Practical “Closed Loop” Fuel Price Management

  • Practical “Closed Loop” Fuel Price Management

    A closed loop system uses feedback from the output to affect the input. In modern fuel price management, the application of a “closed loop” system is a highly effective approach to maximizing fuel revenue margins.

    Fuel Pricing Factors

    There are many factors involved in calculating price changes for fuel. Survey information, changes in existing volume, margins, and environmental factors can all contribute toward price shifts. A lack of integration between fuel price management software and physical sites will lead to ineffective pricing. The practical way to make fuel price changes in the modern world is through application of a “closed loop” system, wherein all processes are handled within the same channel.

    Given the volatility of gas prices over the past few years, installation of a single-channel pricing system has become vital. Coordinators should take care that the crucial steps involved in fuel price management can be coordinated easily. PriceAdvantage software makes this coordination simple. Managers can collect the aforementioned data such as surveys and margins which affect prices, analyze this information via real-time multi-source intelligence, change the prices offered and listed at all of their sites, and receive automatic confirmation that these pricing changes have completed.

    A Fuel Price Management Example

    A good example of the effectiveness of implementing practical fuel price management solutions is The Spinx Company. This company today uses a closed loop system which allows their employees to change fuel prices with just a few clicks at their personal kiosk, or from the corporate office. This eliminates interference from weather or high customer traffic and enables sites to update gas prices with a cost-effective and reliable system.

    “We can move very quickly as costs change,” says Stewart Spinks, CEO of The Spinx Company, “some suppliers do multi-day changes. Central cost monitoring and speed of price changes can ‘signal the street’ of our desire to pass on increases or decreases to the market. If competitors don’t react within two hours, Spinx can react expediently. Furthermore, the staff does not have to stop serving customers to physically go ‘post the prices.'”

    Customizable LED signage, when integrated with fuel pricing software, gives sites the ability to far exceed local competition with pricing that quickly reacts to changing market conditions. As consumers demand higher quality and green energy efficiency from their fuel providers, closed loop fuel price management solutions with LED signs enable companies to consistently meet customer expectations. This quality, integrated fuel management technology attracts more customers and drives revenue with increased visibility. The Spinx Company saw such success with their closed loop system that approximately 75 percent of their newly branded stores are shifting to this customizable LED signage as part of their fuel pricing strategy.

    Looking Forward

    Replacing outdated systems with electronic price signs and integrated message centers is the first, crucial step toward joining the world of tech-savvy fuel price management experts. These systems allow marketers to change prices with greater reliability and speed, increase customer attention at all of their locations, react quickly to all fuel market conditions, and most importantly, create greater revenue for their business.

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