Written on: January 1, 2018 by Phillip J. Baratz
I will admit that I sometimes smirk when recalling my youth, given how silly people sounded when they said things like “information is power” and “information will be the greatest currency.” It’s not often that people are so accurate when making bold, down-the-road predictions. This time though, “they” really got it right. Data and information do rule the world. This is not meant to say that nothing else matters. Everything we know and love—process, staffing, sales, marketing, finance, customer engagement/service, etc.—all of it matters. However, these elements are all being enhanced by fresh, readily available information and should not be ignored.
Whether you are using the information from The National Oceanic & Atmospheric Administration (NOAA) to plan deliveries for next week or you’re tracking service call-backs on a notebook pad, chances are you’ve become used to getting and using information to make better (“more informed”) decisions on a regular basis.
It would be patently unfair to paint our entire industry with one brush, but we can accurately say there have been several impediments to change. The first stems from the simple notion (especially in smaller companies) that, “if it ain’t broke, don’t fix it.” That statement doesn’t imply a lack of better approaches, but does defer to waiting for disaster before change.
The next issue in our industry, which is a wonderful thing in many ways, is that without a retirement age or any planned transitions, senior management is often earned after a good number of years. Or, better put, those who did things a certain way in the 1970s and 80s are still doing it (or managing it) according to the same methods. There are more challenges in the move to embrace technology, efficiency and optimization, but most fall into one (or both) of the categories previously mentioned.
Since we all know that information is an advantage, why the hesitation? Part of it is explained in the prior paragraph, and part simply relates to the fear of the unknown. We often prefer when others are the first to try on-board computers, remote tank monitors, price caps, new Customer Relationship Management systems (CRMs), cross-marketing other products and services, etc. There’s always time to wait, watch and catch up—without the financial risk associated with those items that don’t work out.
That time—the time when you can wait around to see what others are doing and then quickly catch up—is ebbing away. It isn’t that you can’t get up to speed quickly with new ideas such as diversifying into propane or offering your customers an app to communicate with you. With the ever-increasing speed of data-access and technological advances, however, those “first movers” not only have a head start but greater leads as well.
Some companies pride themselves on having excellent service departments. With improvements in equipment however, that “differentiator” is not as big as it once was. Furthermore, what company doesn’t say that they provide excellent service? Taking it a step further, you could have a service tech for every 300 customers (about twice the industry average), and could potentially provide excellent service with that approach. How would you pay for (and staff) all of those positions, though?
You could, hypothetically, make sure that none of your customers ever ran out of heating oil. That might require more trucks, more drivers and more 80 gallon deliveries into 275 gallon tanks. You wouldn’t run customers out, but how would you pay for the extra deliveries and still make a profit?
Of course, you could sell all of your oil at only 35-cents per gallon above the rack price, include a free service contract and pay $500 for a referral. You would be quite popular…except with your family/shareholders/partners and banks.
There is hardly an aspect of your business that cannot achieve notable increases in efficiency and optimization. You can market and sell better. You can service equipment better. You can deliver better. You can hedge and price better. You can engage your customers—the way they want to be engaged—better. Each of these things is easier to accomplish in 2018 than any time before.
Therefore, the next time you say, “Yeah, that might be a good idea, but I am busy with (fill in the blank),” ask yourself just one question: Is what you are busy with right now more important to the short-term and long-term profitability than embracing the advantage of readily available data and technology?
In all likelihood, the technology that you’re using was state-of-the-art when you purchased it. Your data collection systems (notepads, index cards, Word documents, Excel spreadsheets, databases, CRMs, back-office systems were all adequate at one time. However, there is a good chance that your IT department (or for smaller companies, your “computer guy”) has enough on their plate. Your desire to try some new things can often run into resource constraints with personnel or equipment, for example. That doesn’t mean it should simply end there. Your IT staff can be your best partner, and they can be your biggest roadblock. You need to sit down with them, plan a vision together, and map out how to get “from here to there” before you fall too far behind. ICM