Every CEO worth their salt wants more sales. After all, the top line is a great predictor of the bottom line. In today’s economy with lower fuel and lube demand in retail, and commercial and industrial sectors wreaking havoc on volume, desire for growth can overshadow good business decisions. This article will focus on fuel transactions. Check out these five most common growth mistakes plus learn how you can capitalize when competitors makes these blunders!

Mistake #1 – Unnecessary margin sacrifice.   To recoup lost volumes, marketers are expanding their borders, with some venturing into rural areas they may not have bothered with before. Not understanding the pricing norms in the new geography, the entering marketer typically sets prices using their existing pricing models which would make perfect sense EXCEPT that this “normal” price strategy leaves money on the table. The expanding marketer often ends up undercutting the local competitor by 8 to 10 cents per gallon, when all they needed to gain a good share of the market was 1 or 2 cents. Let’s put this in dollars and cents. A needless 6 cents lost translates to $60,000 left on the table for each million gallons in any market.

·         Smart Growth Action – Conduct market price analysis so you know the appropriate price point and desired market share.
·         Competitor Trouncing Strategy – Know your sustainable competitive advantage which often in wholesale is service related, then cement personal relationships. Visit with every key customer and let them know the new competitor will likely come knocking and the true economics of staying with you. Relationships do count!

Mistake #2 – Forced Centralization.   Many growing marketers see centralization as key to capitalizing on economies of scale. This is all well and good until that centralization interrupts customer relationships. Customers are creatures of habit who like the same process and the same person taking care of them. Massive, swift centralization, particularly after an acquisition, can be absolutely deadly to customer retention.   The customer calls to place an order, expecting that same CSR or dispatcher they’ve known for years, and finds their call routed to another city and a person who hasn’t a clue about them. One order dropped or one delivery window missed and that customer is gone.

·         Smart Growth Action – Don’t centralize until the dust settles and you’ve been able to cement the customer relationship. Get to know the new customers and more importantly, exactly why they buy. Keep intact any systems or procedures that are critical to those customers.
·         Competitor Trouncing Strategy – Actively call on prospective customers playing the “we are local” trump card and stand ready to be the hero for those customers. Some may switch to you immediately, but others will try the new guys. If they know you really care about them and their business, all it usually takes is one major blooper and they will be yours.

Mistake #3 – Driver or Delivery Personnel Change.    The old saying that people buy from people is very true!   While I am a huge fan of top-grading (eliminating the bottom 10-25% per year of your workforce and replacing with A quality people), delivery drivers are the closest people to the customer and can make or break the relationship.  While you can usually get away with replacing company-owned drivers with common carriers on transport loads where no one talks to customer personnel, changing staff even through route changes can be traumatic and unpleasant for valued customers. Technology has helped bridge some of these gaps, but it’s not the cure-all. You still need polite, conscientious drivers with great manners and who can think on their feet.

·         Smart Growth Action – Understand the degree of driver/customer interaction before making changes. Ideally, involve the driver staff in discussions of customer preferences.
·         Competitor Trouncing Strategy – Use your top drivers in sales calls! Whether you are wanting to keep accounts or gain new accounts, a friendly driver that assures the customer of exactly how they take care of customer needs and property can seal the deal because it’s so rarely done. It’s also a great way to show appreciation to a key driver.

Mistake #4 – Totally Overload Existing Infrastructure. Let me share a horror story. A marketer basically doubled his customer count with an acquisition. All the seller’s customers he acquired were downloaded into the buyer’s system. So far, so good. But as orders started being processed, the accounting staff noticed the system slowing down more and more. A mere two weeks after loading in the all newly acquired customers, the system literally slowed to a crawl. A frantic call to the software vendor revealed the customer count had literally exceeded the system’s capability which had never been tested at that level. Bad time to have to make a software conversion! Infrastructure overload isn’t limited to technology, either. It can hit any process area from order to dispatch to billing and usually involves overworked staff as well as overloaded systems.

·         Smart Growth Action – As soon as you can legally involve key area staff with the growth plans and numbers, solicit their opinion to possible bottlenecks. Also alert all IT vendors if catapulting volume! Plan and stay proactive rather than reactive.
·         Competitor Trouncing Strategy – Establish sales personnel call frequency on transitioning accounts. Once per week in the first two months works well, diminishing after that time. As soon as the competitor has a glitch, you’ll be ready. The customers will be flattered you want their business. Share sales target lists with credit staff so they can pre-qualify the best targets ensuring super quick service if and when the time comes.

Mistake #5 – Wrong Customer Assumptions. While everyone is in the grow mode, it’s very easy to make assumptions about customers that are flat out incorrect. I see this most often with “seasoned” buyers who after a few transactions, gauge the next deal by the prior ones skipping one vital part of due diligence – direct conversation with customers. It can also happen when a company’s focus shifts to growth and loyal long-term customers get ignored.

·         Smart Growth Action – Get intimate with prior and future customers. Keep your finger on their pulse, including their challenges, their goals, and their vision by actively asking these questions. Why did they make the buying choice they did and will that same criteria still hold into the future. How’s their business? Have key decision-makers changed? Will buying parameters change? And most ideally, how can you make their life easier?
·         Competitor Trouncing Strategy – Know your customers and even your best prospects better than any competitor. Then, ramp that up one notch to the personal level. Not only what drives the business, but what drives them as an individual. When you’ve made that bond with sincerity and genuine interest, you’ll have won their respect and true acceptance rather than just a transaction.

As you review these challenges and actions, ask yourself, “Is my team following a sales and marketing system that cements our customer growth plans?”  You must answer that question for yourself in order to move forward. ..it is vital!

I think it is such an important topic that I’ve started gathering sales and marketing challenges from petroleum owners like yourself nationwide to drive a new learning program. If you want to drive your sales, and have just a few minutes, I’d love to hear from you!  Please drop me a short email with your thoughts on your current sales and marketing efforts (both good and bad) along with any challenges or successes. You may email me completely privately at [email protected].

In the meantime, wishing you mistake-free, exponential growth!

PetroAnswers Avoid These 5 Common…BUT Deadly Growth Mistakes and Watch Your Sales Soar