Julie Valvo remembers vividly the first online sale of fuel oil by a venture launched last season by Wilcox Energy, a company in Westbrook, Conn., where she is sales and marketing manager.
“When we got our first order it was exciting,” she says. A customer called, wanting oil delivered, but was not interested in service. “I sent them to the website and they registered and ordered,” Valvo says. Now a second season of online selling is approaching, and the company hopes there will be “significant growth” for WilcoxOilOnline.com, Valvo says. Based on the experiences of some dealers who have a longer record of selling fuel oil online, Valvo and Wilcox Energy may have good reason for optimism.
Five-and-a-half years ago Fuel Services, South Hadley, Mass., set up an online sales operation called Pay Less for Oil (paylessforoil.com) “to increase cash flow,” says Christopher Chase, executive vice president for Fuel Services. “That was the main reason back then,” Chase recalls, adding, “We struggled in year one.” But business has boomed since then. “We grew quite fast,” Chase says. “We’ve been up forty percent year by year.” The company serves western Massachusetts and north-central Connecticut. “Our e-commerce business keeps growing and growing and growing,” Chase says. “We have fourteen thousand-plus customers. That’s from zero in five and a half years.”
Today, Pay Less for Oil has three customer service representatives assigned to handle the online business, Chase says. “I had to hire more drivers,” he reports. “It’s been very successful. It’s a positive cash flow business. Even with warm winters our gallons continue to grow.”
Chase and Valvo were two of four dealers participating in a panel discussion, “The Impact of eCommerce on My Business,” at the New England Fuel Institute Expo in June in Worcester, Mass. The other dealers were Nick Scata, owner and president of Tower Energy, Plainville Oil Co., Simply Heating Oil, and Northeast Energy Co.—the four companies are based in Plainville, Conn.—and Chris Grey, vice president of Bonded Oil Co. and BondedOil.com, Paramus, N.J. Moderating the panel was John Vrabel, a co-developer of Energy Engine, a company in Stroudsburg, Pa., that markets an e-commerce system to fuel dealers. Vrabel asked the dealers why they decided to venture into online sales, how they did it and how it was going.
Marketers create a different identity online, to draw different customers and move more gallons.
Under its original, longstanding name, Wilcox Fuel was a traditional full-service company. It serves some 4,000 customers in Connecticut shoreline communities within a 20-mile radius of its base in Westbrook, Valvo says. The company name was changed to Wilcox Energy a few years ago to reflect diversification into biofuel and propane. But the dealer faced increased competition from new companies during the past couple of years, Valvo says, and was receiving calls from customers cancelling their accounts. Service and loyalty “don’t mean as much” as they used to, she says. “The consumer is changing. Full-service is stagnant.” The company began considering an online venture to appeal to customers who prefer to buy via the Web, using smartphones, tablets, laptops or personal computers.
Many such customers share purchasing traits, the dealers say. One of the dominant characteristics: “They don’t want to talk to anyone,” Valvo says. “They want to be in control. They want to get what they want, when they want it.” While “Millenials”—people who reached young adulthood in the early 2000s—are certainly part of that group, age isn’t the only marker. The group includes people who are struggling financially and people who are wealthy, Valvo says. “The new demographic is anyone who has heating oil,” she says.
Scata describes the typical online customer as someone who “just wants to purchase their heating oil” typically using a smartphone or a tablet. “They don’t want to talk to anyone,” he says, echoing Valvo. “Online customers are looking for price.”
While some dealers might find the lack of personal contact disconcerting, Chase of Fuel Services points out that dealers can draw some reassurance from the fact that customers purchasing online can only do so with a credit card or a debit card, and that “automatically sets a [qualifying] level of customer.”
KEEPING the identities of their online price-oriented ventures distinct from their traditional full-service operations is a priority for some marketers. Valvo and others at Wilcox Energy had agonized over the details of setting up a Web-based sales operation, especially over what to name it, before finally settling on WilcoxOilOnline.
Of the four companies Scata operates, two—Tower Energy and Plainville Oil Co.—are full service. Simply Heating Oil is a low-price competitor. Northeast Energy Co. was a COD company when Tower Energy acquired it in January. “We moved it to an online platform,” Scata says. All together the four entities operate in 14 towns in central Connecticut, Scata says.
Customer service representatives were trained how to respond to calls from full-service customers wondering why a Simply Heating Oil truck was making a delivery when “I didn’t order from them.” CSRs would reply, “Yes, we’re working with them. They’re an affiliated company.”
There is a “Price Match Guarantee” at simplyheatingoil.com. The website explains, “Our Price Match ensures you pay the best price for home heating oil in your town, every time. If for some reason we cannot match our competitors’ prices, we will apply a $10.00 credit towards your next order.” Scata says the differential between the discount and the full-service price at the height of the heating season could be as much as forty cents a gallon.
“In addition to the low heating oil prices you’ll get with Simply Heating Oil, we provide the convenience of online ordering 24 hours a day,” the website declares. “Register for free today and see just how easy it is to order your heating oil, pay online, track your oil deliveries, and more. Check out today’s heating oil price in your town and start saving!”
But the Simply Heating Oil website isn’t entirely isolated from its affiliated dealers. The site features a $25 discount off a “a tune-up with our parent company Plainville Oil,” and a link to “Full-Service Options.” That link leads to a page identified with Simply Heating Oil graphics that offers emergency HVAC services; at the bottom of the page appear the Tower Energy and Plainville Oil Co. logos.
MARKETING a new online venture is a project that some choose to outsource. Wilcox Energy hired a company to build the website for WilcoxOilOnline and to conduct the digital campaign to promote it, Valvo says.
To get attention for its Pay Less for Oil online venture when it was launched, Fuel Services carried out a marketing and advertising campaign that included digital components such as e-mail, and in-the-real-world efforts, such as billboards, says Chase.
For BondedOil.com’s Christopher Grey there is an aspect of the online operation besides the actual fuel oil deliveries that must be conducted “in the real world” or IRL as the current shorthand has it. “We will not deliver without a tank inspection,” Grey says. “We don’t do business with them if they won’t allow us in the basement. The tank inspection is our last line of defense. We don’t want to be liable.” Grey admits, “The customers question it sometimes.” First-time homeowners especially. “They often don’t know what they have,” Grey says. “We work with them. When we explain, ‘We’re doing it to protect you’—they understand.”—Stephen Bennett
Stephen Bennett is the editor of Fuel Oil News.