By Kalibrate Team
There's a lot more to pricing mastery than just responding to the prices of crude oil. There's a lot more to it than choosing a new technology to power your decisions. And if you expect to get better results simply through purchasing any pricing system — without considering each component of your pricing strategy — you run the risk of being sorely disappointed when you run the numbers and find out your pricing changes haven't really contributed to volume or margins.
So what should you consider?
Fuel Pricing Mastery Depends on the Big Picture — and the Details
The National Association of Convenience Stores (NACS) notes that there are "several considerations in setting fuel prices that retailers of other products don’t face." Some of these factors include wholesale price changes, contracts that dictate shipment frequencies or establish lengths of engagements, brand constraints and major geographical or environmental influences, like the perception of energy consumption in a given area.
As described by the 2016 NACS Retail Fuels Report, "Each of these factors adds complexity to a retailer’s pricing strategy, and they can create unusual market dynamics. There are times when the retailer with the highest posted price in a given area actually may be making the least per gallon, based on when, how and where the fuel was purchased."
And it's not just that, either! If you want to master pricing and execute changes quickly, you need to have access to both the details of your location and a wholistic viewpoint on the market. You need to know how each aspect of each location can impact sales, and how you can respond.
At Kalibrate, we've discovered, over time, that there are seven distinct elements that contribute to your fuel and retail success. Six act as volume magnets: market, location, facilities, operations, merchandise and brand. The remaining element, price, is more of a decision point and one of the least efficient volume levers to pull. When you perform brilliantly in those six volume magnet areas, you earn the right to make a decision on pricing. Success is not built on price, but all seven elements.
In our latest free Ebook, you'll find out:
- What data you need to see in order to make better decisions
- How to properly gather the right information
- Why competitor pricing matters
- The value of integrated systems