Philip J. Baratz Angus Energy pbaratz@angusenergy.com /company/angus-energy /AngusEnergy @AngusEnergy Oilheat Marketing... Technology—savvy or scared? Just because you can, doesn’t mean you should. – Tech Savvy mantra Just because you should, doesn’t mean you will. – Tech Scared mantra With the world of technology rapidly changing, and often bypassing us at lightning speed, it is difficult to understand all the costs and benefits of the various offerings that we are bombarded with. In the old days, you could wait a few months or even years before realizing you needed a fax machine or that you should replace typewriters with desktop computers. However, what about voice over internet protocol (VoIP)? What about virtual networks? It seems that every time you finally make a decision, another set of decisions is right around the corner. That reality—one that is not going away—often drives people to buy the latest new shiny toys (how many of your friends now own their 6th “latest” iPhone?). It can also drive people to bury their heads in the sand and wait until there is an absolute necessity to adopt something new (online banking, email). Globally, businesses are fixated on efficiency. This serves to make people more efficient in their jobs or reduce the number of people needed for a job. The Ford Model-T assembly line did this over 100 years ago, and computers, sensors and analytics are doing it today. The question is not whether you need to get involved, but when? There are numerous skills required to operate a successful heating oil sales, delivery and service company. The typical goal is (and should be) to provide competitively priced products and services that enable steady growth, minimize attrition and proper diversification, returning a reasonable profit. This must all be accomplished in an environment with empowered consumers who have the power to shop, at the click of a mouse. Pairing the ability to remain competitive in the marketplace along with achieving predicted profits is today’s biggest challenge, and requires proper use of technology. Accomplishing those goals requires focus and devotion, but can be achieved with the right people, products, data and technology. Planning, vision and solid management is essential. Department participation—billing, customer service representatives, service technicians, drivers, dispatchers, human resources, information technology, etc.—is needed to implement the vision of the ownership/ senior management team. Then there is the use of technology. The old days of driver-routing, reminder postcards and hoping for word-of-mouth from current customers is now being replaced with auto-routing, email and push notifications and online posting of your company’s ratings. Tank monitors allow for more efficient deliveries. Online portals allow for pricing program renewals. Using data to segment your customers into groups allows you to know which customers are more likely to leave than others. Our industry is fortunate in that we do not have to be at the cutting edge of marketbased technology. Starbucks, for example, already figured out what it needs to show on its app to get people to buy more coffee, Uber figured out how to move their rates to factor in peak demand and Waze can tell everybody what the best route to travel is. Billions of dollars have already been spent outside our industry on “game-changing technology.” Frequently, those game changers failed to achieve their goals—even when, sometimes, they succeeded. If you can utilize technology to deliver more efficiently, hire and train those who are the right fit, understand how to best communicate with customers and recognize trends in customer behavior—shouldn’t you? Forty years ago, when a company delayed moving from their manila file folders to one of the “new-fangled” backoffice systems, the result was that their competitors had an advantage over the delaying company. However, that advantage was offset by the steep learning curve of the new systems. As learning curves flatten out and costs of new technology fall, the advantages are achieved much more quickly, leaving those who delay in the rearview mirror. Now, at the beginning of 2017, there is less and less about our industry that should remain unknown. We should know how many gallons are in a tank, we should know which service technicians have the most call-backs, we should know budget variances—daily, not two weeks after the month is over. We should also know what type of customer yields the most profits for us, and which type of customer communications do not yield an acceptable return on investment (ROI). The suggestion here is not to move your fleet of trucks to electric vehicles because Elon Musk, CEO of Tesla Motors, is promising charging stations at every street corner (he is not, it is just meant for illustration). However, if competition requires you to price your products and services in a manner that is beyond your control, the only way to maximize your profitability comes back to efficiency of personnel and technology. You don’t have to be so savvy that you are leading the technology revolution in our industry, but remaining scared of the current technologies can have repercussions that you don’t want or need. It all boils down to these three important steps: have the information that you need, communicate in a manner that keeps customers engaged and use ROI-based efficiency to drive profits. ICM 30 ICM/March/April 2017
ICM March-Apri 2017
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