‘Some people don’t think focusing on energy efficiency brings dollars to the bottom line,” says Craig Snyder of Wesson Energy in Waterbury, Conn. Snyder, a presenter in sessions on the ‘whole house” approach at the recent New England Fuel Institute (NEFI) Expo, used the occasion to tell attendees different.
By adopting the whole house approach ‘ diversifying beyond fuel oil and air conditioning to related lines of business ‘ Wesson Energy posted 58 percent gross margin growth in four years ending in 2012, Snyder told the audience.
Approximately 160 people attended two sessions on the whole house approach, said Bill Spohn, president and chief executive officer of TruTech Tools, a presenter along with Snyder and others. The Expo ran June 10-11 at Gillette Stadium in Foxborough, Mass., home of the National Football League’s New England Patriots, and also included a presentation on the current and future importance of pipelines to the fuel oil industry (see sidebar).
Focusing on ‘home performance” has made a ‘profound” difference to Wesson Energy’s business and its future, Snyder told Fuel Oil News in an interview following the NEFI show. The company changed its name from Wesson Oil to Wesson Energy a decade or more ago, Snyder said, because ‘we knew ten years ago that we wanted to be in a bigger, broader world than just selling oil.”
It was in 2008 that Wesson Energy’s transformation effort really began to take hold.
‘Prices were getting crazy,” Snyder recalled, and compounding matters, the state government was formulating an energy plan that favored natural gas. At that point, two-thirds of Wesson Energy’s gross margin came from fuel oil, Snyder said. ‘We knew we needed to do something dramatically different,” he said, ‘and we knew we had a real challenge in front of us.”
By conducting focus groups, the company learned that customers wanted to reduce fuel oil consumption and that they also wanted options, Snyder said. The company also learned that it needed to play the role of educator with customers.
‘That really was the beginning of changing our culture,” Snyder said. Customers’ goal of consuming less energy ‘propelled us into looking at the whole house as a system and tightening up the shell,” he said.
A ‘culture of planning” began to develop then too, Snyder said, noting that the company had not held regularly scheduled planning meetings. Now the company holds a planning event annually, usually around the end of March, convenient because the heating season is done and the air conditioning season has yet to kick into gear. The planning meeting involves employees and customers, Snyder said. Holding the event annually enables the company to tweak its strategic plan as needed and keep the plan current and pertinent. The company is responding to ‘the commoditization of fuel oil,” Snyder said, and countering that with the recognition that ‘the most trusted employee, the most trusted person in a customer’s home is our technicians. They’re more trusted than the cable guy, the utility guy.”
Fuel oil dealers throughout the industry are well aware of the trust customers place in them, Snyder said. ‘Every company has keys to [customers’] homes,” he said. ‘It’s incredible.”
The goal is to leverage technicians’ role to help the fuel oil dealer diversify, Snyder said. ‘If you’re the most trusted person, what you say to the customer probably means the most,” Snyder said.
To train technicians in the whole house approach, Wesson Energy established a school, and scheduled experts to teach the techs, through lectures and seminars. ‘We have a hundred employees here and they’re required to go for training,” Snyder said. Customer service representatives are trained, to a degree, in technical matters, so that they have an understanding of the technicians’ side of the business. And, Snyder said, ‘Our technicians are training in communication. What to say and how to say it.” For example, asking open-ended questions can initiate a discussion about overall energy efficiency and ‘home performance.”
By helping customers find ways they can use less energy, the technicians become ‘ambassadors of energy efficiency” or energy consultants, Snyder said, and that creates opportunities to sell.
‘We’re now in the insulation business because we found out that was the number one thing [customers’] houses needed in order to reduce energy consumption,” Snyder said. And in the future? ‘We may be in the wet basement business,” Snyder said. ‘We may be in the window business.”
Amid this search for growth opportunities, Snyder took time to issue a caution. The term ‘energy efficiency” needs to be understood in depth, he said. In the case of venturing into insulation, ‘throwing a mess of insulation in an attic” without regard to potential condensation could result in a mold problem, undermining any aspirations to be regarded as ‘expert.”
To help avoid missteps of that sort, Wesson Energy has been sure to have its technicians certified by the Building Performance Institute (get information on the Institute at its website, bpi.com) to give them a grounding in energy efficiency. ‘Our CSRs [customer service representatives] have gone through the preliminary courses at BPI to better understand what it means to be a professional in the building performance world,” Snyder said.
The online world is crucial to the diversification effort too, Snyder said. Google Analytics enables Wesson Energy to track sales and glean insights into how customers and visitors use its website. Further, it helps Wesson Energy’s employees understand ‘how important content is in our website,” Snyder said, ‘such as [using] the right words and phrases so we can get more and more traffic.”
Return visits to the website are crucial, and one way that Wesson Energy keeps customers coming back is with a program that creates for each customer an individualized ‘My Home Energy Report.”
These reports are built on data collected by the techs. ‘Our technicians go in with their iPad and evaluate and collect all the important, valuable data of the home,” Snyder said. Customers can access the report, which becomes a guide to how to save energy in their home, Snyder explained. For example, he said, ‘It teaches them why we recommend insulation, why we recommend fixing a wet basement ‘ all of the background is there to help them understand and to make better-informed decisions.”
He contrasted the usefulness of the reports with a visit he made to a Home Depot with his wife, who was considering buying a washer and dryer.
‘The first thing the sales person did was ask us what we currently have,” Snyder remembered. ‘We didn’t know.” The same went for filters for air conditioners, Snyder said. ‘I had no idea what make and model we had.”
The ‘My home Energy Report” for each Wesson Energy customer includes information on the size of each room, including images of each room and the make, model and serial number of all appliances, Snyder said, as well as the ‘R” value of insulation in the attic. In all, there are close to 120 points of data in each report. ‘We’re in a world where data is everything,” Snyder said.
The company was advised not to leave the data collection and entry for the reports to customers, Snyder said, based on research showing that only about 6 percent of them would do it. So Wesson Energy’s technicians do it.
‘If you can get the technician to go ahead and collect all the data for you, then you’ve got 95 percent of your customers [covered],” Snyder said.
Asked how long it takes for a tech to collect all the data, Snyder said, ‘The very first one we did was 40 minutes.” With fine-tuning it usually takes about 20 minutes to collect the data on the rest of the house besides the basement, which usually is a known quantity based on past visits, Snyder pointed out.
‘They already know the square footage, and what the heating and cooling load is,” he said of the techs. ‘Did we sell anything for that twenty minutes? The answer is, ‘No,'” Snyder said ‘ and that’s just fine. ‘This is about a future marketing position for us,” he emphasized. ‘It’s not about a decision a customer’s going to make today. It’s about making a case for them to make a decision tomorrow.”
The importance of pipelines
‘Pipelines are the least expensive, most efficient, and safest way to transport crude oil and refined products,” Andy Black, president of the Association of Oil Pipe Lines (AOPL) told an audience at the New England Fuels Institute (NEFI) Energy EXPO in Foxboro, Mass.
‘Pipelines are the most preferred option, with typically 70 percent of all crude oil moving by pipeline, and 70 percent of all refined petroleum products traveling by pipelines, nationally,” Black said.
Transportation markets need additional capacity, Black said, and the liquids pipeline industry has begun to respond with ‘new construction projects, reversals of flow, conversions from one type of service to another, and with pump station projects that expand capacity on existing pipelines.”
Black noted, ‘One pipeline project gets all the attention – Keystone XL.” It would expand pipeline capacity southward ‘in a major way,” Black said, bringing crude oil from Alberta, Montana, and North Dakota through Oklahoma to Texas. ‘It wouldn’t be the first pipeline to transport crude oil south from the Canadian oil sands, and it isn’t the only project being proposed right now. But the debate about Keystone XL has grown beyond where it should. The Keystone XL debate should not be about whether Canada produces the oil sands or about greenhouse gas emissions, because neither issue would be affected by the issuance, or denial, of a Presidential Permit. To me, the Keystone XL debate should be about how Canadian crude oil should travel to market.
‘Right now, rail is filling in where pipelines cannot, and moving much more crude oil than ever before,” Black said. If Keystone XL is not approved, Black said, crude oil from Canada will still come to this country. But if it is approved, he said, ‘more crude will move over the best mode ‘ pipelines.” He added, ‘I commend the New England Fuels Institute for supporting Keystone XL.”
Meanwhile, the potential reversal of the Portland Montréal Pipeline has drawn unjustified opposition from environmental activists, another speaker said.
‘This pipeline has safely transported crude oil from around the globe from Portland, Maine, to refineries in Montréal since 1941,” said Patrick G. Binns, Consul General of Canada to New England. Environmental organizations have been campaigning against a possible reversal that would allow diluted bitumen to flow to the Port of Portland, he said.
‘As a result, a number of cities and towns, as well as the [Maine and Vermont] state legislatures, have discussed resolutions looking to ban or oppose the transport of ‘dilbit’ through New England,” Binns said. Binns said that he and his colleagues ‘have provided testimony to correct misinformation and to help towns and their citizens understand that Canadian oil can and will play an important role in New England economic development and energy security.
Canada is the largest supplier of oil to the U.S., Binns said, more than Saudi Arabia and Venezuela combined. Canada exported 2.8 million barrels per day of crude oil and refined products to the U.S. in 2011, representing 24 percent of total U.S. petroleum imports, he noted.