Thinking of adding a new service to your lineup? Find out how to sell the idea to customers.
New technologies continually evolve to make oilfield services more efficient. The biggest challenge for an entrepreneur who starts a business that provides a new service is selling the idea to companies accustomed to doing something the traditional way.
That was the case when Mike and Kelly Clark left careers in other fields to start H2X, a hydroexcavation business based in Texas. At the time, the concept of digging with pressurized water and vacuuming out the slurry was a new idea in the United States. But the brothers knew that hydroexcavation had boomed in Canada and had great potential.
“When we first got started in 2001-2002, we weren’t just selling our business, we had to sell the industry,” Kelly Clark explains. “I put 100,000 miles on my pickup in a year, and it was boots on the ground.”
The work paid off; currently H2X has 70 employees.
There were several factors that played into that success, and Clark offers a few suggestions for businesses trying to sell new services.
- Educate yourself. Clark met with the owner of a Canadian hydroexcavation business and learned everything he could. That included how the work was done as well as various applications and markets it could serve. For hydroexcavation that includes oilfield work as well as private and municipal construction. Non-competitors are generally willing to share information, Clark says.
- Make person-to-person contact. Those 100,000 miles were (and still are) necessary, Clark says, to meet face to face with potential clients. Thirteen years ago, it was more difficult to know where different projects were located, so he drove around and stopped at the sites he found. To save some miles, he notes that now lists can be purchased from Industrial Info Resources and Reed Construction Data.
- Pictures are worth 1,000 words. “If you put in the right photos, it gets their attention,” Clark says. Create a quality brochure with good photos to show exactly what your service accomplishes. If you don’t have the skills, pay someone who does. The Clarks had experience to design their own and have gotten better at it over the years. Now they customize brochures and greeting card size literature in a short time to zero in on a client’s specific needs.
- Offer a free demo. Clark offered two hours of free work, and then the company could send him packing or pay him and keep him working. While the higher per hour cost of hydroexcavation (about four times backhoe rates) initially scared some clients, his goal was to show that it is 10 times faster than hand digging and is cheaper (and with less risk for liability) than the wages paid to the laborers.
- Name drop for credibility. Fortunately for the Clarks, BP was their first client, thanks to a new policy that required hydroexcavation for any excavation deeper than 4 inches near its facilities. Dropping the name of a blue chip customer like BP is a good addition to any sales pitch.
- Pizza and PowerPoint. Clark still drives 70,000-100,000 miles a year. Now that companies are more familiar with hydroexcavating, he focuses on what H2X can provide during lunches with decision makers. While they eat pizza, he shares his company’s past projects and available services with a PowerPoint presentation.
- Don’t get ahead of yourself. You may know you have the hottest new service since fracking opened up vast opportunities in the oil industry. But don’t go out and borrow a lot of money to buy too many trucks and pieces of equipment. “Build your business slowly and methodically,” Clark says. “And expect to put miles on your truck.”
To learn more about the Clarks’ success, visit www.gomcmag.com/editorial/2014/02/making_true_believers.