Lessons from Our Breakthrough Groups - Warm Thoughts Communications
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Lessons from Our Breakthrough Groups:

Keeping Customers on Auto
by Ed Cardell, Senior Consultant, Warm Thoughts Communications

During my years as a heating fuels company GM, I would start each day with a glance at my business dashboard. (Actually, I would start each day with a cup of coffee and some sort of pastry – and then move to the dashboard). First, I would check the obvious metrics. Where are my gallons compared to the same month, last year? How are my degree days shaking out? Where is my margin per gallon? But after that, I was mostly interested in what was happening to my customer base. Not just the new and cancelled account comparison, but movement inside my base. What are the numbers of customers buying and cancelling heating and AC service agreements? Who is jumping on and off of budget plans, on and off of price protection agreements, and most importantly, who is moving from automatic delivery to Will Call?

In a recent industry survey, almost one third of heating oil consumers admitted to changing suppliers in the last five years. And one in three of those have changed providers more than once. We aren’t even talking about customers who are considering or have moved away from heating oil. How many of these potentially lost customers started with “Change my delivery to Will Call?”

As a moderator of the Warm Thoughts Breakthrough Groups, I was involved in two recent sessions with dealers all across the Northeast about this very issue. Both focused on the same challenge, “Managing and Measuring Churn.” Here are a few of the lessons and findings from those Breakthrough Group meetings.

Stemming the Will Call Tide

We are all seeing an upswing of customers switching from Auto to Will Call. The high price of fuel makes it tough to get a big bill when you aren’t expecting it. The bad economy hasn’t helped, nor has the general gravitation towards price shopping. This shift is obviously not in our best interest for a lot of reasons. So what can you do about it?

Handling the Switch from Auto to Will-Call

Most CSRs aren’t equipped to handle these calls well. Many of these customers are not simply changing delivery method. They are politely saying “adios.” You need to deal with it like it’s a customer quit call, and get the best resource on it.

The way some dealers are starting to handle this is to tell the customer that only “Mary” is authorized to change the status of accounts for liability reasons. “What liability?” “Well, if an account is changed to will-call improperly, then customers may run out of fuel and we’ll be liable, so Mary handles all of them.”

“Mary” needs to be your “Ace” — the best person capable of ferreting out what’s really happening. If the customer wants to switch because the bill is too high, she should be great at suggesting budget instead. If the customer is really looking to leave, either because they are thinking of switching to gas or looking for a lower price, she should be good at ferreting out what’s really happening and, if appropriate, empowered to do some negotiating.

Of course, there will be a few cases where this is over-kill. But many of the companies who dug into this “moment of truth” came away feeling that they were letting far too many people slip through this big crack. And the shift in their approach has been saving accounts.

Keep Customers in the Degree Day Schedule

Just because we move a customer to Will Call doesn’t mean we should only catch their calls. We should throw the ball to them too. One company keeps the good Will Call customers on a degree day schedule, and calls them if they haven’t ordered when the system says a delivery would be due.

Other companies take a broader approach — they use either auto-dial or email to reach larger groups of customers in areas where they’ll be delivering, offering a discount if they get a delivery when the truck is in the area. This generates some business that they’d otherwise miss, restores some delivery efficiencies and is very inexpensive (especially email – all the more reason to get as many email addresses as possible.) You can make it really easy by providing an option for the customer to place an order with a simple click.

An even better approach used by one company included text messaging. “Our records show you might be running low on fuel. Would you like to order now and save an extra five cents per gallon?” Texting is particularly effective for getting more tune-up appointments and also for confirming service calls.

It also seems to be smart to set up a “reason” code for customers who drop. That way, if you want to set up a “We Want You Back,” you can target your efforts. If customers switch to gas, and you service gas, you can target them. If they were bad payers, you can expunge them from your efforts.

Just make sure the information being inputted is legitimate. The old expression, “garbage in, garbage out” really applies. Without proper controls, these codes can be dangerously misleading. One of the companies shared that through our benchmarking, they realized the number of customers listed as having converted to gas was exceptionally high for their area. When they started investigating, they found that filling out the box where the “reason code” was located in their computer records required their CSRs to go to another screen. When things got busy, the CSRs let it slide. Or they felt intimidated about asking the customer “why,” because customers were often reluctant to tell them, and they knew their manager would be upset if they didn’t find out.

So the CSRs started going in at the end of the day and filling in blanks. And it was more permissible in their culture to lose a customer to gas then to another oil company. So to take the heat off, they disproportionately put in “gas conversion.”

The danger is that you want to make decisions based on this information (the same is true about lead sources). This particular company finally found success when they:

See Will Calls as a Work in Progress and Act Accordingly

Companies take diverse approaches to paying commissions or spiffs for bringing on new Will Call accounts (also, everyone agreed they are seeing a much higher proportion of their new customers coming on board that way than ever before.) But it’s not unusual for sales people or CSR’s to get nothing for bringing on a Will Call account. Smart companies stack their incentives to make it easy to choose auto, and train their people to get them down that path, rather than simply offering it as an option.

But one of our very successful members surprised us by saying she had changed her attitude about Will Calls. Now she “loves” them. Why? Because rather than looking at them as “junk bonds” she sees them “as a warm lead. With a little investment, they could be upgraded.”

The trick, she said, is implementing a process that moves the customer up the ladder until they are fully engaged in a service agreement, automated payment program, and an automatic delivery cycle. This is achieved through a series of contacts with the customer; by phone, through the mail and via email. It requires discipline. After each will-call delivery, the company provides an incentive for moving to automatic (discounts, gallons, or credits toward future deliveries). They also push budget plans heavily to those customers who are credit approved to make it easier to deal with the bigger deliveries. And they follow the same pattern with service plans. There are also programs like Destwin that make it easier to get customers up this loyalty ladder automatically, by using customized messages whenever they log in to their payment portal.

Managing the Summer Will Call Request

Many customers don’t like to get deliveries in the summer. But once they go on Will Call, they are free agents. How do you handle it? Don’t just drop them into the black hole of “Will Call.” Several members now tell customers they are suspending automatic delivery for the summer, and will begin again on October 1st. Then they promptly follow up with an email confirming the conversation so there is no doubt. When it’s time to resume deliveries, they also send an email to reduce the possibility of a spill, in case that customer had gone elsewhere anyway. They’ve shared that this approach has become a nice solution for them.

Dealers all across the country are looking for the best solutions to meet these challenges and grow their businesses. Warm Thoughts’ Breakthrough Groups are one example of where they are turning to uncover the most impactful action steps. What I’ve listed above are but a fraction of the findings from these groups. Perhaps there is a concept, idea, or tool here that you can build on or use in your retention program.

And as you work on your retention strategy, remember that a Will Call ticket to a Jimmy Buffett concert is good thing. When a love interest says “I Will Call you tomorrow” after your first date, that’s definitely a good thing. But, “I Will Call you when I am ready for my next delivery” is in another category, and needs to be managed.

Ed Cardell is Senior Marketing Consultant with Warm Thoughts Communications, consulting with and training some of the country’s leading fuel dealers on a variety of sales, marketing and operational issues. Ed is also a moderator of the members-only Breakthrough Groups. Previously, Ed served as general manager of the fuels division of Moyer Indoor Outdoor in Souderton, PA.

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