In my iPhone, under ICE, for “In Case of Emergency” is, logically, my wife’s contact information. Not sure whom she would have people contact in the case of an emergency – my guess is that it would be one of my kids. That is probably logical, as well!
In our ever-changing world of retail oil sales, the notion of “emergencies” can take on many different personas. All owners have different things that are top agenda items to them, and others that, while important, aren’t looked at as critically. Historically, good service with fair pricing was more than enough to keep most customers happy and to earn a respectable living selling heating oil and equipment services.
All of that has changed and critical factors come at us harder and heavier than ever before. Keeping customers happy is more of a challenge, and trying to earn predictable profits with so many unpredictable variables sometimes seems like an insurmountable set of hurdles.
What is the most important: Making sure that prices don’t spike to your customers (price caps), efficiently delivering oil (tank monitors or perfected K-Factors), managing cash-flows (budget process and working capital lines), credit and collections, assuring yourself that Mother Nature won’t mess up yet another winter for you (weather protection), customer care (CSR training, websites, apps, etc.), customer acquisition, customer retention, employee training, other? Which one would be your top concern? Which one would be second? Third?
The myriad of skillsets required to successfully compete in today’s technologically advanced world have gone from moving towards leveling the playing fields (hey, everyone can have a website) to leaving those who are late adopters in the dust, and behind their more tech-savvy competitors.
We have never been supporters of technology for technology’s sake, and we will admit that there is what to be said for our industry not needing every bell and whistle that Google, Amazon and Microsoft has to offer. However, if you are lacking the requisite amount of Information, Communications and Efficiency (the new I.C.E.), you might find the uphill battle harder than when “the other guy” got his first fax machine, put out his first price cap, or started offering a budget plan.
The ICE acronym needs to be at the core of your business operations, as without it, hoping for stable prices and cold weather simply won’t cut it. Even more so, your access to all that you need is ready and available right now.
The Information that you need to fully manage your business most likely resides in your back-office system. It is a repository for more information than you thought you would ever need (and were likely right a decade ago), but can allow you to mine the information for data that can tell you a lot about future behavior of customers. If, for example, 80% of customers with a certain profile made a certain decision (say, chose a service plan), that only 30% of customers with a different profile made, you would want to market differently to those different profiles, instead of the classic, “spray and pray” marketing approach that is all-too-often employed by oil companies.
The information that you have access to today easily dwarfs what you had access to in the past. While that is good, it can also be quite daunting. The good news is that our industry gets to borrow from the best marketing and analytic industries out there, and use their “science” to our benefit. The models that are used in telecommunications, entertainment, and many consumer goods are not crafted for those specific industries, but crafted to take vast amounts of data and provide insights that can “move the needle”. Determining which customer is more likely to buy a service contract might not be as exciting as determining which movie is likely to be a breakout hit, but… we are in the heating oil business, not the movie-making business.
Communications (“C”) is at the heart of all customer experiences. Our industry is quite sensitive to the need to engage customers. We did it decades ago in person; then we did it on the phone. Eventually postcards, letters and newsletters became the norm (I SHOULD have said that as past-tense, but…). Emails have become quite common, and there is a growing group of companies who are trying to drive traffic to their websites to pay bills and get information. If, however, you want to know where your future needs to be, all you have to do is take a look at what those aged 15-25 do. In that case, it is NOT making phone calls, and it is no longer reading emails. Look at your next generation of customers (your kids?) and what they are doing right now. Odds are that they are on their smartphone and are getting every single bit of information they can imagine on one of the 75 apps on their phone.
There are many different uses for apps, and while we are not advocating the “Starbucks experience” (no one needs a croissant with their tank of oil), we are seeing more and more interest in communicating – push-notifications – via customer apps, and there is little doubt of the “stickiness” of those customers who have downloaded apps. “On-demand” growth is not purely a fiscal preference. It is a communications preference, as well.
Efficiency. Inevitably, it all boils down to your ability to deliver the same gallons in a way that makes you more money. The old adage that you can’t control the cost of your oil, nor the sales price, while true in many ways, disregards the optimization of company operations. If you were able to make one fewer delivery per year because you are using remote (and now affordable) tank monitors, or if you were able to make one fewer service call because your planning and dispatching was optimized, what difference might that make? How about if you knew all of your profit numbers, and shared them through the organization, so that you could “course correct” intra-month, instead of trying to “make it back” a month or two later, how much would that help?
Sometimes there are so many things that need improvement that it is so overwhelming – and nothing gets done. Look around at successful competitors in all industries. They don’t try to do everything at once. They formulate a plan, identify challenges, prioritize, look for experts, and then get things moving in the right direction. Look around at trade shows to see how the industry is changing. It is no longer about fuel additives and win-back postcards. It’s about data, customer experience, and running a tight ship in the new world. Information. Communication. Efficiency. Master those and you will have a great business to pass down to the next generation.
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