Update on ExxonMobil’s Transition from Direct-Served

FAIRFAX, Va. -- It's been two years since ExxonMobil announced its intent to transition out of the direct-served retail business in the U.S., converting the majority of its markets to branded wholesaler, and the company says the process is going even better than expected.

"The level of interest [in the assets] has exceeded my expectations, and that has led to a very competitive bid process," Ben Soraci, U.S. retail sales director for ExxonMobil Fuels Marketing, told CSNews Online. "I'm very excited by who is buying our assets."

ExxonMobil is in the midst of selling roughly 2,200 company- and dealer-operated sites to branded wholesalers, with long-term fuel contracts for its Exxon and Mobil brands. About 800 of the locations have been sold to date. However, Soraci noted the vast majority of its markets are somewhere in the process, though it's varied how far along each is.

"We're very pleased with how the process is going. We have some great branded wholesalers, and many of our assets are being bought by our existing jobbers. And we're also getting some new branded wholesalers," he said. "It's very important to us who buys our assets and who operates them. We're very selective on who represents our brand."

As for when ExxonMobil expects to be fully transitioned from the direct-served business to the distributor model, Soraci said the company hasn't set a specific target date. "We're on track based on where we thought we would be. It's not a race to the finish. It's not about how fast we can get it done. It's really about the quality of the process," he explained.

In selling off its sites, ExxonMobil is shifting its focus from the backcourt to the forecourt -- with an emphasis on strengthening its value proposition to branded wholesalers. "The focus on our fuels brands is even more important now because that's really our bread and butter," he said.

Last year, the company convened a national panel of its branded wholesalers with the goal of identifying where the Exxon and Mobil brands are strong and where there are opportunities to improve. It's no secret that many of the company's branded wholesalers have other fuel brands, and Soraci said ExxonMobil wants to be their top choice every time.

Based on the learnings from that panel, the company is now focusing on areas such as card offerings and promotions to drive loyalty to its fuel brands. Earlier this year, ExxonMobil ran the "Win a Smart Fortwo Sweepstakes," where it gave away 13 2010 Smart Fortwo coupes.

Currently, the company is running a promotion in partnership with Restaurant.com where cardholders who register at a special Web site can earn a $50 dining certificate if they purchase 100 gallons of gasoline within 90 days of the date of registration. The certificate can be redeemed online at more than 15,000 restaurants and online merchants nationwide.

"Card programs are a big area for us… It's about having a pipeline," Soraci said.

ExxonMobil is also doing new things in the area of advertising. Consumer research recently conducted by the company served as a reminder that what's most important to customers when they decide on a fuel brand is: trust, quality and value.

As a result, the company's summer campaign this year focused on the quality of its fuels, while the campaign it will run in December and January focuses on tips for fuel efficiency.

"As we look at all the different aspects of our value proposition -- advertising, card programs, other loyalty programs -- we're running them through the filter of what consumers say they want," Soraci said. "Does it deliver on quality? Does it deliver on value? Does it deliver on trust?"