Occam’s Marketing

It is a common misconception that, in order to be successful, a marketing project or initiative needs to be long, multidimensional, and expensive. This is often reiterated by people and companies who want to sell their sophisticated (and profitable for them) systems and solutions. Sometimes a complex task does indeed need a complex solution but more often then not all you need is an insight why something is happening and a simple action to address it. You can call it “Occam’s Marketing” – if there are two possible approaches, normally the simpler one is the correct path to take. Here I would like to illustrate this with an example from my career.

In 2007 I started as international marketing manager at the Lubricants department of OMV. In this function I was also responsible for the motor oil brand OMV BIXXOL. We were selling the motor oil mainly to workshops and dealers but a very important sales channel were also OMV’s gas stations. Motor oil sales there were not that great and I started wondering why. The problem’s importance was significant as the price per liter of motor oil was significantly higher (sometimes double) than the one in retail stores and workshops and, of course, brought a much bigger profit margin to the company.

The answer to the first main question “Why would customers actually buy a bottle of motor oil from a gas station?” was actually easily confirmed by research: in 90 % of the cases this would happen when the oil warning lamp on their car’s screen would light. Then the driver would stop at the nearest station and would seek to buy the right type of oil in order to top up the level of oil in the engine. This is why the vast majority of sales at the gas station came from 1 liter bottles, even though 4 liter bottles were also available. I described the exact process of how the sale of motor oil at our gas stations actually happened:

1. Oil warning lamp is activated
2. Customer stops at the parking of the gas station
3. S/he heads to the gas station entry. Before entering through the door, s/he passes by a metal stand full of motor oils (for safety and health reasons motor oils cannot be kept inside the gas station).
4. Customer goes to the cash desk and, if necessary, waits at the queue.
5. The cash desk officer politely asks about the problem.
6. Customer explains that s/he is looking for a motor oil.
7. Cash desk officer asks to see the car’s technical registration.
8. Customer produces it, if available on his/her person. If not, a return to the car is necessary.
9. Cash desk officer checks the engine data from the technical registration with a motor oil catalogue (a book of several hundred pages) which describes in great details the specifications for each engine.
10. Eventually, after a couple of minutes, the right motor oil type is identified and customer is advised about it.
11. Customer goes back through the door to the frontcourt of the gas station to the motor oil stand and picks up the right oil type (if there at all).
12. Customer returns to cash desk to pay.
13. Customer pours oil in car engine.

I guess that you immediately noticed the problem here? It took 13 steps to make a simple sale. Very often the customer would get impatient and would quit. Normally this would happen while the cash desk officer was checking the engine data. “No need, thank you, I will go to the workshop tomorrow…”

I started thinking how this whole oil selection process could be simplified to the bare minimum and make customer choice much easier. The obvious solution would be to have an instruction table on the shelf itself. At this point I need to explain that car manufacturers have oil specifications for each of their engines which the producers of motor oils need to meet (you can see which specifications are met at the label of every motor oil bottle). As car companies are aiming for economies of scale, however, their engines become more or less standardized per fuel type. In 2007 there were three main types of engines: petrol, diesel with particle filter, and diesel without particle filter. I did not see a reason why we could not recommend a single motor oil per engine type/manufacturer combination, as we had a wide range of lubricants, including universal ones like the OMV BIXXOL Premium and Extra.

At a meeting with my boss (an engineer) I shared my idea. He just laughed and said:

– Not going to work!

– But why??? – I obstinately asked.

– Talk to R&D and you will see. If you make this work, I will buy you a bottle of whisky!

Additionally motivated by this incentive, I went to the very competent lady, who was the head of our Research & Development. She also laughed and said:

– Not possible!!!

– But why, tell me, please?!? – I was getting more and more confused.

She replied:

– Because there are a couple of engine/manufacturer combinations that we cannot cover!

– And which are these? – I inquired with the innocence of ignorance.

– Well, let me see. For example, Buick 1957 model…there are a couple of others like this.

This time it was my turn to laugh:

– Do you know how many Buick 1957 are there on the European roads? Probably one or two. In any case, we are interested in the average Joe. If a Buick 1957 owner cannot find the right oil in the table, well, we will have to live with it and record it as a lost opportunity.

So I managed to convince her to start this project. It took us almost three months to finalize it with the help of the whole great OMV R&D team but finally the table was ready. It looked like this:

We printed the table in A4 format and put it on top of the motor oil shelves in all 3000 OMV stations. The results were immediate: motor oil sales at the gas stations jumped by 25 %! The whole monetary cost to achieve this growth was the printing of the sheets. The biggest compliment was paid by our competition, as Shell copied the approach and also started placing oil finder tables at their gas stations.

I left OMV in 2014 as our department was sold to another company. In August 2019 we stopped at an OMV station and saw that the oil finder table was still there, even the design was about the same as 12 years go. Why change something if it works?

Oh, and I am still waiting for that bottle of whisky! :-)