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ICM January-February 2017

Diversification... Transforming How companies diversify and make the pieces fit. by Christen Harm Assistant Editor Today, natural gas and other alternatives are competing with the oil heating industry. However, what predates oil heating? Early in the twentieth century, coal and ice were the source for home heating and cooling. Then, out of necessity, coal companies were forced to transition into oil heating. Now, oil heating businesses are seeing another shift. Many fuel delivery businesses, by necessity, had to reach out to other fields to make their business profitable and retain customers or find a way to reach out to new customers. Typically, companies will diversify into areas that are similar to their parent industry. Propane, natural gas, lawn care, pest control, home security, water and fire remediation—these are just a few areas that companies have ventured into. Indoor Comfort Marketing interviewed three local companies that push the boundaries of diversification to get a closer look at what has driven them to branch out, how they are doing so, what kind of challenges they face and advice they may have for companies that want to do the same. With a whole myriad of reasons, approaches, strategies and values, each company has successfully diversified into multiple businesses to increase its profit margin and become a rounded company, servicing all the needs of its homeowner customers. Moyer Indoor Outdoor Souderton, PA Bob Williamson, General Manager Moyer Indoor Outdoor opened in 1869 as a coal and feed resource in the agricultural community. Six generations later, the business includes heating oil, HVAC, pool servicing, plumbing, lawn care, tree care, pest control and home security under its umbrella. Like so many others, coal transitioned into oil heat, which then expanded into HVAC and plumbing. Moyer was practical about strategizing to expand the company. “Strategically good fits that were close to what we were already doing with an annuity either real or perceived,” emphasized Bob Williamson, was what prompted diversification in the business. Thinking about transitioning, Williamson confides that taking gradual steps close to its core competency was their strategy. Gradual is exactly how they expanded. In the 1930s, over 60 years into the business, they started delivering oil. In the 1970s, they dipped their toes into pool servicing, followed by lawn care. Plumbing, a common diversification of oil heat companies, was added in the 1980s. Moyer was tactical and practical in the additions to their company, allowing each one to develop and grow before jumping into another, which would have had added risks. In 2003, the company added an irrigation business, but sold it after five years. Moyer defines success as a business that can support itself and generate significant contribution each year as if it was a stand-alone company. The acceptance that irrigation was not a fit for Moyer was crucial to the success of the business. Marketing is a key component to making the additional businesses successful. According to Williamson, it is difficult showing consumers that Moyer is more than just an oil company. “It is hard for the consumer to look at us in so many ways,” said Williamson. The company spends a lot of effort consistently branding and having a message for each individual service to remind consumers. “The consumer is so busy and distracted that they could never name everything we do. So when they wake up and they need a plumber, they may have forgotten that their pest control company does plumbing—and that’s always the challenge,” states Williamson. With regards to cross selling, employees are trained on how to generate leads and hand them off. An employee out on a call may say to a customer, I notice you have weeds in your lawn, did you know we have lawn care as well? Would it make sense if our lawn care guys gave you some options? If the home owner says yes, they call a lead in. While Bob Williamson Moyer struggles to get employees to start the conversation, 4 ICM/January/February 2017


ICM January-February 2017
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