The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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B U S I N E S S O P E R AT I O N S no revenue and no profit, then that driver's productivity plunges, Levins pointed out. Even in a full day of delivering, the bulk of the driver's time is necessarily spent driving, Levins said. "The greatest expense is getting to the tank," Levins said. "When is the driver making money for you? When he's pumping 65 gallons per minute. Everything else is expense." The Web-based Brite system focuses on three factors – gallons per stop, miles per stop and stops per hour – to help fuel oil dealers focus on those pumping, money-making minutes. Maximizing stops per hour is largely a function of efficient routing, but being attuned to a customer's consumption rate can help too, Levins said. For example, if a delivery is being made at one location and next door is another contract customer, Levins suggests delivering there as well, provided it's known that the tank next door is low enough to receive, say, 140 gallons. The rationale being, Levins said, that the cost of delivery has already been incurred. Even though fuel oil is a transaction-based business, reducing the number of transactions and making each transaction count more can drive down costs and protect margin, Levins said. An excess calls report that the Web-based system generates can help fuel oil dealers delete such calls, Levins said. It identifies contract customers with multiple calls during the heating season. If a customer has a $300 service contract, which includes one cleaning or preventive maintenance call that costs approximately $140, "you only have room for one more service call before all the revenue from that service contract is gone," Levins noted. The cost of each additional call after that has to be covered from fuel oil revenue, which eats at margins, Levins said. Fuel oil dealers should focus on the revenue or costs generated by each customer, Levins said. "An individual customer is your source of revenue and your source of costs," he Mark Stillman Joins Energy Edge Energy Edge, LLC announced today that Mark Stillman has joined as Senior Partner to solidify the management team for the fast growing company. Mark co-founded Energy Edge in 2009 but has only participated as an advisor to date. In his new role, Mark will be responsible for overseeing corporate initiatives, business advisory services, and the management of the software division. Mark brings 20 years of energy industry experience to the position with specific expertise in management consulting and technology solutions. Prior to joining Energy Edge, Mark served as COO for Hedge Solutions, Inc. In addition, he has held management positions with tech providers ADD Systems and Vertrax as well as pure operational roles with HOP Energy and Suburban Propane. Mark holds a BS in Applied Economics from The University of CT. Mark Stillman, Senior Partner Energy Edge, LLC mstillman@energyedgeus.com 401-741-2470 22 AUGUST 2013 | FUEL OIL NEWS | www.fueloilnews.com said. A fuel oil dealer can make approximately $400 to $600 on a customer who is paying full margin, on a full-service contract, requiring one cleaning call in the season, Levins said. "That's a good-performing customer – and most customers are that way," he said. About one-fifth are not that way, and they deserve special attention. Levins said that the Brite system's excess calls report can be run at the end of the service season, typically the end of February or early March, to identify the worst transgressors from the just-ended season. Brief the technicians on those customers and instruct them to take a bit of extra time to address the issues that prompted the extra calls. New parts or a new unit may be necessary. There may be a need for a visit by a supervisor or a salesman, Levins noted. The extra effort is worth it, he said, because "if you choose to renew, you're going to have the customer for the next twelve months" – and that customer needs to be converted into a revenue generator. l F O N