The transition has been coming for several years, and it is now as stark as ever. There is a line of demarcation that separates the companies that are stuck in the past or are trying to catch up and those that have embraced the future.
We speak with hundreds of fuel oil/propane dealers every month. Shockingly, we still hear the familiar refrains:
- We let the drivers plan their own routes.
- Most of our customers wouldn’t want an app.
- We’ve never had to put a real budget together—we charge as much as we can and it all works out, usually.
- And, our favorite: We take the good with the bad. It all averages out.
While that is indeed the mindset of some dealers, we believe that much of the resistance is simply the fear of change. Doing things the same way for years, decades even, can lead to comfort and complacency. I’d like to believe that there isn’t really opposition to beneficial change in the form of improved decision-making, efficiencies and profits. For some, however, it’s just too damn scary.
With all decisions, especially game-changing decisions that can impact your business for decades, a good deal of confidence is required. If you are not confident in the decisions you make, it is very easy to find problems and simply say: I knew that wouldn’t work. You need to feel confident in the decisions you make and the expected improvements.
Brimming with Confidence
Confidence based on real capabilities (i.e. technology, marketing, etc.) makes it far easier to forge ahead. For many dealers being a “first mover” is a difficult position to be in. Lacking a solid foundation of certainty that it will work, your confidence can be shaken before you even begin. You likely have on-board computers because others had them first, until you gained enough confidence in that “new technology” to implement it.
The Tipping Point of confidence based on capabilities is what we are seeing in several forms and everyone needs to take note:
- Price caps are not going away
- Setting an annual budget is a must
- The ability to track how you are doing versus your budget and to “course correct” as needed is imperative
- Remote monitoring of tank levels has lowered run-outs and increased delivery sizes—this is helping to combat rising operational costs and the dearth of available drivers
- Segmenting and scoring your customers so that you can treat them with an understanding of their value to you (as opposed to all customers being worth the same) allows you to focus more of your attention on your most valuable customers
Whether you are aware of it or not you, you have embraced change, especially in the form of new technology. As with many things in life that seem to just “happen,” the changes might not have been fully planned, but the improvements have worked out.
Since the future is inevitable, I want to share with you Best Practices we’ve witnessed and coached other dealers on as they proceed through the adoption of new technologies, in order to make the transition more predictable:
- Transparency: Don’t attempt organizational change without letting the organization know what you are doing! Sending out a price cap offer to your customers without letting your customer service representatives (CSRs) know they should expect some calls won’t work out too well. Yet, we still see companies make marketing offers without looping in the whole company.
- Communication: Not only should you let people know the “what,” but it is important to let them know “why.” You are not installing tank monitors to make life harder on the service techs who are tasked with installing them. You are installing monitors to make your entire company more efficient and profitable—which benefits all If you don’t communicate why you are doing something, there will be little incentive to embrace the new idea, which will likely lead to resistance.
- Jump In (don’t nibble): Continuing with the tank monitors example: if you get monitors for just a few (or a small percent) of your customers, it will be next to impossible to achieve the financial benefits of efficient deliveries. Small, back-burner, side projects rarely succeed. Well-defined tests are fine (does the monitor measure, does it communicate, etc.), but once determined that monitors “work,” small implementations can be worse than no implementation.
- Set Proper Expectations: Things will go wrong: there will always be an IT issue, a customer communication issue, a manpower issue. Rarely do plans work perfectly. Understand (and expect) that “stuff” happens, have a plan to work through the early stage issues. Every company has a unique set of skills and every vendor offering a new product has an area of expertise. By working together (recommendation: delay the knee-jerk reaction to point fingers), glitches can be fixed and the team functions at a higher level for the long run.
- New technology is not scary; uncertainty is what scares people: We are well past the time when you can look at your business as one of “averages” (average margin, average delivery size, average annual attrition, etc.), and well past the time that you can hide your head in the sand regarding technology and expect that your customers will stay loyal while your competition and the industry is evolving, improving and making more money than you.
Plan, execute, communicate and gain the confidence needed in this not-so-new millennium! ICM