How to Justify Tank Monitoring Costs to Your Customers
By Carolina Ruiz • Published March 19, 2021 • 4 minute read
For marketers and distributors of fuel, lubricants, or propane, the main reason to adopt a tank monitoring strategy is profit. Tank monitoring improves efficiency across your entire distribution strategy, so you can improve your margins and focus on securing new loyal customers.
Marketers are beginning to realize the value of digitally monitoring tanks with SkyBitz Tank Monitoring solutions, and those investing in systems that build long-term efficiency will rise to capture the lion’s share of the market. According to research firm Berg Insight, the CAGR of active remote tank monitoring solutions will hit 37.2% by 2022, reaching an estimated 8.6 million units worldwide in 2022, up from 1.8 million units in 2017.
Reasons to justify the cost of adding a tank monitoring solutions to your operation:
- Upholding your reputation and creating more loyal customers
- Realizing profitability through more efficient deliveries
- Reducing wasted fuel and labor costs by being more strategic with your fleet
- Saving time and costs associated with physical inventory assessments
- Improving operational efficiency with integrations into back-office systems for performance tracking
There is no set standard for how tank monitoring is billed in the industry. Some marketers eat the cost as an efficiency expense and some charge all or some of the cost to their customers. For marketers, the ROI comes from several areas, including reducing expensive milk run scenarios, decommissioning expensive trucks, and reducing the number of drivers.
Marketers need to educate distributors on the value of data, proving there is as much value in it for their customers as themselves.
Smart distributors that monitor usage data can project optimal fill levels and work with their marketers to improve purchase and delivery processes. Accessing the marketer’s monitoring platform can provide distributors with greater insight into their tank levels, boosting confidence in the partnership and providing a value-added service.
Distributors can also take advantage of economies of scale, use them to their advantage, and leverage fluctuations in the oil market to pinpoint the absolute best time to buy.
The transition to digital monitoring is happening, and it’s happening at a swift pace. The entire supply chain benefits from tank monitoring data used across each distribution point, from bulk tanks to downstream deliveries.
Leaders in their market that recognize this will use it to their advantage and be part of the 8.6 million operating more efficiently by 2022.