First of all, what is retargeting?

Retargeting, also known as remarketing, is a specific type of banner advertising that can help you keep your brand in front of people who have shown an interest in your product or service.

Retargeting is a cookie-based technology that uses a bit of code to “follow” your audience. So, if a consumer comes to your website, they have shown an interest. Or, if they do online research and read an article about your product, they have shown interest. Once this happens, a cookie is dropped on their computer, which will be recognized by publisher websites (any site that displays advertising, such as ESPN, Yahoo Mail, USA Today, etc.) Once the publisher recognized that cookie, your ad will then be displayed only to that particular consumer. Simple. And highly effective.

So, why should you employ this type of advertising?

Well, the truth of the matter is, retargeting actually delivers very few clicks. Unlike a PPC campaign, which will “click thru” at a rate of 1%-2%, retargeted consumers click thru at rates in the hundredths of a percent. So why do it?

The answer lies in some interesting data about click thru and conversion. The ultimate goal of a click to your website is what we call a conversion—an action taken by the consumer, such as a form submit, email, or phone call. But a conversion can actually take multiple clicks from the same consumer! In fact, according to SearchEngineLand.com, the average number of days between the first visit to a website and the eventual conversion is 3.5. That means it can take multiple visits before a consumer is ready to contact you.

And what does retargeting do? It displays your ad to that person during the decision making process, making it more likely that they will come back to your website and become a customer.

Does it make sense to spend advertising dollars on delivering your message to consumers who have already expressed an interest in your product or service? Absolutely!

If you’d like to learn more about retargeting, I’ve included links to some great articles on the subject. Or, you can also call or email me.

During the years, there have been plenty of times when the Chicken Littles have sounded their alarms that the oil heat sky is falling. But this time it feels different, doesn’t it? For those of you who sell oil, doesn’t it feel like the industry is weary? Weary of fighting an 8-front war against competing fuels, declining gallons, unfavorable government policies and regulations, volatile markets, difficult customers, dwindling infrastructure, unhappy banks, and frankly, each other.

The weariness shows up in declining attendance at trade shows; in the constant struggle for associations to engage active members, in the number of companies contemplating selling, and in the general tone of pessimism that has crept into conversations about the future of the product.

Maybe, as one client said recently, this is how it felt to be a coal company observing the accelerating growth of heating oil, and struggling with the decision to stay the course or embrace change.

No one has a corner on the best way to play the future trends. But I have had the good fortune of focusing on this with some of the best companies in the industry through our Breakthrough Groups. The picture that is emerging from them is insightful. By design, the companies who participate have already decided they need to evolve, diversify and improve. Based on recent discussions, if I were running a heating oil based company, here’s some things I would be paying attention to right now:

Diversification offers a good road forward, but it is not without potholes.

If it were easy making money selling general HVAC services, plumbing, insulation, energy audits, you name it, we’d see a lot more big successful companies in that space. The fact is, it’s hard, and often involves the kind of hyper-focused attention to labor management, flexible pricing, and hard core sales and marketing that fuel dealers traditionally have neither embraced nor excelled at.

Of course, you do bring some real advantages to this party—namely, strong relationships with an existing base of customers, good name recognition in the community, better access to capital than most of the competition, technical strengths in some of these areas, and stability.

But there are disadvantages too.

Here are the ones that our group members have identified, and are trying to address:

1. You are well known, but you are known for the wrong product. You need to get the public to see you as more than a heating oil company. (By the way, if your marketing agency suggests you put in your ads “we are more than just a heating oil company,” fire them. Email me if you want to know why.)

2. Your legacy business can get in the way of your new ventures. Some of you are so afraid of offending our existing fuel base, you constrain promotion. This happens especially when companies are moving into propane or discount oil, or start doing installations of gas fueled appliances. Do you make sure your customer base knows you do conversions, or bury it on a statement somewhere? Do you use your own trucks for discount deliveries? Do you change your name, or operate a business under a different one? Do you charge your oil customers the same way as you charge non-fuel?

   It turns out that there are multiple ways to do this dance. But many of you tend to see things in black and white, or import your old sacred cows into the new business. This “in the box” thinking really undermines your ability to approach these new opportunities as they need to be played. The companies that are successfully diversifying are very conscious of this tendency, and do a good amount of self-examination and benchmarking to reveal their blind spots. It is one thing to say we’re now a “total energy company.” It’s another to actually think it deep in your organizational bones and act from there.

3. Many oil companies have developed an intrinsic conservatism over the years. Because it is so hard to find new oil customers, they are now more motivated by fear of upsetting their apple carts than by the opportunity to find some oranges, bananas, and god forbid, papayas. We do not embrace experimentation easily, and equate it with risk. In fact, it is the resistance to change that poses the greatest risk.

4. Most fuel dealers have spent years developing a culture that takes pride in “coming through for our customers no matter what.” You go through crazy situations to keep people warm. You bend over backwards so much that Gumby is jealous.

   Unfortunately, that approach, while admirable, is insufficient to win in an environment with fewer gallons per customer, more aggressive competitors, and, most importantly, a customer base that increasingly wants more than just “great service.”

   My friend David Singer (Robison Energy, Westchester, NY) aptly characterized this challenge after sitting through a day of group discussions. “We have traditionally managed to margin and customer satisfaction rather than to profit. If we handled the first two, the third generally worked out. That doesn’t work anymore, because our real margins are increasingly constrained, and great customer service is not enough to defend against everything we are up against.”

   Instead, our groups are finding, you need to get much better at managing the details of your business—particularly the performance metrics that are the early warning signs of profit saboteurs. For that to happen, however, you need to be able to get better business intelligence. You need to act quicker as our winters seem to be getting more condensed, and there’s less margin for error. And, as your business gets more complicated through diversification, these needs increase.

   There’s a terrific new product just out called BRITE, (BRITEinfo.com) from the guys at Angus Performance Advisors (a subsidiary of Angus Energy.) It enables you to quickly and easily see what is actually happening in your business, so you can take action faster. We’ve been involved in marketing it, and I’ve been extremely impressed by its capabilities.

5. “If you can’t change the people, change the people.” Craig Snyder, who is doing big things at Wesson Energy in CT, first introduced this at one of our group meetings, and it’s worth keeping in the forefront. Craig has led a huge transformation of that company from a traditional oil supplier to diversified energy firm that also sells propane, general hvac services, and is a leader in the home efficiency space. He has come face to face with the practical difficulty of getting members of his team to embrace a different kind of future. He’s responded by investing significant resources in training and communicating the new vision. And it has resonated deeply with many on his team. But not everyone. And he’s had to let them go.

   You can’t be afraid to change your people, if the people can’t, or won’t change. Several of our members ran headlong into this when they finally started evaluating their sales compensation plans, and realized they were legacies of a by-gone day. Sort of like a three martini lunch. Great to reminisce about, but the just doesn’t work anymore.

   In each case, they ended up replacing between 75-100% of their equipment or fuel sales men. And in virtually every case, sales went up substantially.

   You need to give your team the tools, training and time to evolve. But don’t underestimate how threatening change is to some people. The problem is that you cannot afford to stand still and accommodate their fear. Because the dangers of inertia are multiplying, and the wolves are at the door.

Just a few years ago, that question would pop up once in a blue moon. Most fuel companies are multi-generational—they can barely be convinced to update their logos, let alone change their names. In fact, the only time this used to come up was after an acquisition. Should you keep the name of the company you bought, or absorb it into your brand?

Now, it’s a new ball game and many of you are trying to decide whether the names on your jerseys are an attribute or liability—especially if you are serious about diversifying. If propane is a big part of your future, or air conditioning, or plumbing, is your “oil” identity an albatross? I imagine many of your grandfathers faced the same question as they were evolving from the coal or ice delivery business.

Today, the rage is to convert from Joe’s Oil to Joe’s Energy. It’s a reasonably simple transition—it even has a similar number of letters. But it neglects the fact that most customers don’t quite know what that means, because it covers such a broad spectrum of possibility. Other companies have changed to “Joe’s Oil & Propane”, or “Joes Home Services”, or “Joe’s Heating and Cooling Products”, or simply “Joe’s”.

We are involved in a large number of these discussions, because much of our business is focused on helping companies evolve and diversify. Here are a couple of things to think about if you are considering changing your name:

1. Even if you are very well known in your area for delivering fuel oil, it rarely makes sense to abandon your name altogether. First, while your oil brand can deter some folks from feeling comfortable with calling you, it’s much better to be known for something than not known at all. We’ve done some significant research on this, and can share the trade offs if you give us a call.
2. What you decide to call yourself is not nearly as important as how you promote yourselves. Changing your name is the first step in repositioning your brand. It does not do it automatically. Your customers, let alone your overall market, don’t suddenly go “Oh, I guess they really are experts at air conditioning installs” simply because you drop oil from your name. Or add Heating and Cooling. For that to happen, you need to really promote your capabilities in these other areas.This is not simply a logo redesign project. It is time to re-evaluate your unique value proposition and how you are going to communicate that across all your business segments. The smartest companies are focusing on their overall brand strategy, rather than just a name and logo change.
3. Some common missteps:
   • Leaving your website address, email, or phone message alone. I don’t care what your ad says, if your web address is joesoil.com, that’s telling them you are an oil company. (There are issues with changing your URL. If not done correctly, you can lose history with the search engines which will affect your rankings, so talk to us first.) Likewise, if your phones are still answered “Thanks for calling Joe’s Oil,” as opposed to “Thanks for calling Joe’s Oil and Propane,” you are speaking volumes.
   • Leaving your website design the same, or simply adding a new section for new products. If you want to be equally considered for oil, nat gas, a/c, etc., your oil pages should not overwhelm the other content, or its location on your site (to see how we approach a similar issue, look at our website.)
   • Not leveraging your name change for all it’s worth. If you’re going to change your name, then spend some real money defining what that means for current customers and prospects, and for your own employees for that matter. You want your current oil customers to know you’re not leaving them behind and to feel comfortable buying other products from you. You also want your market to perceive you differently. That won’t happen unless you push it.
   • Whatever you do, don’t say, “Joe’s Oil now sells propane.” Why would anyone want to do business with a rookie? Take advantage of the fact that most of your customers and the market don’t really know all the things you do, and just promote your services as if you’ve been offering them for a while.

There are many nuances that should be included in a thoughtful process for making this decision. It should be an offensive strategy, rather than defensive (ok, maybe that wasn’t quite the right adjective, but you get the picture.)

If you’d like to run anything by me, feel free to email me at rgoldberg@warmthoughts.com or call me at 201-330-9276. Just don’t call me, or yourselves, bad names.

“24 out of the 25 largest newspapers are experiencing record declines and newspaper advertising is down almost 20%.”

“Only 18% of traditional TV campaigns generate a positive ROI.”

“Yellow Page advertising continues to decline and the Wall Street Journal predicts an additional 39% drop over the next few years.”

Given the quickly shifting landscape, many propane companies are struggling to figure out where their future customers will come from. To make matters worse, usage is declining (thanks to advances in efficiency), competition is growing, and the economy remains stubbornly weak. We know we have to advertise our business, but how, and to whom?

When I talk to propane business owners about search marketing, I frequently hear, “I tried pay-per-click. It doesn’t work.”

Well, the truth is, it does work. But you have to do it the right way.

Before I get too far into this, let’s go over a few terms you’ll need to know:

3 Ways to Kill a Pay Per Click Campaign

Let’s look at some of the reasons PPC campaigns fail.

1. Insufficient budget.

   PPC efforts fail for those who stick a toe in the water. Throwing a few hundred dollars a month at a Google Adwords account is basically throwing your money down the drain. There is a real science to determining how much money a campaign needs to work effectively, and it depends entirely on how much search there is on your products and services in your particular market, and how competitive the landscape is. Let’s do the math. Let’s say there are 20,000 searches per month on your keywords. That means that your ad could potentially show up 20,000 times.

   20,000 impressions X 1% click thru rate = 200 clicks. If the average cost per click is $5.00, you have spent $1,000.

   Our websites generate about a 12%-15% click to call ratio, so your $1,000 would net you 25-30 calls at an average of $33 per call. If you convert just 20% of those into sales, you got five or six new customers at a cost of $1,000. That’s a customer acquisition cost of $166. If you assume a one-year gross margin of $800 per customer, that’s a pretty good number. And if there are 30,000 searches, or your website generates a higher number of calls, or your team does a better job of converting leads into sales; your numbers are even better.

   But if you set your budget at $500, on average that gives you $16 per day. A few clicks early in the morning and you’re done for the day! 12% - 15% of three is basically nothing so chances are you’ve acquired no new customers and you’ve wasted your money.

   Bottom Line: Done correctly, pay per click is science and math. Throwing spaghetti against the wall to see if it sticks is not the right approach.

2. The budget is spent on words that don’t convert.

   In search marketing, a conversion is the term used to describe a user taking action on your website: calling the phone number, filling out a form, or submitting an email. Conversion is the ultimate goal. It’s what turns traffic into actual leads. And in the world of search, some keywords convert better than others, sometimes, in some situations. Sound complicated?

   Let’s look at an example. At 1.5 million searches per month, the word propane is a pretty popular keyword. Propane delivery, on the other hand, is only searched about 8,000 times per month but it’s much more specific and relates more directly to your business. Chances are, users who come to your site from propane delivery will convert more frequently that those who come from searching propane.

   Bottom Line: Bidding on keywords without knowing which words convert at the highest rate is a sure way to throw your money away.

3. The website isn’t built to convert.

   There are a lot of similarities between selling on a website and selling in person. The most important, is that you have to ask for the sale.

   If you want your visitor to do something on your site—call you, email you, or submit a form—you have to ask them to do it! Doing something as simple as having a graphic box that says, Call now to find out about our new customer special! is more likely to convert than a website that just lists your products and services.

   Bottom Line: Spending money on buying keywords and then not having a call to action once the user lands on your site is not a winning strategy.

Now that we have talked about why PPC campaigns fail, let’s review how to help them succeed.

1. Optimize

   Select the right keywords to purchase. You can use the Google keyword tool to help you. Or even better, use a service that will do the legwork for you—the data will be more accurate that way as well. (If you’re interested in learning more about these services, drop me a line. I’d be happy to walk you through the pros and cons of the various services available.)

2. Promote

   Compose advertising copy for each one of your pay-per-click ads that will make your message stand out. A quick review of the ads shown here (which were served up for the search propane delivery service in the Northern New Jersey area) clearly demonstrates that ads are written to deliver a specific marketing message—some obviously better than others. It is critical to determine your competitive advantage and craft the language that will make the phone ring.

   

3. Engage

   Engage your potential customers with a reason to do business with you. The landing page—defined as any page on your website on which a user “lands” after clicking through from a search page, ad, or link—must have a strong call to action. You managed to get a potential customer’s interest, now get them to ACT NOW!!

4. Measure

   The most important driver for success in a PPC campaign is to measure your results. How many phone calls and emails are you getting for how much you’re spending? Which keywords are driving the highest numbers of phone calls? If you don’t have a handle on this data, how do you know where to spend your money for the greatest return?

   As an example, if propane delivery service costs $5.00 and results in two phone calls in a one-week period, and propane supplier costs $9.00 and delivers three calls in the same period, which word has the better ROI? In this example, you spent $10 on two phone calls and $27 on three phone calls. While the latter is higher, it is certainly worth the extra money!

   And if overall, you spend $2,000 in one month, how many new customers do you need to acquire in order for the campaign to have been worth the investment? Five? Ten? If you know the answer to that question, you can easily tell on a month-to-month basis if your program is working.

   The following table shows actual results from a propane company in the Mid-Atlantic region for one week at the end of August. Their cost per call works out to $19.65. If they convert 25% of those calls into sales, their customer acquisition cost is less than $80. Now that is a successful program.

   Date	Spending	Impressions	Clicks	Calls
   8/31/12	49.02	1179	23	7
   8/30/12	90.87	1393	21	3
   8/29/12	127.95	1248	35	6
   8/28/12	107.64	1197	31	5
   8/27/12	123.99	1094	35	8
   8/26/12	56.22	1153	15	0
   8/25/12	33.87	1011	12	1
   TOTAL	589.56	8275	172	30

   Keeping your customer acquisition costs low is the way to win the marketing battle. Across the marketing mix, from direct mail, to newspaper advertising, to Yellow Pages, radio, billboards and cable TV, it is clear that pay per click wins. But before you charge ahead, do your homework. Analyze your current website and your market. Determine the right keywords and budget. And above all, measure and analyze again. The victor is the one who acquires the most customers for the least amount of money.

Ben Gutkin is vice president of marketing for Warm Thoughts Communications, the nation’s leading marketing firm serving the needs of the residential energy industry. He manages dozens of pay-per-click campaigns for propane, heating oil, natural gas and HVAC companies across the country. Contact him at bgutkin@warmthoughts.com.

COMPANY X CUSTOMER ACQUISITION CAMPAIGN

This past fall, our client came to us with important, but nonspecific objectives. They wanted to:

• Acquire new heating fuel customers
• Increase equipment sales and service to existing customers
• Acquire new HVAC customers (equipment sales)

How many customers in each category was unknown, but there was a fixed dollar amount in the budget. We elected to approach this assignment using a multichannel marketing strategy. A combination of well-optimized web landing pages, pay per click advertising, direct mail and newsletters would allow us to reach multiple audiences and reinforce our message across different media.

By using unique tracking phone numbers, we were able to measure the results and cost to determine how effective the campaigns were. The results follow:

Heating Fuel Customer Acquisition: Budget $60,000

• Landing Page
  Pay per click leads: 447
  Cost per lead: $18
• Direct Mail
  Leads: 584
  Cost per lead: $90

Obviously there is a big difference in cost between direct mail and pay per click, but both channels have their role to play, and reinforce each other. The customer online is more likely to click an ad if they can say, “Oh, this is the company I just got the postcard from, let’s see what they’re offering.”

HVAC Customer Acquisition: Budget $45,000

• Landing Page
  Pay per click leads: 110
  Cost per lead: $109
• Direct Mail
  Leads: 122
  Cost per lead: $266

As you can see, the cost of generating a lead for a new furnace is significantly more than the cost a new heating oil customer lead, but then you already knew that didn’t you. Then again, what is the margin on a new furnace install?

Marketing HVAC to Existing Fuel Customers: Budget $10,000

• Company Newsletter and Direct Mail
  Leads: 93
  Cost per lead: $108

What We Learned

Now that we know what our CPL was, we have to translate this into cost per customer acquisition (CPA). Because each product is different, and each type of customer is different (existing customer vs prospect) the cost per acquisition varies from campaign to campaign. However to keep it simple, let’s assume an average lead-to-closed sale conversion rate of 40%.

Heating Oil – Generated 412 new customers at an acquisition cost of $166 each. If you compare that to the value of a customer in a merger/acquisition, this is clearly an effective strategy.

New HVAC – Generated 93 equipment sales at a cost of $484 each. While this number seems high, consider that this company spent $45,000 to generate $560,000 in revenue. Provided that the jobs are priced correctly, this is a positive ROI.

Current Customer HVAC – Generated 38 equipment sales at a cost of $263 each. As we already know, it is cheaper to sell more to our existing customers than it is to acquire new ones, and it is always worth marketing dollars in newsletters and other efforts to grow from within your base.

So two very important things were learned. The first is that the campaigns closed new business at a cost that was appropriate for the client. The second is that we now have a benchmark. For the next campaign, we know how to set the budget both on number of customers acquired or units sold, and also on the actual dollars required for the marketing game plan.

If you would like to learn more about the process or how this can work for your company, please call us! We’d be more than happy to help you grow your business at a cost that you can anticipate and budget for.

It feels like we’re fighting a six-front war – No gallons, high prices, a crappy economy, hyper-competitive offers, cheap natural gas, a customer base increasingly willing to churn – with no end in sight. Have I left anything out?

It’s not my style to focus on the difficulties without offering solutions. This year, it just feels just more daunting. The fact is that there are no easy solutions to the multiple challenges you face. But the need to find better answers is increasing. It’s “evolve or surrender” time. Unless you’re content with a diminishing customer base and decreasing profitability at an accelerating rate, you’ve got to find ways to get smarter, and fast.

That’s why I’m so excited about the Breakthrough Groups we’ve been moderating. They bring together eight to ten non-competing companies that meet periodically with a facilitator. They give each company the opportunity to learn from the experiences of each other, from their moderators, and from all of our groups combined.

I decided to launch these Groups because I knew that collectively, there were more solutions to more issues than I could give to our clients as a consultant. Some of the groups feature some very large players (one group averages 20,000 customers per company). Other groups are made up of smaller dealers. The trick is to bring together companies that have similar resources, size, and interests, so the lessons are more transferable. It’s also been important to create an environment that allows dealers to be honest about the issues they are facing. The groups allow dealers to drop all of the posturing that sometimes happens at industry functions when competitors are present and get real.

So far, the results have been exceptional. Because we benchmark operating metrics in an “apples to apples” way, for the first time, these companies can really see how they stack up, where they can improve, and what they should preserve. And there is usually someone who has valuable experience in an area that is important to someone else. It allows the members to leapfrog their learning curve, avoid big gaffes, and more quickly adopt better approaches. We’ve even brought together the sales and service managers for their own meetings, to expose them to the kind of opportunities that owner/gm’s are hearing about and want to pursue.

I wanted to share a few of the many things that came out of our most recent Breakthrough Group meetings last month – some things that are worth thinking about and some things that could be potentially big game-changers for you.

Lessons Learned:

Keep your eye on the ULSD contract

As most of you know, the heating oil contract ends in April 2013, replaced by ULSD. In fact, in NY City, and areas primarily served by Columbia pipeline, my understanding is that it will happen this summer. What is unclear is what the price differential will be between heating oil and ULSD. So if you have price cap programs, how do you come up with your cap price? What if your cost turns out to be 15 cents higher than it looks for heating oil, as some have predicted? You need to think through what you can and should offer, and how to roll out to customer base.

The Great Sales Debate – “Outies” vs. “Innies”

In several of our groups, we’ve had a raging debate between the “innies” and the “outies.” The “outies” used outside sales reps, who were supposed to chase down movers, hand out their flyers in neighborhoods, do a walk-through for new customers, network at chamber meetings, field sales leads on their cell phones, etc.

The “innies” used sales people who were mostly strapped to their desk, handling incoming calls, making outbound calls during slow times, handling retention calls, etc. Some companies used real inside sales people, others used general CSR’s who were also tasked with selling (that’s a whole other story.)

Over the past few years, group members tracked the relative effectiveness of each approach, based on cost per closed lead and other metrics. In every case where companies switched from “outies” to “innies”, their sales numbers increased and their costs went down, often dramatically. Members were able to use each other’s experience to make changes – in the hiring model, job description, management approach, targeted activities, etc – much quicker, with much more confidence, and with better practices than if they were wrestling with this on their own, or with a single consultant.

Best Practices for Implementing Flat Rate Pricing

If you don’t bill your service on a flat rate basis by now, as Gomer says, “Shame, shame, shame.” (Yes, I really am showing my age.) It is one of the most essential tools for adding profitability to your HVAC department at a time when you can’t rely on your oil margin alone. And it can really appeal to customers to boot.

But implementing flat rate to its fullest potential is not so simple, at least as we’ve found out in our group meetings. We discussed different aspects, from getting techs to buy in, to making sure they were using it correctly, to resolving service disputes and communicating its virtues to customers.

One big eye opener was simply looking at the labor rates companies were building in to their flat rate models. In one meeting, seven of the nine companies had switched to flat rate. But their labor components varied from $129/hr to $250/hr, and not because of the economic conditions in their particular markets. In fact, the company charging the most was in one of the most depressed places.

What ensued was a vibrant discussion about what was possible, necessary and fair. It definitely changed minds. Though no one else was jumping up to $250/hr right away, several companies were planning to raise rates immediately. There is something powerful about testing your “sacred cow” beliefs with other companies you trust, who are in similar situations and who are not trying to show you up, but only to help.

Discount Oil – If you can’t beat ‘em…join ‘em?

As more homeowners opt for discount oil, the question has started to move from whether or not full service companies should do it, to how to do it best. The range of approaches was broad. Most ran COD operations as completely separate entities. One intrepid company was experimenting with offering it as a “good, better, best” option under their regular brand. We were able to dig into the relative costs and benefits of different approaches, discuss what marketing angles were working best, and also target margins and price elasticity of these buyers. One company shared that the smartest thing they did was use email alerts to spur orders when they were going into an area. Another explained three different ways it had reduced overhead, including making it virtually impossible to get a live person, and the impact of each.

Stop giving away 4 cents per gallon.

We invited Tracy and Larry Richmond of Avatas Payment Solutions (formerly CoCard) as guests for part of a Breakthrough Group meeting, and they let members in on an impressive analysis of the relative impact of different payment methodologies to companies’ bottom lines. They had done pretty comprehensive case studies that took into account the true costs of accepting paper checks, various credit cards, etc. It was an eye-opening experience to see the data laid out.

Here are some points worth noting:

• At $4 a gallon retail cost, each 1% of cost takes 4 cents per gallon out of your pocket.
• It costs companies 0.57% to process payment using MasterCard.
• It costs companies approximately 1.64% to process payment using Visa (Visa doesn’t offer oil companies the utility rate.)
• Paper checks cost companies 1.56% to process. That’s right. When you calculate in all the ancillary costs of handling paper checks (including delay in receiving payment, collection cost, postage etc.) the cost is significant.

Of course, this is counter-intuitive. For years, we were trained to see credit card payment as a necessary evil. But now, with MasterCard rates, anyway, it can actually be an advantage that saves money, especially if it’s an automatic payment.

During this meeting, the Breakthrough Group members started sharing ideas about what can/should be done to steer more people toward MasterCard and auto pay, and away from Visa, Amex and Discover. We also dug into getting EFT and AFT enrollments, which trump all. One member now makes his early pay discount contingent on auto pay by credit card or AFT. Others send email, with links to credit card enrollment page on their web site. Still others had the option pop up prominently whenever customers went to their home page. But the most basic, and probably most important solution was to train customer service reps to ask customers if they’d like to be set up on auto pay right at the outset. Rather than saying, “We take Visa or MasterCard”, your CSR’s could say ”We’re happy to set you up on auto pay with MasterCard, and we’ll even give you X cents off to start.” And while this may not be a major game-changer for you, 4 cents on your margin is nothing to sneeze at, especially when you get your money right away with auto pay instead of waiting 30 days or sometimes, much longer.

Of course, there’s so much more than can be covered in a single article. From time to time, I’ll try to share some more ideas. These are challenging times, and it doesn’t look like they’ll get easier any time soon. But that shouldn’t stop you from strengthening your company. With the right focus, you can find ways to expand your range of possibilities, learn from other successes and failures, and accelerate your evolution, whether it’s by joining something like our Breakthrough Group or through other means.

The current energy landscape is going to create winners and losers. Be one of the winners.

A: No, but that’s the good news! As a business owner, you know that it is impossible to satisfy all of the people all of the time. You also know that people are generally louder when they have something negative to say rather than when they are generally satisfied.

So what do you do about those inevitable bad reviews? Here are some steps to follow:

1. Have a strategy: Never respond to a review unless you can own the issue. The main objective in responding to a negative review is not to make amends with the customer who wrote it, but to assure future customers that the problem was dealt with and that it would never happen to them.
2. Use the right tools: Some websites (such as Google+ and Yahoo Local) will allow you to remove bad reviews if they meet certain criteria, but virtually all will allow you to respond. In most cases, it is better to respond than to remove. It helps you to look credible (nobody is perfect) and caring about each and every customer.
3. Make it personal: Nobody is interested in the business’s side of the story. But a personal response from the owner of the company can be really powerful.
4. Make it right: When crafting your response, follow these steps:
   1. Apologize.
   2. Don’t make excuses.
   3. Don’t blame the customer.
   4. Assure the customer that’s not how you run your business.
   5. Make a personal offer to make it right, i.e., “Please call me directly so I can resolve this for you.”
5. Overwhelm the bad reviews with good ones! Three negative reviews out of 30 are far better than three negative reviews period.

If you treat negative reviews as an opportunity to tell your story, show you care, and humanize your company, that’s making lemonade.

Have an online marketing question that’s been tripping you up? Send me your questions at bgutkin@warmthoughts.com.

The Online Marketing Corner is a monthly column written by Ben Gutkin, vice president of marketing services for Warm Thoughts Communications. In each issue, Ben will share insights, tips, strategies and helpful hints for energy companies to improve their online marketing campaigns. If you have a specific question that you’d like Ben to answer, email him at bgutkin@warmthoughts.com

On Oct. 30, Gap urged people—within a single tweet—”to stay safe during the Hurricane Sandy and maybe also, you know, do a little shopping at Gap.com.” The retailer followed up with an apology for the insensitivity and inappropriate comment of their Social Media Community Manager.