How do you go about marketing your oil and gas
business effectively when you have limited capital? How do you find new
customers or clients in the tough oil and gas industry; when you have
not established your credibility and competence? This article will
answer your questions.
I recently got an
email from a reader seeking advice on some business challenges he is
facing. Now
to be sincere with you, I get tons of emails daily but I am
very picky about the ones I answer and the reason is because I have
provided most answers in my articles on this blog. Secondly, most
readers tend to ask me generic questions that are very broad and would
require a full text-book volume to answer.
However,
there’s this particular reader who emailed me with a challenging
question. One of the reasons why I took the pain to reply is because
this particular person is a doer; he acts on advice given, even when it
seems impossible.
Sometime ago, this same person asked for my advice and I responded in through this article “4 steps to financing your business when no one wants to invest with you.”
Now he is back again. Please for those seeking advice on how to start a
business even when you have no money, I suggest you read my reply to
his first question; which I linked to above. Below is an unedited
excerpt of the message he sent me. Please take note of the bolded part.
Dearest Martins,
It’s your friend *Name withheld*. It’s really been a long time since we last spoke over phone. My dear brother, I haven’t been able to start-off a business after all this while. The blog I tried to set-up did not see the light of day. Because after setting up the blog, I wasn’t making any money from it. So I had to abandon that project.
Right now, I have incorporated my company with the C.A.C, as a limited liability company; and I have opened a corporate current account. I wish to be an independent petroleum product marketer and I have decided to start-off as a supplier of petroleum products, like diesel (AGO), petrol (PMS) and kerosene (DPK). For example, I can supply diesel (AGO) to big hotels, telecommunication base stations etc, and I can supply petrol (PMS) and kerosene (DPK) to filling stations.
I have been gaining experience and learning the trade under a friend of mine. To become a petroleum product marketer, it’s basically about sourcing and purchasing the products from the storage depots in Apapa, here in Lagos and then taking the products to the buyer, after price has been agreed.
I have two challenges, my brother.
1. Getting funds to buy the products from the storage depots in Apapa. For example, a truck of 33,000 liters of petrol (PMS) is about N3.5Million – N4Million (which includes all the dues, expenses and transportation to the buyer).
2. Getting my own customers. I mean people/filling stations I can supply to.
Firstly, to tackle the 1st challenge, I met someone who works with a reputable oil marketing company. They import petroleum products into the country. I told him I don’t have money to start the business or buy the product and that I needed help.
By the special Grace of God Almighty, he promised to be giving me the products on credit to supply on credit; then I pay the product immediately after delivery of the product to the buyer and then share the profit with him 70% for me and 30% for him. Thank God, I have been able to leverage on this person and formed a strategic alliance with him.
Secondly, I intend go to nearby states to Lagos (since the petroleum products will be sourced from Lagos), like Oyo, Ondo and Osun states, to source for buyers of petroleum products (e.g filling stations). But my challenge is that I don’t know how to proceed with this move. I know this involves a lot of marketing. How do you think I can go about sourcing for filling stations in the aforementioned states?
Please advise me. Your advice will be very useful.
Thank you.
Your friend,
(Name withheld), from Lagos.
- My Reply
It
is the early hours of the morning, 01:48A.M GMT+1 to be precise and I
am yet to go to bed. Why? The reason is because I was moved by the
challenges you are facing so I made up my mind to reply before going to
bed.
First I want to thank you for the effort you
have taken so far. Secondly, I want to thank you for acting on my advice
to find out your own path. I give advice almost on daily basis but
rarely do people act on it. Why?
The reason most
people never act is because I usually disappoint them. They rush to me
seeking for advice, expecting me to give them the Holy Grail or
underground secret to making money. Some even go ahead to ask me to
suggest a business that will provide them an ROI of 40%monthly starting
from scratch. On a more serious note, it’s quite funny and sad as well.
This is why I am taking the pain to reply you publicly, so others can
learn.
Now
back to the business at hand. With the little knowledge I have about
the petroleum industry, I can tell you that it is a tough industry and
highly capital intensive. But success can still be found even in the
toughest businesses. For you to have taken the pain to learn the ins and
outs of the business, I believe you are a step ahead. But you still
have a long way to go. You have gained the knowledge and basic education
of being an independent oil and gas marketer; now it is time for you to
gain some personal real life experience.
5 Killer Marketing Strategies for an Oil and Gas Company
Now
when it comes to running a business and sourcing for customers, I want
to state clearly that there is no magical spell and no short cut to
success. You have to start from the scratch and learn fast, or your
business will die. Secondly, I want you to understand that there is no
laid down rule for finding customers or selling your products. You just
have to try a lot of tactics and strategies; then you choose the ones
that worked best and replicate it.
Before I go any
further, there’s a very important question you must answer. In fact,
finding an answer to this question may be the beginning of your
breakthrough in the oil and gas marketing business. And the question is
this:
Why should the petroleum product retailers or consumers boycott their existing supplier to buy from you?
Yes,
this is a very critical question you must answer. It is a known fact
that petroleum products are commodities that can hardly be branded and
the price is strictly regulated. So why should the filling stations
and telecom companies buy from you? What is your competitive advantage?
What separates you from the other marketers? Can you compete with faster
delivery? That’s left for you to find out but the truth is that
you need a key point on which to convince the gas stations and companies
to patronize you.
a. Send Business Proposals
This
might work for hotels and telecom companies because these companies
often require formal applications and protocols, but it may not work for
filling stations because most fuel stations in Nigeria are run
informally by low skilled workers. You can write proposals to these
companies highlight why they should consider you as their petroleum
products supplier. But bear in mind that the chances of failure is
higher when applying this tactics because you will almost never get a
reply.
b. Talk to those that matter
This
is the most difficult but effective way to look for customers for your
petroleum products. Walk to filling stations or your target customers
and speak with them face to face but make sure you are speaking with the
owner, manager or decision maker, so that you won’t be wasting your
time and effort.
c. Concentrate on finding just one customer
Sometimes
in life, you just need one customer to grow speedily. So concentrate
your effort on pursuing just one customer, provided you have established
the fact you have a good chance of winning a deal. If you are lucky to
get the deal, go all out to impress this one customer by delivering on
your promises; then politely ask your customer to recommend you to his/her friends and associates in the industry.
d. Look within your neighborhood
Don’t
despise the days of little beginning, so look within your neighborhood.
Consider the roadside or street retailers of Kerosine (DPK); I mean
those that have mini storage tanks. These retailers are often a source
of supply to majority of populace that fall within the poor and middle
class range; so they are constantly in demand for supplies. You can talk
to them face to face and see if you can cut a deal.
e. Advertise on mass media
If
you have got some money to spare, you can choose to advertise your
services on newspapers, magazines, or any other media that will connect
you to your targeted customers.
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