An Oil Heat Marketing Nitemare
Pulling the covers over your head won’t make the monsters go away
No doubt about it, this winter was tough on full service heating oil suppliers—and not because they couldn’t get oil! This heating season, falling oil prices and warmer than average temperatures for most of the winter joined forces and whacked the full service oil heating industry right in the gut.
When bad things happen to good businesses, it’s normal to want to pull the covers over your head and hope the monsters will go away—but it’s more important to stay in touch with your customers when things are tough than when everything’s coming up roses.
Unfortunately, many oil heating suppliers are staying in touch by suing customers who signed contracts last summer to purchase their heating oil at prices they believed would be lower than those that winter would bring.
Homeowners look for ways out of contracts.
Consumers who bought their year’s supply at a locked in price are now finding that the oil for which they agreed to pay $2.80 per gallon is available from cash on delivery dealers for $1.80 a gallon. Feeling screwed, many contracted customers are ignoring the contacts they signed to buy a specified number of gallons in favor of saving $1 per gallon with COD dealers.
The resulting squeeze has made the price of oil a critical issue. In order to retain their customers, some full service suppliers have chosen to lower prices on oil they bought when the market rate was substantially higher. Other full service firms have chosen to try enforcing the contracts their customers signed in court. Either way, full service suppliers are taking it on the chin.
How to turn a challenge into an opportunity
Remember, every new challenge brings a new opportunity. Numerous marketing and industry-specific studies show that retaining customers is simultaneously more profitable and a lot less stressful than hustling for new customers.
So how are you going to keep your customers as the season winds down? Keeping your customer list, your bottom line and your cool isn’t easy, but it can be done.
The first thing to do is realize that most customers don’t realize that you bought their oil last summer. Taking them to court may get you some money—but it costs you money too, and virtually guarantees these customers never buy from you again.
Secondly, you need to show you appreciate your customers by continuing to add value. Find ways to provide additional value to your customers and make sure that they understand the value of everything you provide.
Here are some ways to beef up your worth in customers’ eyes:
Offer unexpected bonuses that don’t cost you much but make a big impact. Find ways to market reciprocally with other local businesses offering services your customers would like. Play your cards right and you’ll come out looking like a hero without paying a penny.
For example, everyone’s carpet needs cleaning in the spring. Ask a local carpet cleaning company to let you provide your customers with coupons for reduced price or free carpet cleaning.
Cross market. Check with your local Chamber of Commerce and your banker about businesses that might be willing to cross market with you.
Ask local carwashes to let you offer customers a coupon for a free wash. If your local washes are among the 46 percent of car washes nationwide now run by gas stations and convenience stores, ask what other coupons they might be willing to let you provide.
Differentiate the oil you deliver with a guaranteed additive.
Good additives offer some terrific benefits your customers may not realize. Offering a top flight, guaranteed additive and explaining its many benefits will put you head and shoulders above your COD competition.
Make your customers aware that good additives reduce the amount of crud and corrosion in their storage tanks, allow furnaces to run hotter and more efficiently and significantly lessen the chances for heating systems to go down when they are most needed. The fact that many consumers have already begun questioning the quality of oil COD dealers sell should make this easy.
Choosing an additive that can be branded as your own private blend makes it tough for others to compete against you. (If you’d like to receive a list of tips on choosing the companies that provide the highest-performing additives and best marketing support, send an email to john@homeheatingoilprices.com.
Fulfill your customers’ emotional needs.
Emotional attachment is the biggest contributor to consumer loyalty and heating is a highly emotional issue. Testing on HeatingOilHelp.com (over 50K heating oil consumers surveyed) showed fear of getting ripped off was a more important purchase driver than price.
There are other serious fears around heating. Somewhere in the back of customers’ mind lurk worries about a furnace that quits and a storm that keeps them housebound for days and they run out of heating oil.
Full service heating oil dealers need to capitalize on the emotional security they provide. For example, a driver for one company with a customer whose driveway was too icy for the delivery truck to navigate carried the oil to the house one five-gallon bucket at a time to be sure that the customer had heat. The company asked for and received a number of referrals and a glowing testimonial. Educate customers: Use every opportunity that arises to describe to your customers the many advantages that full service heating oil dealers offer.
Full service dealers provide many serious benefits that COD dealers don’t. Point out the importance of tank inspections and additives. Emphasize your technical skills and your ability to respond quickly when problems occur, the value of insurances, guarantees and other benefits of your products and services.
Once customers truly understand the value you provide they will understand that you are well worth the money they pay.
Tactics for staying in touch with customers:
Print newsletters: Research shows that the current print newsletter format is expensive and doesn’t work as well as it used to for the same reason that print newspaper sales are down: Everyone’s getting information on the Internet these days.
In addition, most oil dealers see current print newsletter designs as offering bland, rehashed information that fails to capture attention. Most customers throw these newsletters in the trash, which doesn’t do the dealer any good at all.
If you really want to send a print newsletter, use a flat 8.5 X 11 paper stock
approved by the U.S.P.S. Studies show these are more easily and more often read than the traditional format of 11 X 14 folded down to a 8.5 X 3.6.
Email
If you don’t already have customers’ email addresses on file, start getting them! Email marketing programs are effective and cheap. You can send emails to remind your customers that heating oil season is just around the corner and you want to check out their oil heating systems to be sure everything will be A-okay when Old Man Winter arrives. Include a link customers can click to set an appointment with you.
Don’t limit emails to service issues. Send emails formatted as greeting cards that wish your customers warm and happy holidays. Include a printable coupon whenever possible.
Live phone calls
The old advertising slogan about “reaching out and touching someone” still rings true. If you have the time and staff to make live, in-person sales and post delivery follow up calls, by all means make them.
Voice mail messages
For very little expense, you can set up a calling system that automatically notifies customers when a heating oil delivery has been made.
Political candidates have been doing using these for years. While not quite as compelling as live calls, automated voice mail messages do let customers know you care and you’re there for them.
Make the message both personal and personable, perhaps something like “I just wanted you to know you don’t have to worry about having enough heating oil because we filled your storage tank today. If you have any heating concerns at all, please feel free to call us 24/7 at (555) 555-5555.”
Postcard marketing
Compared to other forms of print advertising, postcards are cheap—and unlike newsletters, and almost everyone reads them. Using a colorful paper stock boosts recipients’ attention. Adding a coupon or other bonus gift to your message boosts consumer action.
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John Bogdanski is the leading authority on consumer relationship marketing for Oil Heating, HVAC and Propane services. He is President of www.oilheatmarketing.com. A 20-year veteran in the marketing industry, John writes on both consumer and industry Oil Heating, HVAC an Propane topics. He is always happy to answer readers’ questions and can be reached at (800) 734-0976 or john@ oilheatmarketing.com.
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