Written on: April 1, 2013 by Phillip J. Baratz
Over the past few years, as we have spent more and more time with our clients on matters that were not exclusively related to offering fixed and capped price programs, we have learned about various challenges and opportunities that heating oil dealers face on a daily, seasonal and annual basis.
The issues can range from customer retention and working capital needs and analysis, to excessive service calls and delivery efficiencies (i.e. gallons delivered per hour— or whatever your particular metric is). Sometimes, the needs require expert financial analysis, such as in the setting and managing of an annual (realistic) budget. Other times, the issues are in pricing of programs or how aggressive to be in “give aways” to keep customers from going elsewhere. Then, there are times where simply looking at the results and effectiveness of your service staff might assist in strengthening the company.
In just about all cases, we kept coming back to the simple notion of (not my quote), “You can’t manage what you can’t measure.” Since that very obvious realization, we have spent a great deal of time, money and effort to build and expand offerings that allow our clients to simply know what is going on in their world.
If you are a regular reader of this column (yes, I am including my kids, so the number will be higher!), you know that we rarely participate in self-promotion. We feel that it is very important to offer competitive pricing programs, and we certainly feel that ours are as good, or better, than anyone else’s, BUT if enough dealers are offering proper programs, this column has served its purpose. The same is true with required and critically important reporting.
You NEED to have sales and service reporting. You need to know which customers are simply not worth having. You need to know how you are doing versus your budget (yes, even small dealers need written budgets!). You need to know whether you are hitting your margins—by customer class and by program type (fixed, capped, index-plus, variable). Without this information, you are truly hamstrung, and will end up finding that logical fixes that SHOULD have been done in February, didn’t come to light until months after there was time left to make changes.
If you have a platform that provides you with all of this data—though I am not familiar with any that are close to as affordable or comprehensive as what we are releasing—then gain comfort in the knowledge that you are amongst a small percentage of oil dealers who are taking advantage of what your BOS is telling you, comparing it with your accounting system’s outputs, and actually using the data that is there —once presented properly.
If that platform is not part of what you have available, or if you are not using that as a major component to manage your business with certainty, you really need to start looking around. We (self-promotion alert!) think we can help.
With the volatility of prices, the high cost of oil, and the economic uncertainty that reigns, there is no longer any real excuse to not having the data – easily provided, relevant and affordable – at your fingertips.