Today, we’re going to talk about how to choose oil and gas sales experts.
If you were looking for oil and gas sales experts, how would you know you have found someone who can do the job? While we say oil and gas sales experts, we are talking about any oil and gas consultant.
There are certain things you can look for to let you know if a person or company can actually move the needle for you, and impact your business in a positive way. Let’s just jump right into it.
#1: Oil & Gas Sales Experts Offshore
Number one, you must determine if they have ever been offshore. I’m not saying that a consultant cannot be good if they’ve never been offshore. What I am saying is that about 70% of the spend in this industry is offshore.
If a consultant has never been offshore, how well do they really understand the industry?
At modalpoint, we have a vast amount of offshore experience. We understand the offshore industry is a different world.
The differences start with the business model. The model of being profitable varies greatly from offshore to onshore drilling. Experienced oil and gas sales experts understand what drives the bottom line in offshore.
By leveraging this knowledge they’re able to help companies to develop executable sales strategies that will lead to revenue growth.
#2: Your Network is Your Net Worth
The next important item is to evaluate what oil and gas organizations the consultant or company is a member of.
This industry is relationship based. It’s very also political. If you’re not well networked or plugged into the politics, you will be seen as an outsider. You won’t be able to develop the high-level relationships that are vital to success.
One of the largest groups that exist is the American Petroleum Institute (API). API sets the standards for almost everything offshore. It’s also the second biggest political lobby group in the US right behind AARP.
I also participate in a Science, Technology, Engineering, and Mathematics (STEMs) outreach program. It’s sponsored through the Society of Petroleum Engineers (SPE). It’s why I teach at a local high school every Friday morning.
As you can see, modalpoint is well plugged into the politics of the oil and gas industry. We leverage our relationships through active organization memberships.
Be sure to evaluate what organizations your consultant is a member of. It tells you how involved they are, and shows you how much they really comprehend the industry.
#3: The Big Four
Next in line; can they name the four segments of the oil and gas industry, and can they explain the differences between them?
Upstream operators get oil out of the ground. Midstream companies moved hydrocarbons from point A to point B. Think pipeline, railroad companies & super tankers.
Downstream companies turn the raw materials into products that can be sold in the open market. The companies specialize in petrochemical refining, fuels refining, ethylene crackers, plastics, fertilizer, etc.
Service companies produce no actual petroleum or petroleum product. Instead, they provide a service to the Oil and Gas industry. Companies like Halliburton, Schlumberger, FMC Technologies & Dril-quip help Oil and Gas companies with all aspects of their business.
In a nutshell, these are the four segments. If “oil and gas sales experts” can’t articulate these 4 segments of the industry, how can they help you and your company sell your products and services in this industry?
#4: End-to-End Understanding
In addition to understanding the segments, can they describe how oil gets from the ground to the fuel tank of your car?
It takes a coordinated effort through a very complex project to first discover oil.
After oil is discovered and pulled out of the ground, it has to be processed and transported. Then it’s got to get to a refinery. After its refined, it’s got to be shipped to your local gas station. Finally, you can pull up and fill your car.
Anyone who knows the industry should be able to clearly explain this process. If they can’t, they don’t understand the industry and I doubt they could help grow your business.
#5: Got Geopolitics?
The industry is global (not international). You must understand these difference if you’re going to be successful.
Wal-Mart is international. There are Wal-Mart stores in Mexico. But if you go to a Mexical Wal-Mart store the manager is from the US. It’s international, so a little piece of America is stuck in another country.
The oil and gas industry is global. If you go to an office of Schlumberger in Mexico the people that work there are Mexicans. If you go to a Chevron office in Rio, Brazil, they’re Brazilians. Same way in Norway, they’re Norwegians.
This industry is truly global. Its products are also a global commodity. Geopolitics is a big driver in this industry.
Can your consultant explain to you how the existing changes in law in Mexico geopolitically affect the industry? Can they tell you about the new investment operators are willing to make in a country?
What about risk? What risks are associated with the state of affairs in Middle East? How does US support in Iraq drive business decisions?
What is happening with the finds in Israel? What about the Russian economy? Do they understand the clamp down caused by low crude prices in the country?
Finally, why does increased consumption in China matter?
Having a high level view of the big picture is critical. True oil pros can connect the dots. They understand why increased Chinese consumption matters, and can quickly relay that information to you.
If your consultant can’t help you understand these facts there is no way they understand the industry. As a result, they can’t help you maneuver through the business drivers that exist geopolitically.
#6: Are They a Jive Turkey?
Let’s talk about oilfield language. The industry has very unique vernacular. We love acronyms.
Does your consultant understand these terms? Can they define a NOC, Super Major, BOP, fracking, or tell you what a pig is? Do they even know what these terms mean?
A NOC is Nationalized Oil Company. These oil companies are owned by their respective national governments. Saudi Aramco, Petrobras, and Pemex are all examples of Nationalized Oil Companies (NOCs).
There are also Independent Oil Companies (IOCs). An handful of IOCs are called Super Majors. Super Majors are companies that do it all: Upstream, Midstream, Downstream and Services.
Can the person you’re talking to define a Super Major?
Back to acronyms. What is a BOP? True oil pros know BOP is short for “blowout preventer”. Drilling companies use them to control the well. But you can drill through a BOP.
Trees, on the other hand, are a whole other animal. A tree (also known as a Christmas Tree) does the same thing. It gives you control of the well. But it is used after a well goes into production. You can’t drill through it.
This brings us to the pigs. What the heck is a pig?
Everywhere else pigs make bacon. In the oil and gas industry pigs clean up pipeline.
If the company and the people you’re talking to don’t know the lingo, do they really know this industry?
#7: Oil and Gas Sales Experts Have Proven Results
Anyone can say they are “oil and gas sales experts”. Do they have a successful track record driving revenue for other companies within the industry?
Maybe they have a sales and marketing background. That alone is not enough to help implement a sales strategy that turns revenue in a predictable manner.
Here’s the difference. I could easily be a sales guy for Halliburton. That would mean I have oilfield sales experience. But generating revenue for a company who is selling into the industry is a completely different story.
If you’re engaged with someone who is looking to help you generate revenue, have you vetted their experience? If they haven’t performed this role before, I would doubt that they could actually help you.
With modalpoint, we have a track record of successful customer engagements. For us, it’s not a guessing game. We have it down to a science.
If you Google modalpoint reviews or modalpoint testimonials, you’ll see a whole slew of testimonials from large companies and some senior managers about how we moved the needle for them (like this one).
If you’re engaged with a consultant that can’t give you existing clients’ success stories that tells me one thing. It tells me that they’ve never done it before, which means the odds of them successfully helping you are pretty darn slim.
#8: Location, Location, Location
A lot of people think Houston, Texas is the center of the oil and gas industry in the US. It is.
But it’s much bigger than that. Houston, Texas is the capital of the global oil and gas industry.
Any oil and gas company on the planet most probably has offices here. Saudi Aramco, Statoil, Petrobras, Pemex, all have Houston based US headquarters.
It’s the reason modalpoint is here. This is the epicenter of the industry.
Whatever consultant you’re using, if they don’t have offices or at least people here, do they really know the industry?
#9: Has Passport Will Travel
Next, do they have a passport? We talked about this earlier. The industry is global.
If I engaged with the decision making team in Chevron, there will be several people involved. Three or four guys in San Ramon, California, five or six of in Houston, two in London, one in Norway, and probably one in Rio.
I have to know the key players. I have to know where they’re located, and (most importantly) be able to engage with them while understand their business culture.
I have nothing against Brazilians. My wife is Brazilian. Honestly guys, I love you to death!
But when I engage Chevron employees in Rio I know they’re going to be three hours late for their own meetings. As opposed to the Chevron guy at Norway. If I’m a minute late it’s an insult.
Whatever oil and gas sales experts you’ve talked to, they need to articulate and understand global business culture. They need to have worked, lived, and been successful within these different business cultures.
If they don’t have this experience there is no way they can understand this industry.
#10: Understanding Risk Profiles
Another critical point; can they explain why the oil and gas industry is different than any other vertical?
If you’re a big box retailer, such as Walmart, Home Depot, or Lowe’s and you make a mistake the worst that could happen is that you lose a customer. If it’s bad enough you might lose your job.
If you make a mistake in the oil and gas industry people die. Let that sink in.
In addition to death, mistakes in this industry can cause huge environmental catastrophes. This drives shareholder value to hit rock bottom.
This industry is extremely biased against risk. That’s just how the industry thinks.
Going back to our big box retail. If you introduce something new to them the first thing they ask is “how do I benefit from using this”? That doesn’t mean they’ll buy it, but the benefits are what come to mind first.
In the oil and gas industry the first thing they ask is “what is the risk of changing what I am doing now”? Risk is evaluated far before any benefits discussion. This thought process happens even when the oil and gas company has no existing process in place.
There are many ways you can get around this. But you have to understand the risk-biased nature of the industry.
After you understand how risk works in this industry, you have to factor in relationships, the profitability of the industry (by segment), and the global nature of the business.
If your consultant does not understand why this industry is different they will fail in helping you to successfully sell into it.
#11: The Check’s in the Mail
Is your consultant charging you by the day/hour or did they provide you with a lump sum cost? If not, consider why.
When we engage with a client we sit down with their team. We conduct a white boarding session to discover and then plan four things:
- What you want to accomplish
- What deliverables to expect
- What time frames are realistic
- What are the expected outcomes
Then, we price it right there with a lump sum . This is our standard operating procedure. We do this often enough we know exactly how much it’s going to cost. On the spot.
Unfortunately, there are a lot of consulting companies that try to get their hooks into you. They do this with day and hourly rates. Which means their primary goal is to increase their billable hours.
To put it bluntly, consultants who charge hourly rates don’t have your best interest at heart. (Click to Tweet)
First, if they can’t give you lump sum pricing do they really know what they’re doing?
Second, what is their real goal if they’re trying to increase their billable rate? Is it to help you or to help themselves?
If a company’s goal is to increase their billable rate, what are the odds they’ll be able to help you?
#12: Businesses Don’t Fail, Systems Do
Moving away from pricing, we need to address the process they use to help achieve your goals.
Can your consultant describe it to you? At modalpoint we follow a very rigorous process with all of our clients. It leads to success because it’s repeatable.
We know exactly what works.
If you engage with somebody that cannot talk you through their process they haven’t done it enough, or they’re still trying to figure it out.
Show me a business without a defined process and I will show you a failed business. One that will struggle delivering success.
#13: The Deal should not be the Focus
Finally, let’s get emotional. Is the consultant or company you’re working with totally detached from closing the deal?
This one is EXTREMELY important. When we engage with you closing the deal is not even on our radar. It’s out in left field somewhere.
We’re focused on seeing if we can help you. If we can’t we want to know that as quickly as possible so we can focus our attention on another customer we can help. If engaging with you is not a good fit, we don’t want to waste your time. And we certainly don’t want to waste ours.
If we can help you and we come to an agreement, then we close the deal and that’s great.
But our focus is not on closing a deal.
A lot of consulting companies focus on closing deals, not helping you. Once again if closing a deal is their primary goal, will they really do their best to help you?
Professional oil and gas sales experts are focused on helping. Their sales teams don’t pressure you to sign a contract because they know they’re not a fit for everyone.
Trust Your Gut
So you may say Mark, what is the deal this long blog post? Usually your blog posts are two or three minutes.
Well, last week I was at the Houston Energy Breakfast. I engaged with some fellow consultants in the industry who work for very large companies
We were discussing this very topic. What separates good oil and gas consultants from bad ones? And what can we do about the bad ones who give good consultants a bad name?
We eventually came up with a some rules of engagement, which inspired this post. We hope it will help people find high quality oil and gas sales experts.
We also came up with a checklist. Click here to download the list.
This should help you determine if you are engaged with someone who can actually help you, and insure your success.
I’m not saying someone has to get 100% of these correct. Use your gut. If somebody can get 70% and you get a good feeling from them, focused on helping you instead of closing the deal. They are probably good to go, and a sound choice for oil and gas sales experts.
If the people you’re talking to have their sales team focused on money, billable rates and closing deals – RUN AWAY.
Even if they’re a large consulting company – RUN. As fast as possible!
Because “truthiness” might be a word in the dictionary. But it’s not a trait you want in a consulting company.
What Do You Think?
What tips do you have for selecting oil and gas sales experts? What criteria do you use to separate true pros from oilfield fakers. If you have more to add to the list, please leave a comment below.