Making the right business decisions often takes more than just having information at your fingertips. While that is really important, today, business decisions also need to be made by looking at a holistic combination of up to the minute, live data, research and strategy. Specifically, when it comes to fuel pricing strategies — for buying, selling and negotiating — there is no doubt an art to it (and maybe a little bit of technology and science too).
In a dynamic fuel pricing market, pricing managers face several challenges: hours spent collecting competitor data; manual processes, including spreadsheets; and inadequate business intelligence tools for making informed decisions. This results in reactive pricing decisions, leading to lost revenue opportunities. The fuel pricing industry has razor-thin margins already and a pricing solution that boosts your performance can make all the difference in gaining an edge over the competition and improving efficiency and maximize profits.
Today, retailers and wholesalers can increase visibility into the drivers that will allow them to optimize the price of their fuel in both B2B and retail environments. By combining real-time macroeconomic and market data, proprietary historical information and predictive analytics, pricing managers are able to model scenarios and execute automated pricing strategies, saving time and improving profitability. Being able to react to market conditions quickly and capitalize on margin opportunities in a dynamic environment is certainly key to a competitive pricing program.
But what are the other secrets to success to creating a holistic fuel pricing strategy? How can operators set specific pricing rules and optimize trends?
First, operators should consider a move from traditional spot pricing to dynamic spot pricing.
Spot pricing happens once a day — setting tomorrow’s price today. Dynamic spot pricing is a pricing strategy — setting today’s price many times throughout the day through the use of automation. With dynamic spot pricing, pricing managers can set flexible prices for fuel, based on the current market demands. The move from spot pricing to dynamic spot pricing will create a more strategic buy for the operator because prices are always fluctuating, and it gives the buyer the best possible price. Dynamic spot pricing ensures that the price you are selling at is always up to date throughout the day. In addition, traditional spot pricing is a very manual task that is time consuming and often runs on outdated and antiquated systems.
This brings us to the other strategic play for generating the best fuel pricing – transitioning from spreadsheets to using advanced and automated technologies.
As operators move towards dynamic pricing, they also move towards a more automated approach to fuel purchasing and pricing. Through the use of AI technologies that leverage machine learning combined with a council of smart data scientists, operators can now optimize fuel prices and improve margins by accessing competitive insights allowing them to react quickly to market conditions and stay ahead of a volatile fuel industry. Operators no longer have to rely on manual intervention to tell the fuel pricing system the best/lowest prices or to even to recalculate a price. Instead, through AI and automation, the parameters are set for pricing — date, amount, etc.
It also gives operators the ability to automatically set intraday pricing or overnight discounts through their own personal online portal. This automated, single source of information allows operators to be able to control how they implement pricing strategies across their network and remain competitive with real-time data. It allows pricing managers to not only purchase fuel at the best price, but also in smaller volumes based on need and based on frequency. Automated systems create personalized platforms, so operators can fill in specific times, prices, volume through a machine algorithm.
All of these strategies can create better pricing sophistication for wholesalers, a more targeted and accurate roadmap for fuel pricing, and all with less effort. The art of negotiating fuel pricing falls within the digital transformation that is taking place in the industry from an old-style method to new tools and technologies and the realization that the world is changing.
You can thrive in today’s digital economy. Contact us today, to learn how we can help you transform your business.