Marketing: Stations Install Tech Marketing System as Ticket to Higher Profits
Getting customers to fill up on junk food and other products when they’re buying gas could be a way for local stations to pump up their own profits.
That’s what San Jose-based Ten Square hopes to see when they roll out a networked marketing system for gas stations in San Diego next month.
While customers wait for their tanks to fill, screens on the pumps will play coupon deals that encourage customers to head into the station’s convenience store to buy products.
The gas stations have a higher profit margin with convenience store sales compared to gas sales, explained Kathryn Scott, a Ten Square spokeswoman.
The margin on gasoline can be 10 percent, compared to a 38 percent profit with convenience store sales, she said.
So far, Ten Square has contracted with at least 30 stations in San Diego, said Jeff Miles, vice president of sales and development for the West Coast.
The company won’t release the amount they’ll be spending to implement the system in San Diego or across the country.
According to Miles, the price ranges according to the equipment each station already has at its pumps.
Some stations already have color or monotone screens compatible with Ten Square’s technology, in contrast to a single text display, which would need to be updated.
The gas station operator also needs to set up a phone line to connect Ten Square’s program, he said.
The cost could be as much as buying and setting up a laptop, Scott said.
Ten Square, founded in 1998, has 135 employees. Now in its third round of funding, it has raised $35 million, and some of its lead investors are major petroleum manufacturers such as Fort Wayne, Ind.-based Tokheim Corp. and Greensboro, N.C.-based Marconi Commerce Systems, the company said.
In San Diego, Ten Square began approaching gas station owners in December, Miles said.
Gas stations as far north as Oceanside, as far south as San Ysidro and as far east as Santee have agreed to implement the technology, he said.
The system was tested in seven convenience stores in Atlanta from September to December 2000, said a Ten Square representative.
Now, the system’s rollout will start with Phoenix, then Sacramento, then San Diego shortly after, according to Scott.
After that, it will be taken to Houston and Miami, she said.
For now, Ten Square plans to complete a national rollout of its technology within the next two to three years.
According to Miles, San Diego appealed to Ten Square because it’s an “attractive media market.”
San Diego’s weather was another major factor, he said. “It’s obviously more desirable both from [an] installation [standpoint], all of those kind of things, and for consumers because the application is outdoors,” he said.
Ten Square also found San Diego gas station operators particularly receptive to the idea of installing the technology, Miles said.
“There was a lot of strong interest from that market, and we moved more quickly into contracts in that market than we did in other cities,” he said.