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June 1, 2011     

JOBBERSWORLD...MARKET INTELLIGENCE FOR INTELLIGENT MARKETERS...  The First and Only Independent Newsletter to Focus on Lubricant Distributors.



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Shell and its Marketers "Growing Together"

By Thomas F. Glenn

Thomas F. Glenn

President Petroleum Trends Intl. 

 

In my thirty plus years in the lubricants business I have had the fortunate opportunity to attend, and in some cases speak, at many lubricant marketer meetings. Marketer meetings are the big events major oil companies host every year or two. During that time, they gather their marketers together at some posh location and present two to three days of sessions, workshops, and other activities to inform, inspire, motivate, and encourage camaraderie. In addition, these meetings provide a venue for majors to listen to their marketers and set the tone for the direction the major is moving and its expectations.

 

As one might expect, marketer meetings can start to look and sound alike after a period of time. In the cynical eyes of some, beyond the fancy digs, Birdies and Eagles, and wining and dining, a common element is that the major talks and the marketers listen. And unfortunately, it's not uncommon to hear some marketers say when the majors talk there is often an air of arrogance about what they have to say, and when they listen, they sometimes do it with a stick in one hand. For these reasons, many I spoke with at and after the meeting say they were rather surprised at the tone and tenor of Shell's marketer meeting held last month in Las Vegas.

 

Although Shell's marketer meeting, dubbed "Growing Together," had many of the same trappings of every other marketer meeting I have attended, there was a noticeable difference at this meeting.  That difference being the level of candor and openness in what Shell had to say and how it was said. In the minds of many marketers in attendance, the most striking example of this was seen when Lisa Davis, President of Shell Bulk Fuels and Lubricants, Americas took the stage and presented data on Shell's operational strengths and weaknesses. Whereas it appeared to be a reasonably good report card, Davis said she was "personally and professionally disappointed with Shell's performance in being easier to do business with."  Although Shell was aware work was needed in this area, Davis said she had hoped to see more improvement over the past year. And with a convincing level of passion, Davis added that Shell will not only continue to work to bring their performance up to par, but has charged Shell's management team with making their operational performance the benchmark of excellence in the business.

 

Andrew Hepher's time on the stage was said to be another example of Shell's openness and candor. Whereas it's anyone guess if it was rehearsed, Hepher, Vice President B2B Sales, North America for Shell Lubricants, had the courage to invite two of Shell's well respected Distributor Advisory Council members, as representatives of Shell's marketer network, to sit on stage and ask questions in the general session.

 

So picture this, Mushahid (Mush) Khan, the President of O'Rourke Petroleum, and Matt Cullen, Principal of M.O. Dion and Sons, sitting on stage face-to-face with Hepher and asking him questions in the general session for all to hear. Although some of the questions were what might be consider softballs, Mush Khan threw an apparent bean ball when he pointed out that Shell's pricing structure allows some customers to buy Shell lubricants at a lower price at big box stores and wholesale clubs than possible if they buy from Shell marketers. To this point, he asked if and when Shell will address this issue. Needless to say, Hepher did not give a date when and if action would be taken, but he did take it in stride and said it was something they would take a closer look at. Agreed, we have all heard those words before at marketer meetings, but Hepher seemed to mean it.

 

I also had an opportunity to ask one or two hardball question myself in separate one-on-one discussions with Shell's management team attending the meeting. The first question is one JobbersWorld often hears marketers ask about Shell. Specifically, that question being "Whereas Shell is asking its marketers to commit to Shell, will Shell remain committed to its marketers?"

 

Craig Schneider, Vice President - Sector Marketing North America, Shell responded to this question with a definitive "yes." He supported this by pointing out that Shell has and continues to make changes in its organization that deepen its commitment to its marketers. Further, its commitment to marketers should be clear because many of these actions are difficult to reverse. The number of sales reps Shell has shed over the years was cited as one example of such actions. By shedding company reps, Shell is now heavily reliant on its marketers to provide feet on the street and going back would be a tough road to hoe.

 

Another example is Shell's restructuring of its direct sales compensation program. Whereas in the past Shell's direct sales force competed with Shell's marketers as separate business silos with little to no incentive to see Shell's marketers succeed, that has changed. Schneider says its direct sales force is now financially incentivized to collaborate with its distributors and to see them do well. 

 

Whereas Shell shared other comments and insights about its commitment to marketers and other positive and interesting changes underway, I'll stop here because I can imagine some of my readers getting to this point in the story are now saying, boy was Tom sold a bill of goods. Although this could be true, as I said, I have been in the lubricants business for over 30 years and during that time attended many lubricant marketer meetings. This one appeared to be different.

 

But far more important than what I took away from the meeting, is what Shell's marketers did. And based on what marketers said to me at and after the meeting, most were pleasantly pleased with what they heard, and they expressed hope that Shell means what it says about commitment and even more positive changes underway.

 

At the same time, one Shell marketer attending the meeting may have said it best when he pointed out that although he believes Lisa Davis, Andrew Hepher, Craig Schneider, and others in Shell's leadership team are sincere and committed to its marketers and improving the way it does business with them, they are only "gears in the Shell machine." He continued, "All of the gears in the Shell machine have to be turning and in the right direction to make things happen, and in the past, even though what individuals at Shell said sounded good, some of the gears were getting jammed up and the promised changes fell short of expectations."

 

That's an interesting observation that really speaks to the issue. Because to carry the analogy further, whereas Shell certainly makes fine lubricants, to successfully move those lubricant into the market, the Shell corporate machine must also be well lubricated. Like any lubricant, field testing will ultimately prove if the lubricant in Shell's corporate machine is robust enough to make the changes mentioned at its marketers meeting happen and its relationships with marketers run smoother and longer. To do so, like the lubricants Shell sells for use in its customer's machines, the lubricant in Shell's corporate machine must also reduce friction, work well under extreme pressure, lower operating costs, neutralize acids, and minimize foaming, squawk and chatter. If Shell's corporate lubricant can do that better than the competition, marketers can expect to see even more meaningful and measurable performance improvements coming from Shell in the years to come.

 

Note: JobbersWorld will open the engine and mic the parts that drive the relationships majors have with marketers in its upcoming study on Supplier - Distributor Relations, 2011. Like JobbersWorld's first study on Supplier -Distributor Relations, the second edition will rank and rate how majors perform in over thirty key areas. Please e-mail JobbersWorld at tom_glenn@jobbersworld.com for more information on the study.



 

 

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