Fresh off the introduction of its World Class rewards program, the Minnesota chain is expanding its foodservice offering, investing in employee training and bolstering its operations to drive profitability.
By John Lofstock, Editor.
In an industry where more than 145,000 stores all sell the same items, differentiating your brand and your offering is a challenge. But for Bobby & Steve’s Auto World, a unique offering is exactly what sets it apart from other convenience store chains.
Based in Minneapolis, the eight-store chain is dedicated to serving its guests with fast, friendly and convenient service. But in addition to food, fuel and snacks, Bobby & Steve’s also offers a host of services, such as 24-hour towing and full-service automotive repair at each of its locations.
For 2013, the company is strongly emphasizing growth in several key areas, including major investments in technology, employee training, foodservice and operations. Its commitment to growing the business has earned Bobby & Steve’s recognition as a 2013 Chain to Watch.
“We realize that customers have a lot of choices these days. That’s why we are very focused on staying close to our roots with a unique offering that incorporates convenience retailing with automotive services,” said Jared Scheeler, director of convenience store operations for Bobby & Steve’s. “Combining these two businesses gives us a wide range of customers that remain very loyal to our brand.”
Building a Brand
Bobby & Steve’s has been around for some time. The company was founded in the 1950s by Bobby Williams, who bought his first c-store with a full-service automotive repair facility while he was in his early 20s. With some design tweaks, the site was an immediate success.
Williams went on to acquire real estate throughout the Minneapolis-St. Paul area, which all blossomed as profitable locations. In the mid-1990s, after reaching a high-water mark of 12 stores, all of which were operating under different brand names, Williams was injured in a car accident. Following his recovery he made the decision to downsize to five stores under a single new retail brand. He selected his top five units and set out to design what he called “the Rembrandt of convenience store centers.”
Thus, Bobby & Steve’s Auto World was born. As other operators backed away from auto repair, Bobby & Steve’s embraced the business as a key profit center to drive new and repeat business.
“From the very beginning, the concept was designed to be a unique offering,” Scheeler said. “The architectural elements focused on larger c-stores, expanded seating that also serves as a waiting area for auto repair customers, upscale foodservice and car washes.”
Today, of the eight high-volume stores, six are branded with Mobil gasoline and two feature BP. As a company, Bobby & Steve’s sold 11 million gallons last year.
Williams wanted to maintain a majority ownership in the company, but recognized that having a local partner to run the store’s day-to-day operations of each location would be a key component to success.
Enter the Steves. Bobby & Steve’s initial growth strategy was to rebuild two locations—one in Minneapolis and one in Bloomington, Minn. The business model was that Williams would be majority owner with 51% and the business partner owning 49%. The first Steve was Williams’ son, Steve Williams. Steve Anderson, the second partner, currently serves as the company’s CEO. A new partner, Jeff Bahe, was brought in for the company’s third unit.
“As the Bobby & Steve’s brand grew, we reached a point where we realized that we needed to create some commonalities in our offering,” said Scheeler, who is also a member of the NACS board of directors. “We had a common brand, but not much else, so we set out to give the consumers the same experience in one of our stores that they get in another.”
This led to a series of corporate hirings, which included bringing Scheeler aboard to oversee operations, plus a human resources director, a chief financial officer and an automotive operations director. Plus, Scheeler said, there was a strong belief shared by company leaders “that strong supplier relationships had to be at the core of the c-store business model.”
The corporate investments included:
• Consolidating multiple distributors to one primary wholesaler, Eby-Brown. A second deal with Martin Bros. Distributing, which specializes in foodservice, helped the company sow the seeds of its proprietary food program.
“As a whole, increasing buying power, reducing out of stocks and having all the right products in the stores led to a very strong 2012,” Scheeler said. “We brought our margin from 24.33% to 29.6% in just one year. All of the efficiencies lead to great profitability.”
• Investments in technology, including the development of the World Reward program and converting to a uniform back-office system with Service Station Computer Systems Inc. (SSCS).
“We found with SSCS that they could provide support on traditional areas such as bookkeeping, inventory, fuel management, but they also have a point-of-sale (POS) for the automotive business,” Scheeler said. “While we are not utilizing that component right now, it is available should we decide to convert to it in the future.”
• Developing consistent sales and promotions. In-store specials are now advertised on local media and available at all stores.
• Uniform store planograms.
• Investments in personnel, training and retaining team members.
• A fine-tuned focus on automotive repair, including identifying key areas of growth, such as tires, oil changes and towing. The company owns 26 tow trucks.
Rewarding Loyal Customers
The World Rewards program, powered by KickBack Rewards Systems, was created as a loyalty platform to help consumers save money—up to 10 cents a gallon—at the pumps. But it offers so much more. World Rewards recognizes its members with a broad selection of deals and ways to earn “points” to use toward purchases at the company’s eight convenience stores in Minnesota.
“Our advocates are asking for a loyalty program, and we are answering in a big way,” Scheeler said. “We are known for our great service, and World Rewards provides us with the opportunity to thank our advocates instantly, and encourage them to make Bobby & Steve’s Auto World their one-stop-shop.”
The program was so well-received by customers that the company has issued more than 50,000 cards since the program launch on June 17. “We had to put in an emergency order to KickBack for more cards,” Scheeler said.
Bobby & Steve’s Auto World’s World Rewards program offers unique discounts on fuel, as well as the opportunity to earn points on purchases made in store or on automotive repair.
Loyal customers can receive discounts on numerous items, such as coffee, doughnuts, oil changes and more. Plus, the card includes a “club” component that allows customers to earn discounts and giveaways on items like milk, coffee and dispensed beverages.
“We believe that World Rewards is a unique program to the convenience industry because the program allows members to quickly earn large amounts of points by utilizing our auto repair facilities,” Scheeler said.
Over the next few months, World Rewards will also begin to incorporate ACH debit, allowing customers to earn even greater fuel discounts while saving the company money on costly credit card fees.
“We feel that World Rewards adds to the Bobby & Steve’s Auto World brand promises of quality, value and service,” Steve Anderson said. Serving people will always be the most important part of Bobby & Steve’s Auto World, and World Rewards helps us to better serve our advocates.”
To attract new business, Bobby & Steve’s is also accepting competitor coupons, and will “trade in” competitor loyalty rewards upon request.
To grow sales, Bobby & Steve’s knows it needs to have a consistent foodservice offering, and it is well on its way to accomplishing that. For example, just two years ago, the chain had five different coffee brands at its eight stores. “That was absurd, but we addressed it with Bobby and & Steve’s Auto World Great Day Coffee and the number of cups sold went up 49%,” Scheeler said.
Cameron’s Coffee, a local roaster in Minneapolis, helped the company develop the proprietary brew. The foodservice program also includes hot grab-and-go sandwiches and a breakfast burrito.
Foodservice also helps to provide some synergy with the repair centers. Lounges are a key component of all stores so customers just stopping by for lunch or waiting for an auto repair can relax and enjoy a meal. The lounges include TVs and free WiFi service. C-store foodservice sales last year totaled $8.1 million.
The unique culture at Bobby & Steve’s Auto World is centered on its 340 team members who are alert and enthusiastic. The company believes that what really differentiates it is the ability to bring customers back time and time again.
The leadership team at Bobby & Steve’s Auto World understands that the type of service that creates customer loyalty comes from hiring and developing the right team. To ensure consistent hiring and enhance the company’s human resources practices, the chain implemented three of PeopleMatter’s HR modules—HIRE, LEARN and SCHEDULE.
“PeopleMatter has definitely made us consistent in our operations and our profitability,” Anderson said. “We also have improved communications, so we have more team members involved in the services we provide. The PeopleMatter Platform helps us provide more uniform customer service for our advocates, which is what we call our customers, to ensure they have the same great experience at every location.”
PeopleMatter’s HR platform now manages all of the company’s people, processes and paperwork online. It also synchronizes all of the employee data instantly to keep management up to date in real time.
“Before PeopleMatter, one person might receive an application and it would sit on his desk until he could get to it,” Anderson said. “Other stores nearby wouldn’t know that about the other store’s candidates. Today, the PeopleMatter system gives our team access to the entire applicant pool as soon as they apply.”
Pre-screening assessments, tax credit screenings and employment background checks flow directly into PeopleMatter’s HIRE online job application. Hiring managers can now choose the best candidates and move them quickly through the hiring process. LEARN lets the company create or upload videos, PDFs, training courses and tests to ensure the entire team provides the same high-quality service.
“With the varied technology experience our team possesses, this was the most intuitive and easy solution for us. They all love using this rather than doing everything manually, and it has definitely made us consistent in our operations and our profitability,” Anderson said.
Bobby & Steve’s Auto World firmly believes in giving back to the community. Its Youth Foundation, a private, non-profit organization that was established in 2007, was developed to guide local youth into actions and activities that will provide positive outcomes in their lives, such as athletics and after school programs.
With a very committed board, the foundation has been able to create community projects promoting literacy, healthy living and active lives. The foundation has partnered with nearby communities to build many playgrounds throughout the Minnesota Twin Cities Metro Area and to provide reading programs for elementary and middle school aged children.
In addition to partnering with local communities, Bobby & Steve’s Auto World Youth Foundation awards grants to other youth-focused organizations and individual youth to encourage perseverance and success in achieving their personal goals. As the foundation moves forward, the focus is on becoming more impactful in the communities it serves by expanding on reading programs, encouraging healthy lifestyles and supporting spiritual endeavors.
Plus, each year, Bobby & Steve’s Auto World Youth Foundation awards a scholarship to a student who has been selected based on his academic achievement, commitment to the community and his financial needs. Learn more about the association at www.bobbyandstevesautoworldyouthfoundation.com.