Oilheat Marketing... A Million Whispers… to pay his or her bills. However, is that all you need? Over the last few months, there has been a lot of talk—some of it in this space—about collecting, distilling, managing, reporting and using data. While the volume of data that you have available might be overwhelming, the non-use of the data may be devastating. I would grant you that the higher the creditscore, By Philip J. Baratz Angus Energy pbaratz@angusenergy.com /company/angus-energy /AngusEnergy @AngusEnergy Here is the situation: A sales rep brings in a New Customer Application, after convincing a homeowner that YOU are the right oil company for them. The credit manager reviews the application for completeness— name, address, contact info, permission to check credit, (likely a very low) fixed price, etc. The credit manager proceeds to “run a credit check,” and from that a determination is made as to whether to dispatch a truck the next day to fill up your new customer’s tank. That process takes place hundreds of thousands of times (possibly over one million) per year, by several thousand companies. In most cases, the “credit check” is all that is required for a customer to be deemed acceptable, and for the company to spend the “customer acquisition money.” The credit check is of value, and likely a good barometer of the customer’s ability and historical willingness the more likely it is for payment to be made. However, does that help you keep a customer for a long period of time? Does it help move that customer onto a budget plan or a service contract? There is a harsh reality for many companies that begins right at the signing of the first customer application. That reality is that the original “status” of most new customers—non-budget, non-service plan, non-pricing plan, etc.— is not sufficient for a customer to become profitable (especially with the “teaser price” that many dealers offer to entice the customer into the fold). The notion of just slowly raising prices year after year, and hoping that the customers won’t notice, is simply Fool’s Gold. You need to move them from their “starting status” to a status that will engender both longevity and profitability. Anything short of that will result in continued, and very expensive, churn. So, back to the data and to the new customer application: It is hard to know too much about a customer’s future behavior before they have shown that behavior. However, the earlier you start to test and prod customers towards the behaviors that you want them to have, the earlier you will know if you will succeed. Too much of our industry’s behavior is based upon the annual renewal date—a.k.a. the yearly roll of the dice. I know that I have been harping on this for a while, instead of focusing my witticisms on how to “best” trade futures and options (spoiler alert: There is no BEST way. There are only several choices, and from those you need to make a business decision), but while there is no one that I know that can either predict prices or cause them to move, there are a million (literally) pieces of information sitting in your BOS, spreadsheets and other repositories, all waiting for you to expose them to the light of day and to use them to your advantage. If you don’t, your competitors will. ICM 30 ICM/May/June 2016
ICM May-June 2016
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