Your Business’s Future May Depend on Changes You Make Today
By the time this reaches you, we will have entered the heating season’s home stretch. After a year of fuel shortages, rollercoaster prices, customer disillusionment, industry upheavals and legislative attacks, 2023 has finally settled in and spring is around the corner.
The good news is that you’ve successfully managed another season. The bad news is that, like everyone else in the industry, you probably took some hits this winter: customer loss, encroaching competitors, employee defections and more. The question you need to consider now is, what will you do differently over the next 12 months?
Facing the Electrification Challenge
We’ll start with the great, big, electrified elephant in the room. Just about every state has instituted some sort of clean energy plan promoting electrification (see article on page 32) in a misguided attempt to lower carbon emissions. Many of these plans include some acknowledgement of Bioheat® fuel as a lower-carbon (soon to reach net-zero carbon) clean energy. What are you going to do differently to face the challenge?
• Embrace renewable fuels. Bioheat® fuel, renewable diesel and renewable propane are already making a difference by reducing carbon emissions. Are you? If Bioheat® fuel is mandated in your area, are you actively promoting its environmental and economic benefits to your customers? Where there are no mandates, have you taken the lead to offer these cleaner liquid fuels to your customers? We have an answer to the “electrify everything” movement, but only if wholesalers and retailers make the choice to increase the use of renewable fuels. The customer will purchase what you deliver, especially a drop-in fuel that costs the same as non-renewables.
• Make your voice heard. You know the truth. Electrification is a costly risk for the consumer and the community. Amplify the messages from the associations working on your behalf: share their materials with your customers and the public by posting them to your website and social media. Support the organizations and their PACs. Join them on trips to your state capital or D.C. Send in comments against unfair legislation.
• Promote upgrades, NOW. Bioheat® fuel and propane equipment qualify for tax credits under the Inflation Reduction Act. Financing, rebates, and other incentives can make an upgrade more affordable, and HEAP funds may be available for those who qualify. It is important to upgrade systems sooner rather than later, as many “clean energy” plans will ban equipment upgrades and major repairs after 2030, if not sooner. Most equipment upgrades will increase efficiency between 18% and 20%, and the systems will require liquid fuels for decades.
• Diversify. When the fossil gas companies pushed for oil-to-gas conversions, many liquid fuel dealers survived because they could install and repair the new equipment. Most fuel retailers are already offering heat pumps for air conditioning. Review NORA’s presentation on best practices for combined Bioheat® fuel and electric heating systems (summarized in “High-Efficiency Oilheat Equipment vs. Electric Heat Pumps,” Oil & Energy, November-December 2021), and determine if hybrid systems would work for your clientele. Offer your customers the option to go further, with solar and B100, for a net-zero carbon heating system. (Read up on NORA’s Net-Zero Carbon Home in the September 2022 issue.)
Where Have All the Customers Gone?
With apologies to the great Pete Seeger, the customers have gone “long time ago.” New construction is not built to spec for liquid fuels, and the oil-to-gas and now oil-to-electric movements have eaten into our customer base, making the pool of potential customers much smaller than a decade ago. You may have picked up new customers this year, but did they balance the customers who left? What are you going to do differently to expand your customer base?
• Expand or saturate your service area. Is it worth it to go further afield? What will it cost you in terms of your fleet, fuel and additional employees? Would it be more cost-effective to target sparse pockets within or adjacent to your service area? Increasing your marketing directly to those locations through targeted print, digital, direct mail, out-of-home and spot-TV or radio placements might be the answer. Marketing options now allow you to choose your audience with near-pinpoint accuracy.
• Become more accessible. Your customers and potential customers are handling virtually all their transactions via smartphone. Make this the year that you update your website and your online services. If you are not yet offering online account management, payments, ordering, service requests, contract enrollments or virtual service calls, you are lagging behind your competitors. Your online accessibility must also include an active social media profile, with regular posts and timely responses to messages. Given a choice, customers in every age group now prefer to communicate via Facebook, online messaging applications or text. If you are not offering these options, they will find a company that does.
• Merge with or acquire other companies. Partnership or purchase? Sometimes growing a business means joining with another company. If you are going that route, work with an advisor that has the expertise to protect your business interests, customers and heirs. Don’t forget to develop a transition marketing plan as well, so account holders feel welcomed by and comfortable with the new entity.
The Great Employee Search
It often feels like anyone willing to work is unqualified, and anyone qualified wants the sun and the moon to walk through the door. The “Great Resignation” or “Great Reshuffling” of the post-Covid years came as essential workers realized exactly how essential they were, and everyone else realized that most of their work didn’t require commuting to an office. I took an in-depth look at this challenge in “Marketing to a New Audience: Potential Employees” in the November-December 2021 issue. More than a year later, the problem hasn’t gone away. Many companies are on a year-round search for drivers, technicians, installers, mechanics, office staff and more. What are you going to do differently to find new employees?
• Expand your outreach. Technical schools and training programs are great resources, but those prospects may not have the experience you need. Job boards might reach experienced applicants but will just as likely show your listing to anyone with a pulse, inundating you with unqualified applicants submitting unreadable applications. Programmatic advertising lets you target individuals within commuting distance who are looking for work and/or have the skills you need.
• Change your definition of “perfect.” The right person may not have the exact skills you are looking for, but the right combination of enthusiasm, interest and abilities. Are you willing to train a new employee coming from a different career or the military? Pay for or offset any testing or licensing fees? It could be time to throw away a 20-year-old checklist and look at the people knocking at your door.
• Show them the money. Some new hires may expect a higher salary than you originally planned, or even a signing bonus. Others may need you to be flexible on your “standard” schedules, benefits or PTO policies. What enticed employees even five years ago may not be enough today. If you are having difficulty hiring, you may want to review your packages and discuss new options with your benefits partners and financial advisors.
This is a good time to take stock of what worked and, more importantly, what didn’t work this year. Then ask yourself, what will you do differently next year, and take the steps needed to make the change, and your future success, a reality.
Richard Rutigliano is President of PriMedia, Inc., an integrated and communications firm specializing in the home energy sector. He can be reached at 516-222-2041 or rrutigliano@primediany.com.
