5 Steps to Becoming a Data-Driven Fuel Retailer
We receive data from the moment we’re born, until the moment we die. Everything starts with data. Fuel retailers generate a lot of the stuff. This is a blessing; but it can feel like a curse, especially without a clear path from having data, to using it to get results. We built our platform, EdgePetrol, to help you sort the signal from the noise when it comes to fuel pricing – but the following process can be applied whatever your setup. You’ve heard the benefits of being data-driven. But where do you start?
Start by choosing a meaningful goal
Let’s take fuel pricing as an example. It matters because it impacts your margin and profits by directly influencing volumes and shop sales. So you want to improve your pricing strategy, in order to get volumes up and ultimately, business performance. That’s your goal. If this sounds too obvious now, remember that in the world of data, things get complicated pretty quickly. Clarifying the basics early helps keep us on track later.
Find the metric that influences your goal the most
Most fuel retailers we talk to recognise one or more of the following ‘five pillars’ of fuel pricing as most important; volume, margin, competition, profit and execution. Which matters most to you?
Let’s take volume as an example. If they’re 4m per year right now, where do you want them to be? 6m? Is your target realistic? Notice how our goals are becoming more defined, and easier to measure. It’s an old cliche, but setting SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) goals keeps you focused and honest.
Now Identify the most important data points for that metric.
It’s tempting to say volume – after all, that’s what impacts our success. But what really influences volume? Volume is driven by the other pillars of pricing. In our example, let’s say that we know competition and margin are already dictating how we price. Things just got a lot more interesting. Because we’ve reached the essence of the problem – now we need to get to work figuring out what will really bring us the results we want!
Observe and test
It’s time to put what we think we know for sure on hold, and see what the numbers say. Make similar decisions and start to study the outcomes. This will allow you to validate the things you are getting right, before you change anything significant. Right now we’re being ‘data inspired’.
So we’re well on the way to being data driven – but not there yet. Being data-driven is cruise control – you’re aware of everything around you, but the numbers are driving you. We’re not ready to let go of control yet – but we’re starting to really harness the power of data.
You’re data-driven when you can say something like this with absolute confidence: “If I see X, I am going to do Y, because of Z.” For example, “If I see my competitor’s price dropping, I’ll hold my price for a day, because I know that more often than not it does not impact my volumes when I move 24 hours later.” Whether that is actioned automatically or after a sanity-check, the outcome remains the same based on data. Data is in the driving seat at this point, and you are the passenger.
The bridge from data inspired to data-driven is the quality as well as quantity of the data you introduce to your business. Getting you more timely, accurate and useful data is our mission at EdgePetrol. Click this link to book a demo today and find out how EdgePetrol can help your business: https://www.edgepetrol.com/schedule-demo