Oil and Gas business downturn.
Learn the 8 steps you need to know to come out ahead. And for sales tips to help you in this low crude price market, click here to check out our new FB page.
Hey, folks let’s learn something new about the oil and gas industry.
All right. Today’s show, Oil and Gas Business Downturn: 8 Steps to Come Out Ahead. I’ve had hundreds of companies reached out to me since this low crude price environment has hit asking for help. And, they want to understand how to at least keep their doors open during this low crude price environment and then what they need to do to actually come out ahead. So, we’ve helped them, now, we’re going to see if we can help you, so let’s jump right into it.
First thing, you need to understand why your business is slow. Now, you may go, “Mark, my business is slow because the price of crude is $37 per barrel.” No, no, no, no, no. Why is your business really slow? Let’s say you provide valves, right? The oil and gas industry is still buying valves, so even if it’s a slow time right now, why are they not buying yours? Let’s say you sell some software package out there and people quit buying it. Is it that your software is not vital to the business? It’s a nice thing to have – not a must have? It’s really important you understand the real drivers behind your business being slow, especially in an Oil and Gas Business Downturn.
Next thing. You have to understand why your clients buy from you. Here is a place where I’ve seen some major multi-million dollar companies that had this twenty-year practice in oil and gas not understanding the basics why their clients are buying from them. And there’s a lot of companies that we’ve worked with that think they know why their clients are buying from them, but they’re wrong, right?
So, I’ve seen it all, I’ve seen it where clients tell me that the reason their clients are buying from them is because they’re cheaper and the truth was, it wasn’t that they were cheaper, it’s that they can get their products to the client – client faster which help them hit their project dates, right? I had companies out there who thought that the reason the oil and gas industry was buying their stuff was because it was high quality. It wasn’t that it’s high quality, it’s that it was safer products out there which is a major business driver in this industry.
So, you really need to understand why your clients buy from you and get rid of any preconceived notions in your head, you need to hear it from their mouth. There are couples of ways to do that, so we do this a lot for our clients, we do some deep dive interviews into their existing clients, such a great way to do it. If you ask the same questions enough time to enough different people we see a trend in that data. The other thing you can do is a focus group. Pick up the tab for lunch, get a dozen of your clients in the room together and jut talk to them and understand why they buy from you. It’s vital to know why people buy your stuff in order to deal with an Oil and Gas Business Downturn.
All right. Next thing, you need to reevaluate your business strategy. If your business strategy is well, our phones have always rung and Chevron has always bought stuff from us, so we’re going to sit here and wait for our phones to ring and Chevron to buy from us. That doesn’t work, this is 2016. The way business was done in the last, you know, ten years doesn’t work now even the last five years.
So, you know, figure out strategically how do you structure your business to thrive in a low crude price environment in a high crude price environment, you know, where are the opportunities in the market, what are the risks of you doing business and reevaluate your entire business strategy. And, I’ll give you a tip, this should not be a document to do once, this should be a live document that every year you reevaluate because things are going to change in the industry.
Next thing. And, please, people look at new market. I don’t know how many companies that serves upstream have reached out to me that don’t know that downstream was on fire right now, that downstream has tons of money, they’re building new stuff, they can’t hire people quick enough. And, they’re totally blind to that, they think the oil and gas industry is upstream, it’s not. Learn the entire industry and find new markets that you can sell your product or service to and spend the time and resources to develop those markets.
All right. Next thing. Learn. It’s slow, because of the Oil and Gas Business Downturn. There’s not orders coming in door, you’re not having to kick at all these purchase orders and all these sorts of stuff. Since it’s slow, take your time to learn, learn things that will affect your business, learn about other parts of the industry, right? Learn how to do things like digital marketing. There’s a great resource out there called Lynda.com. It’s very inexpensive and you can learn almost anything out there, right? You can learn better ways to package your products, you can learn social media, you can learn, you know, how to enter new markets in Asia. Go spend some time to learn right now.
Then, please, please assess your existing market and sales tactics. If your sales tactics is I go play golf with the VP of ExxonMobil, that’s not a sales tactic anymore in 2016. If your marketing is that you have yellow page ads and you go to trade shows for the fish bowl to collect business cards, that’s not working anymore. You need to learn how to sell and market in today’s world.
Selling right now in 2016 is about problem solving. Where there are people out there that are potential clients to you that have a problem that your product or solution solves, then your sales people need to be able to explain how they solve problems. That’s what sales is. Yes, relationship building is important, but now what is important is being able to solve problems.
What doesn’t work anymore is to be the educator, to walk in the door and say, we’re blah blah blah and we do blah blah blah and blah blah. No, no, no, you do all your work upfront so when you walk into that prospect meeting as a salesperson, you know, what problems you’re dealing with. You even know how much it’s costing them and you tell them I know you have this problem, I know it’s costing you this much money or this much and your safety metrics or whatever. Be the problem solver.
Marketing – marketing is rapidly switching to digital marketing. The old print stuff that work in oil and gas even just five years ago, that’s disappearing. And if you don’t understand the new digital marketing game, take the time to learn it or find somebody that can teach you, right? That’s what we did. and its blows the doors off during an Oil and Gas Business Downturn.
Next thing. You have to lower cost, right? Every penny counts right now. That may mean taking a cut in your salary, that may mean, you know, getting your – your entire employees to take a 15% cut. It may mean shopping for different health benefits. It may mean having different resources for fleet maintenance. Everything you do to lower cost that can help you get through this.
Then, and here’s a major one that nobody ever does. You have to build a plan for the rebound. You know it’s coming. And, you know I’m been saying $60 a barrel by August, when that rebound comes how are you going to best capitalize on that? You’re going to have to staff back up. Do you have an eye on that talent you have a finger where you can pick that up? If you’re a manufacturing, you may have to ramp up production. Do you know how you can ramp up production? Do you need to look at new facilities ahead of time? Capital? Where are you going to get the capital to grow? Building a rebound plan during an Oil and Gas Business Downturn is a sure route to future success.
Build the plan for the rebound, so that when it comes back you can best maximize this and you’ll be sitting pretty. If you don’t build a plan for the rebound, when it comes back, business will be okay and the next time we have a downturn and you know we’ll have another one and another in ten to fifteen years, you’re going to be in the same place you are right now. So, there you go, eight steps to come out ahead during oil and gas business downturn.
We have a Facebook page. Long story, I’m not been on Facebook. Now, Modal Point has a Facebook page. Go check it out please because we have some very exclusive content. It’s only on our Facebook page to help oil and gas sales professional get better in playing their game. Very short, you know, thirty, forty-second videos for tips and tricks. So, go check out our Facebook page. We’ll put a link in the show notes.
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So, folks I hope this helped. We will see you next time.