trying to attract and retain customers by providing an excellent customer experience, it is important to understand the significance that quality has on customer loyalty. In a nutshell, a study from the Houston-based marketing firm Valossi & Associates backs this up, too.
“Our analysis shows that while branding, price, and convenience are important, the quality of the gas experience is what matters most to customers when deciding where to spend their money,” says Valossi & Associates partner Bill Valossi.
According to the study, 69% of respondents said gas quality was the primary factor behind their recent shopping habits and/or their upcoming purchase decisions, while 32% cited pricing and 19% cited convenience. Perhaps most notably, only 5% of the shoppers in the study said that the brand of the station was a significant factor in their purchasing decisions.
The Importance Of Location
One of the things that makes a difference in the quality of a service station’s gas is its location relative to the customer. In other words, are they close to home or are they traveling somewhere? While it is important for customers to have an easy access to the gas station, it is also vital that the gas is of a high quality. This brings us to the next point.
Make Sure To Have Good Gas.
Even if you are at home, it is still vital to have good gas. That way, you can be sure that your car will start when you want it to, regardless of the weather condition. As a general rule of thumb, avoid driving on dirt roads or hiking trails during thunderstorms, as this could potentially damage the engine. In addition, make sure to have good gas in the tank when you return home, as even a short trip on an empty tank could cause serious damage.
How Does The Customer Experience Compare?
Before we get to the good stuff, let’s talk about the bad stuff first. Does the customer experience at the newly acquired Speedway Gas locations compare favorably to that of Hess locations that are already established?
According to the study, 41% of the respondents who used Speedway Gas said that the quality was on par with that of Hess, 28% said it was slightly worse, and 29% said it was better. Another important consideration is the feeling that the customers get when dealing with the gas station. Sixty one percent of the respondents said they get a better vibe from the staff at Speedway Gas compared to that of Hess, while 22% said they get the same vibe, and 19% said they get a worse vibe. Finally, 28% of the customers said they feel more comfortable picking up their gas there, compared to 17% who said they feel more comfortable at Hess and 8% who said they feel equally comfortable at both locations.
All these statistics point to one conclusion: the acquisition of Speedway Gas by Hess is indeed a good move for Hess, but it comes with a cost. The question is: will the cost be recouped through increased sales and/or brand loyalty from customers? Time will tell, but one thing is for sure: Hess is gaining a valuable asset.
What Do Customers Say About The Station’s Brand?
With all the talk about the gas quality and the customer experience at the newly acquired Speedway Gas locations, it is important to remember that most of the respondents in the study didn’t even know what brand the gas station was. As a result, it is difficult to say whether or not they were specifically thinking about the brand of the station when they answered the questionnaire.
Is The Brand Important To Future Purchases?
Once you find out what brand the gas station is, you can ask respondents about its importance to future purchasing decisions. In the study, 20% of the customers said that the brand of the station was extremely important, while 17% said it was quite important and 42% said it was somewhat important. Just to put things into perspective, only 12% of the respondents said that the price was extremely important, while 16% said it was quite important and 60% said it was somewhat important. Perhaps most notably, only 4% of the respondents said that the convenience of getting their gas was extremely important compared to 10% who said it was quite important and 86% who said it was somewhat important.
In conclusion, the brand of the gas station is quite important to future purchases, which is great to hear for the brand managers out there. It shows that the brand is having an impact and that it is something that the customers are thinking about. Keep up the good work.
Is The Price Important To Future Purchases?
As we already established, gasoline is a very important part of modern life. It forms a vital link between our cars and our daily commute to work, as well as a necessity when going to the store or on a picnic. For these reasons, it is no wonder that the price of gas is one of the most important factors in consumers’ minds when deciding where to spend their money. In fact, 69% of the respondents in the study said that the price was extremely important, while 58% said it was quite important and 20% said it was somewhat important.
To put things into perspective, 12% of the respondents said that the brand of the station was extremely important, while 10% said it was quite important and 80% said it was somewhat important. In other words, while the brand may be having an impact, the price is in a class by itself.
Hess is the master of creating convenience for its customers. After all, this is a company that invented the drive-through window and perfected it with the advent of the automated pump in the 1950s. Naturally, with this latest acquisition, they want to bring that convenience to the customers of Speedway Gas. In other words, will the acquisition of this Texas-based company make it easier for Hess customers to get their gas? Let’s take a look.
Will The Acquisition Of Speedway Gas Make Things Convenient For Customers?
According to the study, 19% of the customers said that it will make things very convenient, while 17% said it will make things somewhat convenient and 68% said it will make things not much different. In other words, while the circumstances of getting gas may change slightly, the basic idea of going to a gas station and getting your gasoline will remain the same. Naturally, this is good news for Hess and bad news for Speedway Gas, as this acquisition will cut that company out of the majority of its revenue streams.
Is The Acquisition Of Speedway Gas A Good Move For Hess?
In the grand scheme of things, the acquisition of Speedway Gas by Hess is a good move. Not only does it provide the company with a foothold in the growing on-demand fueling market, but it also ensures that its customers have a positive experience when they fuel up at one of its 62 stations across the country. In other words, it provides brand loyalty and an excellent customer experience.
In comparison, the acquisition of Speedy Gas by Arco was not so good, as this move by Arco cut that company out of the majority of its revenue streams. Consequently, Speedy Gas filed for bankruptcy in 2015 and was subsequently liquidated. Not only that, but the brand was acquired by Marathon Petroleum, which later merged with another division of ExxonMobil. Therefore, it is safe to say that the acquisition of Speedy Gas by Arco was a bad move, both for that company and for its customers.