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Growth Practice

Creating a multi-touch consumer experience

Move

A Determined Client in a Tough Industry

CMG’s client, a retail division of the global oil and gas company, was searching for new opportunities to capture larger market share in the US retail gas industry. As one of the world’s “supermajor” oil and gas companies, our client plays in a hotly contested market. They were facing increased competition and, having recently invested in expanding their refinery capacity, they needed to boost demand in step with the new supply.

To address these challenges, our client sought to rethink how they deliver differentiated value propositions for two target audiences: consumers (everyday drivers, truckers, boaters, lawn-mower operators) and customers (station owners and franchisees). They were willing to lay every aspect of their market model on the table for evaluation and improvement, from distribution to payment to pricing to overall brand experience.

Over the previous three years, we had developed a great working relationship with our client’s marketing team. When they came to CMG during the RFP process, they knew we had an insider’s knowledge and the track record to get the job done. But the decisive factor was that we were one of the only firms to take a hard consumer-led approach. Our thinking converged with our client’s in that we identified consumer experience as the key space for differentiation in such a tight market.

The client’s aspiration for the project was to become the market-share leader in the US. To get there, we needed to define viable, financially accretive value propositions and the market models to support them. The client set a 12+ percent return and three percent incremental market share as the benchmarks for success. Independently, CMG added a BHAG (Big Hairy Audacious Goal) of $1 billion in total marginal returns.

Think

Over fourteen weeks, CMG developed a growth strategy to meet their client’s objectives. Our first move was to bring together an Innovation Council that included experts in pricing, supply chain, retail, and design—and drew on the greatest strengths from both their client and CMG. The collective team’s task was to stretch our client’s conventional frameworks for problem-solving in the early phases of the project and to act as a sounding board for strategic guidance throughout the engagement.

Repositioning as a large brand

Customer touch-point analysis

Working in tandem with the client’s team, we ran an extensive discovery process to get a better understanding of their business situation and out-of-category models for consumer engagement. Then we conducted several work sessions with the client team and our Innovation Council to explore new market models and associated value propositions for our target segment. We used a set of guiding questions for this effort:

  • Where and how do consumers access gas?
  • How is the gas supplied?
  • How does the consumer pay?
  • What is the pricing formula?
  • What’s the experience people have with gas, retail, and brand?

After laying out prospective options for all these questions, we prototyped value propositions and probed new possibilities. We laid out 19 initial concepts designed to transform the consumer’s experience with the client in six categories:

  1. Engaging across the client’s points of presence
  2. Growing points of presence for consumers to access the client’s fuel and services
  3. Increasing the quality and convenience of service through modern retail
  4. Adding efficiencies to the supply chain
  5. Exploiting the client’s existing capabilities
  6. Introducing new kinds of technology

The Innovation Council met again with the client’s team for a second work session. Together, we prioritized the options according to their projected impact and implementation costs. We then challenged the teams to identify ways to give the concepts more impact, and tested them by role-playing how competitors, consumers, channel partners, and the client’s CEO would respond.

Do

A plan is only as good as its implementation. We systematically analyzed the operations and value propositions of each strategy, as well as how each one would fit with the client’s current capabilities and differentiation potential.

Alongside the client’s team, we were able to eliminate those proposals that weren’t financially viable. The result was a set of nine plans that, together, formed a full portfolio of solutions for market growth. The approach centered on the notion that, given the ubiquity of fuel, there is a need to deliver the product and its associated benefits in ways that consumers will easily understand, accept and value.

For each concept, we presented a full business case to support the decision to invest. Each case was emblematic of CMG’s unique value to clients: each case was viable.

Move

Given the omnipresence and uniformity of fuel, we knew the client’s products needed to reach consumers in ways that they demanded and valued. The portfolio accomplished this by reducing the time people would have to spend fueling up, and increasing the quality of engagements each consumer would have with the client’s products and brand. But more than that, CMG’s work moved the client to fundamentally reconsider their product offerings: from fuel products to new kinds of delightful fueling-up experiences.

We validated our final recommendations with data gathered through primary research with 29 target consumers. We knew our final recommendations were the right ones because they enabled the client to realize their potential through differentiating themselves from competitors, exploiting their existing capabilities, and ultimately securing incremental growth and profitable market share.

Potential Realized

CMG’s recommendations broadened the client’s perspective on its target market and business. We brought to bear a fresh awareness of future trends and new experiences in an industry where consumer experience is not typically at the top of a company’s priority list.

We backed up all our recommendations with business cases that indicated trajectories of clear growth. Our financial analysis projected that the growth portfolio would yield $375 million in incremental GM within five years of market launch. This would effectively double the size of its business in the US.

Case Study Graphic_ BP

Armed with fact-supported recommendations and our guidance on timing, the client successfully pursued the select short-term tactical proposals. CMG is currently engaging with them on one of the long-term strategic proposals.