The Kotler Effect

With more than 600 stores now under its watch, GPM Investments lets the industry know it’s here to stay.

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“They have a bunch of strong brands. So it’s not our initial goal to go out there and rebrand everything,” Giacobone says. “In the long term, we’ll respond to what the customer wants.”

And with the large jump in size comes a new density for GPM in the Carolinas and Tennessee. To meet those needs, a new division dubbed GPM Southeast will oversee the sites, working from the former headquarters of VPS Convenience Stores in Wilmington, N.C.

“There’s 200 stores in North and South Carolina … and that will be a larger version of our regional office,” says Giacobone. “We have a lot of accounting people there; we have marketing and advertising people there. It’s a whole separate division in terms of store operations because there’s a big concentration of stores there.”

Not big enough, according to Kotler, who says the creation of the Southeast division requires GPM to continue to grow in that region.

“Our thought process is: Since we’ve got a big Southeast office and a lot of key positions [over there], instead of concentrating on how to consolidate the business, we’re thinking the other way around,” he says. “We’re concentrating on how to expand the business.”

‘The GPM Way’

There will be sharing of ideas, however, as the executives compare and contrast each chain’s major programs and unique offers to find where they can learn from one another and develop efficiencies.

“We want to take the best of both worlds and work those programs into one another’s systems,” says Bill Reilly, senior vice president of sales and marketing. “Let’s take the best of an acquisition and see how it can work the GPM way.”

While the first in-store priorities are to align pricebooks and point-of-sale platforms—GPM uses VeriFone Sapphire POS, PDI back-office software and fuel pricing through KSS—executives say they’ve already identified several programs they’ll transfer to other divisions “if it makes sense.”

Mike Welsh, senior vice president of operations, says, “I visited with 26 VPS managers in Tennessee [the week the deal closed], and the thing they wanted to know was when can they pick up our measurement of suggestive selling,” a GPM program that rewards cashiers who upsell the most customers. “I was jazzed they’d heard about and wanted to adopt it. This was two days after the deal closed!”

Reilly established the suggestive-selling program—and the goal of measuring it and rewarding employees—soon after he joined GPM in May 2012. A list of products to be pushed for the next week is distributed each Friday, and the company’s POS system measures the number of each items sold during each shift.

“That’s what I preach: Engage the customer; change the conversation,” Reilly says. “The way to change the conversation is to ask a question: ‘Are you thirsty today?’ … This is now part of our fabric.”

For Welsh, he’s interested in learning about the VPS stores’ doughnut program. While GPM sells Krispy Kreme in several of its legacy stores, the Southeast stores have their own successful proprietary doughnut program, one GPM may be able to expand to generate larger profit margins. “I can’t wait to get a look at their pastry program,” Welsh says.

“We’ll go to them and say, ‘Show us the model,’ ” Reilly adds.

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