A Fresh Look
The multivariable testing process can help improve your marketing, merchandising, or layout strategies by testing dozens of variables at a time.
Sometimes it takes a special event, a merger, or reces-
sion to look anew at your operations and question your
basic assumptions and practices. That’s what happened
with Pilot Flying J Travel Centers, and, in fact, it all
happened at the same time.
Knoxville, Tenn.-based Pilot Travel Centers, one of the
largest privately help companies in the US, acquired
Ogden, Utah-based Flying J for $1.8 billion. After the
merger, with 550 locations and several franchisee fast
food operations, including Subway, Arby’s, McDon-
alds, and Taco Bell, the new Pilot Flying J knew
it needed to figure out what would work and what
wouldn’t quickly-management needed to protect sales
in the face of one of the nation’s worst recessions.
The company turned to performance improvement con-
sultancy QualPro to help it increase the profitability of
its operations. Founded by Dr. Charles Holland, a for-
mer quality division manager for the National Nuclear
Weapons Complex in Oak Ridge, Tenn., QualPro was
developed around the use of a testing methodology
called the MVT (Multivariable Testing) Process, which
allows researchers to structure experiments that test
dozens of variables at one time. QualPro consultants
can then analyze the data to determine the impact of
each test strategy and combination of strategies, an ef-
ficient way to make decisions based on data rather than
opinions.
Retail, with multiple store layouts, elaborate merchan-
dising, and sophisticated marketing, lends itself to the
MVT Process’ applicability in complex environments
and approach, which examines numerous improvement
strategies.
QualPro’s ability to identify solutions for an exceed-
ingly complex business was paramount to Pilot Flying
J, which wanted to test not only its display and stock-
ing of retail merchandise in 12 store formats, but also
its offerings in the beverage, deli, and multiple brand
fast food segments; signage; promotions; and bundling
of different product lines.
Quick Chek, a leading convenience store chain based
in New Jersey with 2,600 employees, has also adopted
the use of the MVT Process to grow its sales and
margins. John Schaninger, vice president for sales and
marketing, said, “It is incredibly valuable to be able to
test 15 practical, fact, cost-free improvement ideas at the same
time.”
QualPro’s consultants are number guys focused on practicality:
they encourage their clients to generate dozens, even hundreds,
of ideas for testing and then to whittle the list down to those ideas
that are the most practical, usually cost neutral, and easy to imple-
ment.
For Pilot Flying J, these included promotional pins on staff mem-
bers offering discounts on sandwiches, for example, or Happy
Hour beverage discounts announcements to gasoline custom-
ers, as well reconfiguring stores or merchandise mix. Thanks in
significant part to its work with QualPro, Pilot Flying J not only
protected sales, it grew profit by 8% last year according to the
company, which is privately held. Here are some key points on
how to use the MVT Process effectively:
Question what you’ve always done
“We did our work intuitively. We had a sense of how customers
would react to our strategies, but we never knew exactly what
actions were the most important,” said Edward Carroll, former
executive vice president for sales promotion and marketing
(Northern Division) of Saks, Inc., now an independent retailing
consultant.
At his division, Carroll and the QualPro team tested 32 factors,
such as the use of mannequins in displays, cosmetic demonstra-
tions, and changes in advertising. Almost half of them had no
impact, but some of those that had no positive impact on
sales were valuable for other reasons, such as reducing
cost or simplifying operations.
Carroll said lower level employees were thrilled to be
able to focus on what actually worked for customers
rather than doing things just because someone above
them told them to. The changes made based on the test
results increased comparable store sales by 2.5% on sales
of $2.3 billion.
Involve everyone for ideas and implementation
Everyone has good ideas, from the part-time cashier to
the CEO. Including many in the idea generation creates
a great deal of enthusiasm for implementing the ideas
that work. Getting all the stores to execute the test as
designed is essential. The tests are very precise, and the
changes happen fast. “Over communicate,” recommend-
ed Ken Parent, SVP of operations for Pilot Flying J.
Let the data drive you
“We thought for sure some of the stuff we were doing
was working, but it had no effect, or worse, a bad effect,”
said Parent. In the Pilot Flying J stores, merchandise and
total SKUs were lowered, but sales increased – a coun-
terintuitive move to many retailers.
The store layout that tested best was not the one most
managers expected. In one of the tests done for Quick
Chek, six unrelated items boosted sales in combina-
tion but not in isolation. “That’s just the recipe,” said
Schaninger. He implemented the results immediately.
Rita Koselka is a freelance writer based in San Francisco. She previously served as a senior editor at Forbes.
To learn more about the MVT Process and how other retailers and Fortune 500 companies have implemented it, please visit www.qualproinc.com