December 2012

Today’s Heating Oil is Fine with Me


The final question of a recent Bioheat® fuel dealer survey funded by the National Biodiesel Board asked heating oil fuel dealers, “Everything being equal, would you prefer Bioheat fuel as your home heating oil product, or are you satisfied with generic home heating oil high or ultra-low-sulfur? “

  The response most checked off was, “Today’s heating oil is fine with me.” Yes, 50 percent of fuel dealers taking time to participate responded they are comfortable delivering plain old heating oil. The remaining half responded, “I would like to transition to Bioheat fuel,” followed by, “I would sell both regular oil and Bioheat fuel.”

Recently, I attended the National Association of Convenience Stores conference and was intrigued by their keynote speaker, Peter Sheahan. Sheahan is globally recognized as a leading expert in workforce trends and generational change. He stated, “Customers feel a product is cheap at the price, not when they pay the lowest possible price, but when they feel they received great value and a good deal on all measures, including price.”

My take away, how could an Oilheat customer feel good about the price of oil when very little is being done to convey what the value of this product really is? Many dealers believe that ultra-low sulfur heating oil is the logical and only next step for the industry. Truth be told, regardless of the sulfur level in the heating oil you deliver, it remains a carbon based fuel. The lower sulfur story is a better one, but not better than the story waiting to be told when you combine ultra-low sulfur heating oil blended with biodiesel, a/k/a Bioheat® fuel. The truth of the matter: you will never be clean enough or cheap enough unless you start creating a story around the product which you sell. Stop discounting your offering by referencing it as a commodity. The commodity ends when your delivery truck leaves the rack and heads to your customer’s home.

The message to be taken from Sheahan is clear; you need to tell your customers what Bioheat is and what value they will take away as your customer. Many dealers taking this survey said that conventional heating oil is not competitive against other fuels, such as gas, propane or wood pellets (78%), which was no surprise. Responders then went on to say they thought Bioheat fuel was about the same as other fuels, such as gas, propane and wood pellets (72%). Well, if these responses reveal anything, they suggest dealers would have a better chance of succeeding if they presented the Bioheat proposition to their customers simply because of the marketing advantages associated with the renewable component, not the carbon component.

Other highlights of the survey which caught my attention were that 71% of those polled responded they never used the sales and marketing tools made available through the National Biodiesel Board. When asked if they had ever visited www.bioheatonline.com, 73% responded, “No”; however, of the 27% that did visit the site, 97% found the website informative and valuable. The survey also revealed only 23% had applied to become a registered Bioheat fuel dealer, and 84% said their customers never requested the fuel. On the subject of Bioheat and its technical performance, 49% of those polled felt the fuel had noted challenges; they referenced blending issues, gelling, phase separation and general quality concerns. As a long time booster of Bioheat, these observations are frustrating and necessitate reflection to determine the best and most direct way to alleviate those individuals’ fears. More important, will the industry ever join together to declare that they are interested in transitioning to ULSHO with biodiesel?

During the past decade, millions of dollars have been invested by the National Biodiesel Board to help restore oil heat to its former level of prominence within the home heating marketplace. Extensive training for dealers, leaders and their customers have been administered and we still have 50 percent of dealers content with the state of the industry and not eager to advance their companies’ business towards Bioheat. Worse, only a handfull of state Oilheat leaders have stepped in to lead this transition to a cleaner burning fuel.

On a positive note, 72% of those participating did state that Bioheat was available at a terminal from which they lifted their heating oil, so they couldn’t say Bioheat was not available. Close to 50% did think Bioheat was the logical next step to advance the industry. Further, half preferred Bioheat and would sell it—but when? Action creates clarity and at some point, you have to stop thinking, stop planning and just do something, anything to get traction in your business. You can be one of the 50% who said, “Today’s heating oil is fine,” but you know it’s not. You know that fuel quality is compromised; its price to value is not marketable and you are quickly losing your customers’ confidence.

With this, many continue to buy and sell generic heating oil, accepting this as the norm and interestingly, expecting a different outcome. Without taking action, the water cooler chatter which one hears every day will remain the same: “I hope we have a cold winter”, “I hope crude settles lower and I really hope that gas conversions slow down.” These are notable concerns which make for a great wish list, but do absolutely nothing to put you and your organization on the proactive track to success. Your decision to take part in this evolution needs to start today. That’s because the resources the industry has had access to for the past several years to promote Bioheat are now beginning to become limited.
If we are to continue our effort to transition the industry, it will take a collective effort from fuel dealers, equipment manufacturers and industry leaders, all of whom have skin in the game. If this were five years ago, the use of diplomacy to encourage you to begin your transition would be relied upon—unfortunately, it’s not—and time is of the essence.

“If not Bioheat, then what?” If you are interested in becoming part of the 50% wanting to embrace change and would like to access sales and marketing training as well technical support, please feel free to reach out for immediate assistance. In the upcoming weeks, you will be witness to an aggressive consumer television marketing campaign designed to educate your customers about Bioheat. Will you be ready to answer their questions when your phone rings? There are only a few responses to this question: “Yes”, “No” or, “I like things just the way they are.”

For more information, contact Paul Nazzaro,
978-258-8360 x 301 or write [email protected] and please visit www.bioheatonline.com.

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