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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SynergieS Security is more of a mixed bag with diversification where core competencies and synergies are concerned. The ability to cross- purpose technicians and drivers is limited, but the back office customer management and customer service components are fully applicable. "In terms of infrastructure, many of the same skills you need in oil apply to security," said Cohen. "It's customer service; hiring, training and obtaining licensed technicians; getting them in a van; and getting them to the right place, at the right time, with the right tools and the right training. It's a trust business—consumers trust you to make oil deliveries on time and properly maintain their heating equipment, and it's the same with security. It's not like you are starting a whole new business. We already had the computer system, phone system and some trained customer service people so was simply a matter of hiring people with specific expertise." At the back office level, a customer is a customer to MCS. "The way we are set up, each customer can have multiple accounts," said Larsen. "They can have an oil account, a HVAC account, a security account or propane account. A lot of our customers have multiple accounts and we allow them to pay for their services within the custom monthly payment plans we offer. Even though we operate as separate companies, we allow this and we work together well to support all of our customers." One area not done in house is the monitoring. Economies of scale dictate that outside providers will be used for most security providers except for the very largest national security companies. Licensing issues, training requirements and personal career goals means that cross training existing technicians is typically not an option. "The licensing rules are pretty strict. We have access to custom- ers' accounts, phone numbers and passwords so the access to that is severely restricted," Larsen said. "Anyone who touches that has to have a FBI check and a fingerprint check and they have to be licensed. Therefore, we have dedicated technicians." However, that also helps ensure a high level of quality and service in the field, which is important to maintaining the all-important customer relationships. Fly-by-night might be acceptable for some business models, but it destroys the primary advantage heating fuel dealers have over so many other outside competitors. That specialization also applies to the unit's dedicated leader- ship and sales staff. "We had trouble finding the right people to run the business," said Larsen. "Finding people that can both sell and lead is difficult. There are lots of different models on selling. We chose to not be the company that runs out there and hires 10 salespeople in the hopes that one will hang on. We chose not to do that because we have a great respect for our customers and our employees." The CuSTomer As noted, one synergy is the customer base and what is often decades, perhaps many decades, of reputation and relationships. "One of the neat things is when somebody comes in and says 'I've been a customer of yours for 35 years'—that's a great level of trust and that's where we decided to start our marketing and we've been pretty successful at it," Larsen said. "We do a direct mail campaign and we offer a free security system if you sign up for a three-year or five-year monitoring agreement with us. In the home security field that is called RMR, or recurring monthly revenue, which is where the dollars are. The average is about $30 per month, which is a pretty good deal. However, we have to continually show our customers that we bring them value. Some people get a security system and use it diligently for six months, and then forget they www.fueloilnews.com | FUEL OIL NEWS | JULY 2014 29 BUSINESS OPERATIONS By Keith Reid David Cohen, executive vice-president, Standard Oil. Roy Friedman, president, Standard Oil (Standard Security Systems is a division of Standard Oil). Erik Turnquist, Standard Security Systems general manager