July 25, 2022
If you own a retail fuel operation, you’re blessed, or cursed, with a lot of data.
You receive data from the moment you’re born until the moment you die. Every piece of information is data in some way, shape or form.
Data can be extremely useful sometimes (today’s date, for example) and useless other times (sloths can hold their breath longer than dolphins).
Unless you’re cruelly planning on drowning some cute sloths, I think we can all agree that time plays a significant role in your life.
So, we can cover that off pretty efficiently:
(Although, this is pretty subjective.) Data is useful depending on the context. For example, if you were a zoo veterinarian, (I would assume) sloth lung capacity would be considered useful data.
Then, whatever data we have, we need to make sense of it. Some data is easy to understand (chance of rain) whilst others are more confusing (the volatility of oil prices).
Now we can apply this logic:
Next, we have accessibility. How easy is it to get this data?
Without going into too much detail (and subsequently having everyone click the little ‘x’ on their browsers), I’m going to stop here. But I will tell you this:
There are 24 possibilities just from the above. And we haven’t even got on to how you use this data.
And this begs the question. You’ve heard all the benefits of being ‘data driven’ and you want in. Where on Earth do you start?
Draw up the ‘why change something’.
You probably know by now that EdgePetrol focuses on fuel pricing, so we will use this as an example. It matters to fuel retailers because it impacts their volume, shop sales, margin and profits. Influencing these results is important stuff!
Find out the data points that have the most influence on this goal.
Fuel retailers tell us that there are five core pillars to fuel pricing: volume, margin, competition, profit and execution. Which ones matter most to your stations?
How easy are they to comprehend?
You are probably looking at one or more of these pillars already and understand them. But let's take volume as our example. We all know what it means and we all know up is good and down is…well, bad.
What do you want to achieve?
So volumes are 2m gallons per annum. What does good look like for your business? 3m? Is it realistic?
It’s an old cliche, but setting SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) goals keeps you honest. Don’t do something for the sake of it.
Identify the most important data points for that specific metric.
Tempting to say volume isn’t it? But actually, that’s driven by the other pillars. Competition and margin are going to dictate how you can price. Maybe that is the best place to start.
And how can I then be better data-driven?
You can’t until you really let go of your inhibitions. And you shouldn’t do that straight away.
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. This is called being ‘data inspired’.
You’re data-driven when you get to the stage of saying in advance “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 automatically actioned or not, the outcome remains the same based on data. Data is in the driving seat and you are the passenger.
What is most clearly the difference between being data-inspired and being data-driven is you need to introduce more data into your business. More timely, more accurate and more useful data.
There are so many data points at a station and EdgePetrol is one of many softwares that can help you do that.
So, when you break it down like that, it is less confusing, right?
Or maybe I’ve just confused you all…including myself.
The most important thing is that no Sloth’s were harmed in the writing of this blog. Phew.
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