Strategies for fuel companies to strengthen sales

By Ed Cardell

I don’t know about you, but doesn’t it feel like the pace of change in our business is only accelerating? I’ve been working with fuel dealers for over 30 years now. We’ve faced big challenges over that time – wars, price spikes, temporary fuel shortages, regulatory attacks – but the sheer pace of change on multiple fronts seems to be increasing. Changing consumer buying behaviors. New mobile and digital technology. Bio and Ultra Low Sulphur fuel. Shrinking gallons. Shrinking pool of good drivers and techs. Insurance companies dictating changes. Banks dictating changes. Government dictating changes. Oil hedges. Weather hedges. Benson and Hedges. You get the picture. You get it because you live it.

Several years ago, a couple of great Connecticut guys, Craig Snyder and Sam Gault, asked me to help them and Jim Townsend put together a small group of non-competing fuel companies that could benchmark with each other, share good ideas and learn from each other’s mistakes.

From that acorn, Warm Thoughts Breakthrough Groups™ have grown. We now have over 60 participants from 12 states, meeting in six groups, with the largest contingent coming from Connecticut. We expect two more groups will form this year.

The groups meet two or three times per year, made up of non-competing, similar-sized companies. They spend a couple of days serious idea sharing punctuated by some good laughs and fun, animated with a spirit of helpfulness and a disdain for BS. While individual discussions are confidential, I’m happy to give some insight into the broad themes that we cover.

The new heating oil, 15ppm plus Bio, is a game changer.
In states already at 15ppm, members are reporting a significant drop in service calls per degree day, including night calls. Will you still need to do your tune-up annually, or could you get customers to agree to do it at every 1,000 gallons? Will you be able to reduce your tech-to-customer ratio, or should you use that reduced workload to allow techs to spend more time in the home generating a larger number of leads? Should you reconsider how you price service plans, or what your plans cover? And in any case, if you are mixing Bio and Ultra Low, you’d better look closely at your additive package.
Sales weakness is one of our industry’s deadly sins.
Effective salesmanship seems to be as rare in our industry as under-regulation is in the state of Connecticut. Members seem to be enamored by lots of the new marketing technology – CRM systems, digital/social/mobile, etc., which are definitely cool. But what they’re tracking is that their salesmanship bites. If you are a full-service dealer, you need to pay more attention to how your phone is answered, what they say, how they say it, and what happens after they hang up the phone.
In particular, it is worth monitoring the percentage of new customers who enroll loaded with budget/service plan/autopay. These make a big difference in how many will still be with you three or four years later. Likewise, it’s hard to expect a typical CSR to effectively sell new accounts in a very competitive market. There’s also been a big debate about the virtue of outies vs. innies (outside sales people vs. inside.) The innie faction seems to have won this battle, though shifting this way exposes a vulnerability to property transfer losses. And no matter what, it pays to reexamine how you are paying those you hope will grow your company.
There is a shift happening in our workforce that could be an opportunity or challenge.
Many of you have employees who have been with you for years. That’s good. Except when it isn’t. For those of you who are trying to evolve and grow, it’s hard when you’re dealing with people who are perfectly comfortable doing things the way they’ve always done them. If you recruit new blood, you have the opportunity to add energy and new thinking. At the same time, the younger workforce marches to the tune of a different drum. Also, some positions are once again difficult to fill – especially drivers and techs. There has been a lot of talk about initiating apprenticeship programs, building relationships with training schools, using ad campaigns to recruit seasonal drivers, etc.
Diversification is a great concept, a smart move, and a tricky thing.
Many of our members are confronting the reality of shrinking gallons by finding other things to sell their loyal customer base – propane, broader HVAC services, insurance, alarms, energy efficiency, you name it. But while they may have the skills and the customers, it’s not so simple. Often, the new baby faces opposition from the kids already there, especially if you divert resources to fund the new venture. Don’t expect all employees to be as excited as you are about your new business lines – they can feel threatened and simply don’t want to learn new tricks. Moreover, some businesses, like HVAC, really require more attention to labor utilization, cost estimating, aggressive selling, etc. than many fuel companies are used to doing.
We tend to misunderstand how much our CSR’s can handle – the new complexity especially falls on them. And don’t expect customers to simply flock to you. There will be low hanging fruit, but you have a brand and promotional challenge. While customers may think you are an awesome fuel company, that doesn’t mean you’re a great choice for the new stuff. You need to tell a new story, and do more promotion than you expect. Taking time to really anticipate the challenges, and figure out a strategy to engage your people behind the vision, get them trained and excited, really matters. Your culture could be your greatest asset, or worst liability.
What other interesting things have people done?
What haven’t they? Built in-house “universities” to strengthen training and culture; rebranded their companies and changed their names; started using tank monitors to improve delivery efficiency; started using business intelligence software to track key metrics and react more quickly; surveyed their employees and used it as a basis for changing management approach; got into energy efficiency; got out of energy efficiency; bought companies; did joint ventures; invested more heavily in digital marketing; shifted service contracts to service plans; gone on flat rate; instituted delivery fees; restructured their companies; changed sales compensation; changed insurance companies; changed banks. Changed them again.

The reality is that in our challenging industry, whether by necessity or by virtue of great vision, companies are taking innovative steps to navigate the choppier waters. By learning from each other – the good, the bad and the ugly – you can accelerate your learning curve, gain valuable allies, avoid costly mistakes, and increase the chances that your boat will find safe harbors.

For more information about Warm Thoughts Breakthrough Groups™, you can contact Ed Cardell at 201-906-1103, or email him at ecardell@warmthoughts.com.