Small and medium (SMB) oil and gas companies have historically resorted to non-traditional marketing and sales strategies. Sales and customer acquisition can end up creating extravagant ways to guarantee customer buy-in that can be very costly and infrequently bring adequate returns for the dollar invested.
Some of the top marketing mistakes made by SMB oil and gas businesses include:
The most frequent marketing mistakes committed by SMB oil and gas businesses are the following:
- Lacking a clear unique selling proposition (USP)
- Ignoring the competition’s marketing strategy
- Not having a dynamic marketing plan
- Ignoring analytics
- Failing to take full advantage of digital marketing
- Not focusing on retaining existing customers
- Lack of market segmentation
- Targeting the wrong market
The tradition of sealing deals with a handshake still has its place in this industry. However, using proven marketing strategies and tactics incorporating new technologies is critical in the climate of change and upheaval that has become common.
As oil and gas prices fluctuate, inflation blows up, rising interest rates increase capital expenses, and regulatory changes brought on by the climate crisis make an unpredictable marketplace even more volatile, many oil and gas SMBs feel forced to turn to non-traditional marketing efforts for a quick fix. Unfortunately, quick fixes that do not capitalise on proven strategies and technologies can make marketing disconnected from the rest of the business and the current operating environment.
This disconnect results in sales efforts suffering from inefficiency. Return on investment (ROI) declines instead of displaying the growth needed to cover rising capital costs. With pressure coming from all sides, fundamental change in every aspect is upon the industry. It will be challenging for players to maintain or improve performance.
Initiating the Transformation
Now is the right time for SMB oil and gas companies to recalibrate their sales and marketing capabilities. Here are three ways to utilise technology, increase efficiency, and get better results.
1. Market Segmentation
Regardless of the focus on upstream, midstream, or downstream industry segments, it will be profitable for businesses to further segment the market based on customer profiles and perceived brand values. There are three types of market segmentation that are particularly valuable:
- Value Segmentation
Divide the market into segments based on transactional value (how much customers in the group are likely to spend). Examine past purchase behaviour to determine the value of previous purchases.
- Firmographic Segmentation
Divide the market into segments based on industry, revenue, location, and number of employees.
- Seasonal Segmentation
Divide the market into segments based on consumer behaviour, seasons, public holidays, and celebrations. For example, consumers buy different products at different times of the year. Summer holidays mean more people travelling, so sales of jet fuel, petrol, and diesel increase. The approach of cold weather sees increases in heating oil purchases while the onset of winter fuels demand for natural gas.
Creating detailed customer profiles for each segment and examining perceived brand and product image will reveal new marketing and sales opportunities. Businesses can build capacity to identify changing market conditions and take full advantage of emerging consumer trends.
A thorough analysis and a detailed marketing plan encompassing all departments will also help organisations properly segment their market and understand their targets, cost, and proposed ROI based on their efforts.
2. Developing the Right Management Control System
The biggest challenge facing oil and gas SMBs today is re-evaluating and recalibrating their entire operation to align with the Environmental, Sustainability, and Governance (ESG) framework now required for all EU companies and by many investors in the U.S. An annual ESG report reflecting well on company activity has become a critical marketing tool.
A robust management control system (MCS) ensures that sales and marketing efforts work together with the rest of the business as it goes through the changes demanded by ESG compliance. The MCS must include all planning, control, and measurement elements. Most importantly, the MCS must also foster collaboration between all relevant departments toward achieving ESG goals.
Sales and marketing data needs to be shared in real time so that product development, production, and finance can respond instantly, leading to increased efficiency and speed to market. Delivery time and quality will also improve.
The tools used to quantify success need to be good at measuring how well companies do no matter what aspect of performance they are tracking. Managers can quickly trace the root causes of any efficiency when they have real-time data at their fingertips 24/7.
3. Technology Transformation
Tech transformation continues to accelerate across all industries worldwide. To survive, oil and gas SMBs must take a sustainable approach to manage the technological change and gain the most significant benefits.
While they can’t replace the trust in a handshake, new technologies can promote awareness and build towards sealing deals in person. The following technologies can streamline and optimize sales and marketing strategies:
- A dynamically evolving website forms the heart of new digital marketing technologies.
- Social media can build a positive brand image in the current green movement.
- Digital advertising can reach targeted market segments and get the news out about new products or changes quickly.
- Video can bring a company presence to life, build a more positive brand image, and spread the brand’s message.
Companies must pair the new technologies with the right skills, processes, and workforce. Value creation must always be front and centre. The strategy foundations must include a clear understanding of the business’s current performance baseline, KPIs, and tools that enable rapid, fact-based decision-making. It will help to break the transformation process into three baskets:
- Transformation Strategy
A solid strategy development framework includes an in-depth analysis of all internal and external factors the technology influences. A robust and all-encompassing strategy ensures that management sets achievable aspirational goals and establishes the necessary initiatives to achieve them.
- Transformation Planning
Experienced planners will be able to present what needs to be done as part of the solution. They’ve planned and executed transformation so often that they’re aware of possible pitfalls and all the numerous factors involved in technological transformation.
- Transformation Management
Technological transformation is an ever-evolving journey. An agile approach to setting up the best governance models to drive effective change brings optimum results. Companies need a transformation management office to manage and monitor the entire process of establishing and sustaining transformation management.
Most important in this aspect is to measure the journey towards the full adoption of the changes. This means that new ways of working are embedded into the organisation and its staff and staff contribute to drive a culture of continuous improvement on their own.
How Renoir Helps Transform Sales for Oil & Gas SMBs
With over 25 years of experience helping businesses achieve optimum performance levels, Renoir is uniquely suited to help oil and gas SMBs in the following ways.
- Develop more effective management systems and business processes to ensure cost effectiveness, reducing production losses and optimising cost.
- Adopt methods and practices to ensure capital projects are delivered on time and within budget.
- Develop a culture of discipline and structure within management systems that ensure health, safety, and security while meeting or exceeding environmental targets.
- Exploit digital technologies to support efficient working practices and business processes.
- Achieve full adoption of the changes within the organisation.
Renoir begins every project with a thorough evaluation to determine root causes, then designs the optimum strategy to bring the highest returns before helping businesses implement it.