What Key Performance Indicators (KPIs) should you be tracking?

How to go about it?

In this 2-part series about Fuel distribution KPIs, you'll get a detailed answer for both these questions.

This series is based on the recent masterclass where industry veterans Pavan Maheshwari (founder of FleetPanda and ex-fuel distributor) and John Rettiger (President of Rettiger Energy Group) shared their hard-won insights on the metrics that actually move the needle. In Part 1, we talk about the 9 philosophies / principles of setting effective KPIs. In Part 2, we go deep into what KPI each department should be tracking so your entire organization is set up for success.

John Rettiger approaches KPIs with an owner's mindset: "When I approach a customer's business, I'm looking at it as if I bought the place - what would I do after having paid for it? If I was hired to sell this place in two years, what would I do today?" His focus is clear - pull the levers that drive sustainable earnings through four key areas: efficiency and utilization, sales effectiveness, margin optimization, and product cost reduction.

Pavan Maheshwari brings both technical expertise and real-world experience to the table. As an engineer who ran a fuel business before founding FleetPanda, he's seen firsthand how most companies operate without proper benchmarks. "It's often the first time they even have a baseline to compare against," he notes. "Most companies don't know their field efficiency, driver efficiency, gallons per minute, route efficiency, or density in a region." This lack of measurement is what inspired this deep dive into the metrics that matter - not just from a theoretical standpoint, but from seeing what works across hundreds of fuel distributors.

The Philosophy Behind Effective KPIs

At a glance, these are the 9 essential underlying principles that need to be kept in mind while crafting and implementing KPIs for your fuel distribution business. Lets us look at these in detail.

Align Compensation

"Here's one of the biggest misalignments in our industry," Pavan Maheshwari explains. "80 percent of your workforce - your drivers and field personnel - they're all getting paid by the hour. In fact, they get paid more if they take more time through overtime. That's 1.5 their pay rate."

This creates a fundamental conflict, as he points out: "Your workforce is incentivized to spend more time doing a job versus the business goal of being more efficient and doing the job fast."

This isn't about blaming drivers. They're doing exactly what the system incentivizes them to do. The question is: how do we align everyone's interests? Some companies have experimented with pay-by-load systems and other ways. So its worth it to think about how you can structure the variable pay in way that aligns the business interests to the driver’s interests. How “if the overall company saves 10, then the drivers can make 2 more.”

Metrics drive behavior - it's a simple truth that has major implications for fuel marketing businesses. As John Rettiger emphasizes, this is particularly challenging in sales, where compensation plans need to balance both growth and customer retention goals. But the issue extends beyond sales teams. Many back-office and field positions operate without clear metrics, resulting in arbitrary year-end bonuses that feel more like random gifts than performance-based rewards.

The solution? Creating transparent connections between company objectives and individual roles, so every employee understands exactly how their work contributes to organizational success. When metrics align with business goals, performance evaluation becomes meaningful rather than mysterious.

Be objective and clear

The path to peak performance starts with quantifiable success metrics for every role in your organization. John Rettiger says, "Every job should have a way to quantify success. Even if that's objectives like 'implement this by third quarter,' there has to be some way to objectively quantify what success looks like.”

The key is objectivity and simplicity. Your metrics should be system-generated rather than subjectively determined. "The more objective you can be, the better. When it's all built into the system - like your credit score - no one's deciding your score. It's just metrics and the stuff you do that decides your grade," Pavan explains. Technology makes this possible, providing automated, unbiased measurement tools that eliminate any perception of favoritism.

But here's the crucial part: keep it focused. Choose one or two key metrics per role rather than overwhelming employees with multiple targets.

Benchmark first

Pavan stresses the importance of understanding your baseline: "It's going to take you a quarter, maybe two quarters, maybe six months, a year to understand what your benchmark is. Only then can you reasonably start setting up targets because otherwise we would be setting up wishful targets. No one's hitting them and it's a complete roller coaster of morale for your team."

He provides practical advice: "Sometimes maybe just holding last quarter's success for another three quarters is a great KPI. You don't need to improve it, but you also don't let it slip."

John echoes this sentiment, "Sometimes it can be very demoralizing if you just lurch all the way to the end goal. Instead, benchmark where you're at and make improvement itself the goal. The 'getting better every day' mentality is just more powerful." This approach is especially crucial when tying metrics to compensation or performance reviews.

Informational vs Actionable

In fuel marketing operations, not all metrics carry equal weight in driving performance. Think of it like a health checkup: while you might track multiple vital signs like blood pressure, cholesterol, and weight, the actionable metric might simply be "reduce weight" - one clear target that improves overall health. As Pavan warns, companies often fall into "the rabbit hole of measuring everything," tracking data points simply because they can. The key is identifying which metrics actually drive behavior change versus those that merely inform.

The distinction becomes clearer through Rettiger's "the what, so what, now what" framework. Take billing accuracy as an example: The "what" is your metric (96% accuracy rate), the "so what" examines the operational or financial impact of that number, but the crucial element is the "now what" - diving into that 4% error rate, identifying root causes, and taking specific corrective actions. Too often, organizations get overwhelmed with informational metrics and never reach the "now what" stage, leaving valuable insights untapped and problems unsolved.

Structure positively

How you frame these metrics matters just as much as what you measure. Sales expert Thomas Freese calls this the "gold medals and German shepherds" principle - some people are motivated by achieving success (the gold medal of reaching 100% accuracy), while others are driven by avoiding failure (reducing that 4% error rate to 0).

That's why Rettiger recommends focusing on positive metrics like "invoice accuracy rate" rather than "error rate." When you have 100 drivers and five consistently perform well, highlighting and rewarding that success publicly drives positive behavior change more effectively than emphasizing shortcomings. The goal is to structure metrics in a way that motivates your specific team while driving actionable improvements.

Minimize using averages

Averages can be dangerously misleading in fuel marketing operations. As John Rettiger illustrates with a simple example: ordering shirts based on the average size of two people with vastly different builds will result in shirts that fit neither person properly.

Take one of Rettiger's clients: their tank fill efficiency averaged 43%, which seemed concerning but not alarming. However, when he dug deeper, he discovered that 73% of deliveries weren't achieving the target 60% fill rate. Even more revealing, among customers with tank monitors, only 55% of deliveries were hitting this target. "Averages are generally useless. At least actionably they're useless," Rettiger emphasizes. The real impact? With their current 571-gallon average delivery, they could be delivering an additional 250 gallons per stop at minimal extra cost - just two dollars in driver time for what becomes "virtually 100% profit."

Segmentation is key

Segmentation transforms vague data into actionable intelligence. As Pavan explains, different business segments have fundamentally different behaviors and needs: "You're running a wet hosing business serving construction businesses, farms, and fleet fueling - you probably want to segment these because they're going to have different behavior." The pricing tolerance varies dramatically - a construction company might readily accept a $200 delivery fee, while a landscaping company moving 40 vehicles would balk at $500.

This extends to operational segments too. "Your daytime drivers versus nighttime drivers might have completely different profiles," Pavan notes. The solution? He recommends using histograms - breaking data into buckets of 20-30% segments. "It's so much easier to make something that is 30% efficient go to 70% efficient than trying to make something that is 90% efficient go to 95%," he explains. This targeted approach helps identify which segments need immediate attention and where the biggest improvements can be made most efficiently.

Most importantly, as Pavan warns, "Anything worse than no data is wrong data." Better to accurately measure a subset of your operation than to combine disparate segments and draw false conclusions. For instance, if you have 100 tanks but only 50 have monitors, measure those 50 separately rather than mixing incomplete data sets.

Give yourself time and be consistent. It’s work

Implementing effective metrics isn't a quick fix - it requires consistent effort and senior-level commitment. As Pavan points out, even successful business owners like Carl Kleimann from Moffitt Services dedicate "one hour a week, possibly sometimes two hours a week" to working with their technology teams, constantly questioning and refining their approach.

The journey can be emotionally challenging too. As John Rettiger shares from experience, when presenting opportunities for improvement, he's "seen this go ashen white, just turn red, turn white" as clients realize they might have "a third too many tank wagon assets." The key is not to get discouraged. "Don't beat yourself up too bad," Rettiger advises, acknowledging that limited data and technology constraints are common challenges across the industry. He recommends joining study groups or talking to peers where you discover "everybody's terrible at this" - it's a universal challenge that requires time and persistence to overcome.

Don't overcomplicate it - Pick a few and start small

The path to effective metrics starts with simplicity: "Pick two or three metrics that matter to your business and then start there," Pavan emphasizes. This focused approach helps eliminate what Rettiger calls "immaterial infrequent things" - issues that seem important but prove insignificant when analyzed through the "what, so what, now what" framework.

Often, companies track metrics simply because they've always done so, not because they drive meaningful improvement. As Rettiger notes, "Sometimes it's stuff that the customer's been tracking forever and they think it's just a big thing. And it's like, this really isn't anything. It's really not helping your business." The solution is to start small, focus on metrics that demonstrate clear operational or financial impact, and build from there.

Now that you are armed with the underlying principles and frameworks, in part 2 we discuss the exact KPIs that each department should consider measuring.