Operators Slice And Dice Data for Business Insights

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Information is everywhere and the number of sources producing information is constantly increasing.

Big data—a popular term used to describe the growth and availability of both structured and unstructured information—is changing the way many companies operate. Today’s operators are relying on insights from their customers, internal processes and business operations to uncover new opportunities for growth.

The challenge with any data set is converting it into useable information by identifying patterns and deviations from those patterns. By analyzing both internal and external sources of data, operators are able to better understand their customers, identify trends and predict sales.

“Data in a snapshot is almost meaningless. It is the trend analysis that is the most important thing to do with data,” said Tom Heinz, president of Coffee Cup Fuel Stops Inc.

Heinz reviews data and business metrics daily and looks at the numbers year over year, month over month or even broken down by the time of day, he said.

There are many ways to look at metrics, comparisons and ratios, and the data operators should look at depends on what they’re trying to understand, said Darren Schulte, vice president of membership for NATSO.

For example, looking at sales and customer counts by time of day helps Heinz build his staffing matrix. “Since we’ve been refining our labor matrix, we go back and refine them by the hour.”

Examining the bi-weekly payroll dollars versus sales numbers in the departments can help operators stay ahead of over/under staffing. “Some people use their gut feeling when doing their schedule, but you can look at the sales data to see when you are the busiest,” Schulte said. “But, just because most of your sales data is from a certain day, that doesn’t mean it is your busiest day.”

Deanne Schatz-Eisenschenk, operations manager of the Petro Stopping Center in Fargo, N.D., monitors her profit and loss statement monthly to look at margin percentages and if gross profit margin dollars are increasing or decreasing. She also looks at fuel volume/deal reports and inventory-on-hand versus sales.

One of the biggest mistakes operators make is forgetting how revealing some of their data can be. “Often times you may look at the number but not focus on the trend of that category,” Heinz said.

For example, during the Great Ideas session at The NATSO Show, executives from Wawa said the two metrics they look at daily are transaction count and gross profit. “Those two matrixes are critical,” Heinz said. “If they keep going up, you’re doing something right.”

Operators can dig a little deeper to look at what the numbers really mean. “You may look at your gasoline sales and see that you’re super busy on a particular day but then realize that on that day, 90 percent of your transactions or more were paying at the pump,” Schulte said.

When looking at data, operators should examine weekly sales and transactional data. Direct comparisons can reveal a lot, but operators need to be careful. “You may be looking at a Tuesday this year that was a Saturday last year. When you do comparisons be sure to understand what you’re really looking at,” Schulte said.

sectionseparator.jpgQuick Tip
Data itself doesn’t provide value, but its analysis does. NATSO members are looking at their information in a number of ways to identify trends and gain insights into new products and services that are boosting sales and increasing profits.sectionseparatorplain.jpg

Uncovering The Data
While there are a number of data sources operators can tap into, Schulte said that often times, less is more. He recommends operators start by looking at their most accessible data first. 

Most POS systems already have some sort of a reporting tool, and Schulte recommends operators first look at what their systems can do. “Look at the simple data you get off of your current point-of-sale or other system. It can be something as simple as tracking your daily sales, the number of no sales your register has, how much fuel is in your tank or your inventory in your food service area,” Schulte said.

“Then figure out the top 10 things are that are important for you to look at daily (for ideas, see below) and create a report or put them in a spreadsheet. Even if your system can’t put the information together for you, it is still collecting it,” Schulte said. 

Schulte said most operators tend to think more data is better, but they may already have all of the information they need. “It is important to remember that even without sophisticated point-of-sale (POS) systems, each of the operators in our industry has a plethora of data that they can capture,” he said. 

In addition to data collected from the POS, a large amount of data can be collected just by asking, observing and simply tracking on pen and paper.

Often times, vendors can supply locations with their purchasing report, but in order for that report to be helpful, operators need to compare the data with their internal reports. “If you don’t actually go the extra mile and do some hard-core comparisons to what you actually sold by using your back-office system, you don’t really have anything other than what you bought. You have to use that data to figure out how to compare it and balance it with what’s sold,” Schatz said.

Schulte said that all vendors should be providing operators with some type of review that shows trends in a particular region. “They will not share the names of the competition, but what they can do is color code the competition and show comparisons with Store A, Store B and Store C. They should also be able to share regional, national and local information with you,” Schulte said. “A quarterly review is the best way to do it, but at least once a year.”

Using Data To Inspire Action
While information is king, operators should ask themselves if they’re collecting data for the sake of collecting it or if they are acting on it. 

“Collection of data does not make you a better operator and collecting data because everyone else is doing it does not make you more profitable. It is the collection of data that is actionable and that you execute makes you a better and more profitable operator,” Schulte said.

Schatz-Eisenschenk uses her data to influence future business decisions. “Numbers never lie,” she said, adding that operators have all the data that really matters inside their store or their back office. “You can make decisions on what is or isn’t selling based on real numbers that actually ran through your till, and then decide if it’s time to either move something to another area, get rid of something, etc.”

The sheer amount of data operators have coming in from multiple sources can be overwhelming. To keep his data organized, Heinz uses a pro-forma matrix he built himself. “The back-office systems also come with a lot of menu driven reports,” he said. 

Schatz-Eisenschenk organizes her data by month and divides it into the categories that drive her business. “Meaning I keep a file on Pepsi/Coke, Frito Lay, RJ Reynolds, Philip Morris and our grocer,” she said, adding that while she can’t do anything about the margins on some of the items, she can maximize profits on her grocery items. She does that by maximizing the space allocated to those products, including private-label waters, deli foods made in house and grocer specials.

For Schatz-Eisenschenk it is also important to know who her customers are. She looks at data from PRS every month. “They detail our fuel transactions down to the company and to the profit off of that company, and you can adjust those deals based on usage or whatever your fuel discount strategy is or isn’t,” she said.

Schatz-Eisenschenk said the report is an excellent tool even for operators who don’t have fuel deals in place to see who is fueling at the location and who is using a fleet card. It helps identify which customers you should connect with either to deepen your business relationship or if you want input on ways to improve, she said.

Using Big Data To Make Sense Of Your Data
Not only does Heinz look at internal data sources, he also reads a variety of publications to stay current on national and global news. “Reading the papers let’s you to keep a pulse of what is going on,” he said. “In today’s environment you can’t just look at what is going on in your own company. You have to look at what is going on in your market, your state, the nation and the globe.” 

To help operators stay current on industry-related news, the NATSO Foundation’s Biz Brief compiles the latest news on topics such as leadership, freight logistics and economic indicators that either do or will affect truckstop and travel plaza operations. The briefs provide the daily business intelligence via email, and operators can sign up at http://www.natso.com/natsofoundation (learn more about Biz Brief on page 20).

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Biz Brief
The NATSO Foundation’s Biz Brief compiles the latest news on topics such as leadership, freight logistics and economic indicators that either do or will affect truckstop and travel plaza operations. If you are a NATSO member, you can sign up to receive the NATSO Foundation's Biz Brief here.

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While Heinz looks at his internal data on traffic counts, if he sees that something is changing, he takes it a step further and taps into external data sources to understand why.

For example, if heavy-truck traffic counts are down, Heinz turns to the Department of Transportation to compare trends within his locations to overall traffic trends. “I also go to the scales and ask what is the traffic count doing year over year at the scale and they’ll tell me. Car traffic is the same way. They have counters set up throughout the state and you can look at the overall data,” Heinz said.

When Heinz sees shifts in gas volume, he looks at the trends in the average miles per gallon for new vehicles. “You can talk to the car dealers or walk the car dealer lot and see what the new mileages are on the stickers,” he said.

Heinz also turns to industry and business magazines to stay current on overall data. “I look at Transport Topics and other periodicals to see what new truck sales are doing. The average number of new truck sales indicates what is going to go on with diesel volumes and DEF volumes,” he said. 

Heinz also turns to national data to keep current on labor trends. “Naturally they put the labor reports out every two weeks on the national level. They have local labor statistics and what is going on in different markets. It is good to know how that trend is going to know where your pay scale is and if your pay scale is right for your market,” he said.

Heinz also keeps an eye on the price of crude oil prices. “I look at what direction crude is going every day. That sets the cost of both of our major commodities—gas and diesel,” he said. 

For several years Heinz has been following railroad trends. “The Bakken oil field in North Dakota and the amount of oil being moved by rail is changing transportation in the Midwest,” Heinz said.

“The widening of the Panama Canal and how much money they’re spending revamping the ports on the East Coast tell us that shipping is going to be changing,” Heinz said. 

Schulte said that whatever ratios, comparisons and metrics operators are going to look at, they should look at them regularly without fail. “If they are daily metrics, then you view them and discuss the findings with members of the management/ staff daily. The same applies to weekly and or monthly metrics you review,” he said. 

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Metrics Operators Should Measure Daily and Monthly
While simply collecting data does not improve a location’s profitability,
it does create actionable takeaways. To ensure those takeaways are meaningful, operators should review certain metrics on both a daily and a monthly basis. Darren Schulte, NATSO’s vice president of membership, recommends operators tap into this data on a daily basis:

  1. Fuel gallons sold for both diesel and gasoline compared to the daily average, budget and last year.
  2. Retail sales compared to the daily average, budget and to last year.
  3. Food service sales compared the daily average, budget and to last year.
  4. Retail inventory level daily and compared to last year.
  5. Invoice deliveries, including fuel deliveries.
  6. Labor ratio to sales.
  7. Returns.
  8. Voids, no sales, item corrections and drawer open too long.
  9. Average ticket/sale per register, shift and overall day in each profit center.
  10. Transaction counts compared to last year in each profit center and as a total.

But, it doesn’t stop there...

Schulte also recommends these simple yet effective monthly metrics:

  1. Gross margin dollar and percent comparison in all categories compared to last year and budget. You may also want to consider looking at fuel profitability as a percent instead of cents per gallon.
  2. Total labor cost [benefits, training, etc.] comparison to last year and budget by profit center.
  3. Inventory shrink variation compared to last year and budget.
  4. Comparable sales for all profit centers including shop, quick-service restaurants, restaurants, etc., as well as to budget.
  5. Profit and revenue dollars comparison for “other income” to last year and budget, includes ATM, video arcade, showers, parking, etc.
  6. Fuel margin per gallon compared to last year and to budget.
  7. Total operating expenses divided by total fuel gallons sold. 

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This article originally ran in Stop Watch magazineStop Watch provides in-depth content to assist NATSO members in improving their travel plaza business operations.

The magazine is mailed to NATSO members bimonthly. If you are a member and not receiving Stop Watchsubmit a request to be added to the mailing list. Not a memberJoin today or submit a request to receive additional information.

Mindy Long's photo

Mindy Long

Before launching a full-time freelance career, Long edited NATSO's Stop Watch magazine. Prior to that Long worked as a staff reporter for Transport Topics, a weekly trade newspaper, covering freight transportation, fuel and environmental issues. In addition to covering the transportation sector, Long has written, reported and edited for a variety of media outlets. She was the Washington correspondent for WCAX-TV (CBS) in Burlington, Vt., a criminal court reporter in Chicago and a freelance copy editor for Kiplinger’s Personal Finance magazine in Washington D.C. Long hold a master’s degree from Northwestern University’s Medill School of Journalism in Evanston, Ill., and a bachelor’s degree in Communications from Westminster College in Salt Lake City.More
Source:
Stop Watch Magazine
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