gas station, gas pump
Most consumers choose a gas station based on price.

Choosing where to fill up on gas comes down to price and convenience for most American drivers. But when fuel prices hold steady (as they have done for the past five months), how else can convenience stores drive more traffic to their forecourts and into their stores? Competitive fuel pricing is key. So is having an effective loyalty program.

If you’re a c-store operator, you can leverage data – one of the biggest advantages of today’s digital ecosystem – to enable both. Market data informs competitive fuel pricing, while using customer data effectively can boost loyalty program engagement.

The Importance of Competitive Fuel Pricing

For most consumers (59 percent), price determines where they buy gas, according to a 2019 report by the National Association of Convenience Stores (NACS). While low prices at the pump attract drivers, they bring in slim profit margins for c-store operators; NACS estimated the average pretax profit for c-stores at just 5 cents per gallon.

What c-store operators need is smart, data-driven pricing, not aggressively reduced prices. If you’re still sending employees out into the field, driving around to check your competitors’ posted prices or still using spreadsheets for gathering data, you’re at a disadvantage. Manual processes are inefficient and can negatively impact your business, especially when fuel prices fluctuate.

To optimize pricing, c-store operators need the capability to set fuel prices according to margin and business objectives in real time. The right fuel pricing solution will help you apply dynamic pricing principles, optimize pricing baselines and leverage all available market data to remain competitive without relying on manual processes.

The Importance of an Effective Loyalty Program

But you can’t rely on fuel pricing alone to drive foot traffic, especially considering the low-margin sales of fuel per gallon. Building a long-term customer base is necessary, too. One where customers regularly top up at the tank and are also likely to buy higher-margin items in-store.

It’s one of the reasons why so many c-stores (73 percent) in the United States already have a loyalty program, according to PDI’s 2019 C-Store Shopper Report. On the average, members spend 29 percent more than nonmembers, at $11.17 per visit versus $8.66. Not only that, loyalty program members are also 42 percent more likely to go inside the store each time they fill up on gas, making their impact on the bottom line greater. The latest Road to Rewards Report complements these findings, as it shows that 66 percent of loyalty program members use their loyalty programs at least once a week.

By offering fuel savings as a reward, you’re boosting revenues by encouraging more foot traffic and increasing sales both at the pump and in the store, making up for the lower per-gallon fuel margins.

How to Use Data to Boost Foot Traffic
Whether it’s optimizing fuel prices or running a loyalty program, the proper use of data serves as the foundation for facts-based decision making needed to achieve sales goals and reach them faster. Here’s how you should use data in your fuel pricing strategy and to maximize your loyalty program’s marketing ROI:

When it comes to fuel pricing, be proactive, not reactive. Use competitor pricing, historical data, market trends, price indexes and predictive analytics to find the optimal selling price at any given moment – in real time. Being able to model scenarios to make informed business decisions and generate higher margins is critical. When prices are fluctuating, you’ll be able to adapt quickly based on the needs of your sites.

Personalize your loyalty program offers and messaging to stay relevant. Use customer data you collect through your loyalty program to gain insights into what members want so you can tailor messaging and individual promotional offers accordingly. Personalization is the best way to ensure your loyalty program remains relevant to your membership. A successful loyalty program requires an end-to-end solution that helps c-stores know who their customers are, what motivates them and gives them the ability to engage members across different channels and segment them for optimum results.

  • Personalization can help change consumer behavior positively. Personalized communications are more likely to positively influence consumers’ purchase behaviors. Using a unified loyalty marketing solution that can target consumers in real time through in-app messaging, geotargeting and push notification can significantly boost engagement. A robust system will know when a member is filling up at your site, which could trigger a push notification to the member with an offer that’s redeemable inside the store.

As a c-store operator, you’re already providing consumers with fuel, one of the most valuable commodities they use every day. Using data, which is quickly becoming the new “oil” because of its impact on business, can become the most powerful tool for increasing your competitive edge, transforming the way you operate and boosting your topline revenue.

Did You Know: Your Source for PDI News provided by PDI, the leader in enterprise management software for the convenience retail and petroleum wholesale markets.