Savvy dealers can differentiate their operations by offering a premium fuel program
Duane McLevedge of Global Companies LLC checks out a truck-mounted injection system for Global’s Heating Oil Plus heating-fuel additive.
By Duane McLevedge
Most fuel oil dealers have an understanding of the benefits of incorporating a premium additive to their heating oil. More efficient burner performance, reduced sludge and sediment, fewer service calls, extended system life ‘ and happier customers.
But those are just some of the internal benefits of a premium fuel program. Many dealers have also discovered that offering a premium fuel blend also offers some powerful external benefits. Primary among these advantages is the ability to make your company stand out from the crowded field of oil retailers.
There is a basic marketing concept known as ‘differentiation.” Briefly, for a product, service or business to succeed, it must be able to offer customers something they cannot get anywhere else. It may be something tangible such as better performance, lower pricing or a unique design. Or it could be an intangible difference, such as convenience, peace of mind or perceived superiority.
Differentiation is at the core of a company’s brand awareness. For example, what kind of sneakers do you wear at the gym or around the yard? Almost any brand of sneaker will perform the basic tasks well and most are made of similar materials. But many of us prefer to wear Nikes (or Reeboks or Adidas, etc.). Why? Because the shoe companies have been able to demonstrate a difference between brands that gives each its own identity. And that identity brings about loyalty among customers.
A premium fuel program can accomplish a similar feat for your oilheat company. If your customers believe that ‘all oil is the same” they will make a buying decision based on the most visible factor they can see that differentiates one dealer from the next: price. That is a battle that no dealer can win, as there will always be somebody willing to give away profits to lure customers.
But by offering your customers a product that is superior to ‘regular” heating oil, you can effectively eliminate the notion of oil as a commodity. If your oil is perceived to be better than the next dealer’s, you can hold the line on pricing and more effectively protect your profit margin.
Better yet, if your premium fuel is a ‘private label” product ‘ unique to your company alone ‘ it is impossible for customers to make a direct comparison to the oil being delivered by any other dealer. People are willing to pay more for a product they believe offers them an advantage. Imagine being the only company able to deliver a tankful of ‘Hometown Heating” premium oil to your customers. Many fuel wholesalers are now making private-label branding available to oil retailers.
The task then becomes one of educating your customers about premium fuels and convincing them that they are worth a few cents per gallon more. Now all the tangible benefits of premium fuel additives come into play, as you enlighten your customers about the superior performance and reduced service issues associated with premium fuels.
Differentiating your company from all the other ‘look-alike” fuel oil retailers crowding the marketplace is a huge, and necessary, step toward securing your share of the market, and keeping your customers warm, happy and safely in your camp.
Duane McLevedge is the premium fuels manager for Global Companies LLC. He can be reached via e-mail at email@example.com, or by calling (800) 685-7222