REvolutionary Way to Market Home he ating fuels Will this revolutionary program transform the future of fuel companies? Part II (see part I in the January/February, 2015 issue of ICM) Paygo promises fuel companies a compelling competitive advantage that attracts new business, strengthens retention, positively differentiates their brand, improves delivery efficiency and neutralizes a key advantage of natural gas. If it can deliver this combination, it will certainly transform many companies’ futures. In part one, we explored the path that brought Paygo to market, and why it is so appealing to full service fuel customers. Paygo enables fuel companies to bill their customers like utilities—after they actually use their fuel. It provides the financing, integration with popular “back office” software, and turn-key marketing programs that make this possible. Customers like it because it keeps their money in their pocket longer. They don’t pay for fuel that just sits unused in their tank. It seems fairer, and it makes the size of their average fuel bill smaller. The Paygo monitoring system also helps give them confidence that they won’t run out of fuel. These are all big wins. What’s in it for fuel companies? It’s no secret that today’s fuel companies face tough market dynamics. Conversions are shrinking the oil customer base, spurring increased competition as companies vie for slices of a smaller pie. More companies are entering the propane space, increasing competition there as well. Price volatility causes customers to shop more. Customers themselves are changing, and the new breed, empowered by the internet, is less loyal and more price sensitive than its predecessor. In a nutshell, there are too many deals, it is too easy to switch dealers and, to the average customer, fuel companies look too similar to each other. The cost of all of this is huge. The constant churn sucks profitability out of companies, as replacing these customers is extremely expensive. Between “give-aways,” discounts on service plans, below market fixed or capped deals, 10 ICM/March/April 2015
ICM September-October 2014
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