Understand the difference between the oil & gas companies needing your product or solution, and them actually buying it.
Transcript of Session –
Hey, folks. Let’s learn something new about the oil and gas industry. Shall we?
Okay. Today, we’re going to talk about something that’s subtle, but vitally important. The difference between having a need for your product or solution and willingness to buy.
We see this quite often and you really need to understand this when you’re looking to a guy your sales efforts. So recently, we did a project for a client that was in this exact same scenario. We went out and survey the market and found that the upstream side of the house and it serves as side of the house, both had a very strong need for what this client does. But surprisingly enough even to me, was that the upstream side of the house had almost a 90% buy now rating and the services of the side of the house had only about 12% buy now rating.
Now, think about that. Upstream is almost 80% stronger buy in their product now than services, so of course, you would want to concentrate your effort on the upstream side of the house. And you may want to ask why since they both have a need for the solution. Well, it’s – part of it is tied into the profit margin of the oil and gas industry. The margins are usually so robust that even though they have a problem, if they’re not in the mood to buy they’ll just simply not going to buy right now. And in this case, what we think it is after our research was that there’s been a major Gulf of Mexico projects cancelled that affect the service industry.
There was Hadrian North which was cancelled by Exxon, it’s a multi-billion dollar project, that was a deepwater project and you had Mad Dog which was cancelled by BP which was an ultra-deepwater project. So the services side of the house are a little bit worried about cash flow over the next five years, so of course they’re buying a new solution, the appetite that is much lower than upstream which rocking and rolling.
So, I hope this gives you a little bit of insight on what you need to focus on when you’re trying to sell a product or service in my industry. And if we can help, just reach out we’d be happy to do it.