How to Preserve Fuel Customer Loyalty Amidst Price Hikes

The U.S. is on a mission to “Fix the Damn Roads”. The hurdle? It doesn’t have enough money in the transportation funds to do that. The solution? Simple; raise the gas taxes at the state or federal level—or possibly both—and reinforce the funds.

Thirty US states have raised gas taxes in their respective jurisdictions since the start of 2013. Alabama and Arkansas are expected to join the ranks later this year. To add to the concerns, a 25 cent-per-gallon increase to the federal gas tax is also under review. There is a common belief among legislators that raising gas taxes is the only way to restore and improve the country’s fast-eroding motor infrastructure.

The brunt of these measures is obviously hitting gas station operators hard, especially fuel retailers who operate in a high-tax state near the border of a state with lower taxes. For such retailers, it’s getting difficult to retain their fuel customers, as they—the customers—aren’t phased by the prospect of driving a mile or two further if it means they get to fill their tanks at a cheaper price.

The question then is, what gas station owners can do in response to these price hikes so that they don’t lose their loyal fuel customers?

Offer E15 and E85 Fuels

E15 and E85 are typically priced lower than E10. So, if you sell E10 at your gas station, switching to E15 or E85 can help you protect your competitive advantage and retain your customer base.

Incentivize Customers for Paying in Cash

Cash payments will save you in credit card fees that you’re otherwise charged every time a customer swipes their card to make a fuel purchase at your pump. You can then pass on these savings to your cash-paying customers by offering them fuel at discounted prices.

Introduce a Loyalty Program

Introduce a Loyalty Program

Launching a loyalty program will further help you retain your existing customers in this volatile fuel price climate. Just make sure that the program is customer-friendly and offers a variety of rewards such as free products, cash-back incentives, birthday gifts and deals and coupons.

There are certain things that aren’t under your control as a gas station operator and gas taxes are one of them. They have been increased in the past, and you can expect them to increase in the future as well. However, with the right planning, you can ensure that your operation doesn’t get affected much by these movements, and your fuel customers continue to line up at your gas station to fill up their vehicles.

For further reading: From Forecourt to C-store: How to Pump Up Sales at Your Gas Station

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  1. Pingback: E15 Upgrade: Make Sure You’re Covered on the Equipment Side – John W. Kennedy Company Blog

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