How much is your company's fuel pricing costing?
Fuel retailers are facing extreme uncertainty at the moment. With varying degrees of travel restrictions worldwide and fuel demand dropping, it’s an incredibly volatile time. Unfortunately, it looks as though the coming months aren’t going to get any easier, either.
If you’ve not examined your pricing processes for a while, it’s critical to do so now — because the fight for volume is about to get harder. Now is a good time to ask yourself, can you identify any process inefficiencies? How much is your fuel pricing actually costing you?
Don’t get caught up in panic
While fuel markets are currently experiencing sudden, unexpected volatility, it’s important to find efficiencies where you can — now more than ever.
While falling oil prices are never reflected as quickly on the forecourt as the press would like, supermarkets are already beginning to slash prices. But it’s critical to avoid a race to the bottom. Take a step back to evaluate your network. You’ll see more long-term success by doing this than by sacrificing margin in an attempt to draw volume.
How much your fuel pricing strategy is costing you
In the current climate, it’s critical to avoid wasting time and money on inefficient manual pricing processes. Ask yourself the following three questions:
- How quickly are you alerted to competitor price changes?
- How quickly do you change the price at your pumps after doing competitor price research?
- Do you know when a price was changed at the pump and what was the extent of any delay?
The answers will help you establish how much your fuel pricing strategy is costing your company.
Use our quick and easy calculator to instantly see your personal cost benefits of switching to automation, in real terms:
Know your competition
As well as understanding the cost benefits of automation, you need to be able to monitor what the competition is up to. That means assessing raw market data effectively, and deciding how to react quickly.
In volatile periods, it pays to be prompt rather than perfect — consider adopting a directional decision-making strategy to ensure you keep pace with the market.
You should be able to relate your prices, and competitor prices, to volume. Employ an elasticity model to strike the balance between not dropping the price too quickly, and not being seen to lag behind. To monitor and manage this level of data, and respond to such rapid market changes, you need to shift away from manual pricing and embrace automation.
Want complete peace of mind?
Automating processes can play a huge role in keeping you compliant, and ensuring that any actions you take during such a high stress period adhere to market rules. Your data is key to telling you what’s going on and proving what happened afterwards.
Centralized, automated tracking and reporting is crucial. You don’t want to be scrambling around for answers to why specific decisions were made in a week’s or a month’s time. You need real time tracking around decision making and approvals, to ensure choices are consistent with pricing policy and — if any departures were made — why.
For peace of mind that you’re meeting your legislative obligations, or to understand where your processes could be enhanced, take a quick look at our fuel compliance assurance checklist.
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