Learn what are the top 5 differences between oil & gas and other markets, and how that can affect your sales & marketing efforts.
Transcript of Session –
Hey, folks. Let’s learn a little bit more about the oil and gas industry.
All right. Today’s show was really pushed out to me by a bunch of client meetings we’ve had in the last couple of months predominantly with aerospace and DOT companies that simply just do not understand the differences between doing business in the oil and gas vertical and other markets. So I thought we’d talk a little bit about what the main differences are.
So, one of the main differences quite frankly is the oil and gas industry is very profitable with some of the segments hitting close to 40% final adjusted profit ratio. And you may say, Mark, so what they make money. Well, it drives the business culture. So things like operational efficiency is not as important to the oil and gas industry as opposed to something like big bucks retail.
If you go to Walmart and say and tell them you can save 3% or 4%, they’re all over that. If you go to Halliburton and say you can save 3% or 4%, they don’t care. Why? Because their margins are so healthy. It also allows them to have a very fat organizational structure with a lot of layers of management some of which are retired in place. What does that to mean to you if you’re trying to sell to oil and gas industry?
It means that it’s hard. It means that instead of quickly getting to the people that you need to get to, it may take months or years to get the right people and it will be multiple decision makers. And so, that’s something you need to understand. Navigating the oil and gas industry is very hard and it’s almost impossible for somebody from the outside.
Another thing about the industry is risk is a common business metric. Think about it. Think about what they do. Drilling through thousands of feet of stone, rock, water, sometimes through – at the bottom of the ocean, very hostile environment, it’s high pressure high temperature. You have the geopolitical risk for doing business in other countries. So risk is something they think of constantly as opposed to other verticals that really don’t considered as one of the business drivers. So what does that mean to you?
It means that risk is something that they use to make decisions. So if they have some old software that’s been in place for ten years and you have a newer version that’s better, they’re thinking about the risk of moving to your better version not about the benefits that you bring with the newer version software. So once again, you have to understand that when you think about your strategy to penetrate the oil and gas vertical.
Another thing to understand is it’s truly global. So let say you’re talking to a business unit of Shell, the decision making team, three or four maybe in the US, a couple would be in the UK, one guy will be in Brazil, and that one guy in Brazil is Brazilian, he’s not, you know, English. The guys in the UK are from the UK, the guys in the US are from the US, so being able to work with in those cultural boundaries is something that’s vital if you’re trying to sell your product and service to oil and gas.
And then finally, the oil and gas industry is old fashioned and that drives a lot of challenges for companies that are used to having a swift sale cycles. In the oil and gas industry it’s about the relationship with the people. It’s about doing you do good business. It’s stuff that the rest of the world has kind of left behind ten and twelve years ago and a lot of companies I see struggle with understanding that.
So hopefully this helps. If we can help you in any way, please reach out.