Selling Innovation to the Oilfield in Three Easy Steps

You have the right technology, with the right price.  The product that will help oilfield customers produce more and reduce cost.  The rest is easy… Just let customers know what your product can do, and they will beat a path to your door, as they say.  All that’s left is deciding which luxury vehicle you’ll be driving next month.

Right?  Not exactly…

In reality, the journey to bringing new technology into the oil patch is ridiculously difficult and time consuming.  As much as the industry says it needs new ideas, promising new innovations routinely fail to gain market traction.

But, why?

Well, one big reason is that nobody ever got fired for buying the most comfortable technology of the past, and there’s something to be said for risk-avoidance in managing one’s own career.  As a result, the proverbial “easy button” will deliver safe products from trusted brands, including engines from Caterpillar, artificial lift solutions from Lufkin, gas compressors from Ariel, and transmissions from ZF.

How can the hapless new-idea entrepreneur succeed in such a challenging environment?

The path to selling oilfield technology is remarkably similar to selling any other product. This is because the new product needs to stand on its own merits.  The product or service won’t be received more favorably just because it’s new.  To the contrary, it will be more skeptically received just because it’s new, as new risks are being accepted with any innovation.  In any case, though, there’s a three-step path to placing products like this in the market.

As it relates to the largest producers, especially in the US oil patch, the insightful salesman thinks of each customer as three independent entities.

  1. Corporate office
  2. District office
  3. Field office

Just like any other customer, each has their own motivations, value perceptions, and sales cycles.  How to sell to each?

Step 1:  Sell to the deep carpet

The “deep carpet” sale is at the corporation’s headquarters, and this is usually the first step.  This is important, because the ultimate budgetary and expenditure approvals are made here.  The company’s annual plan is set in these offices, often high in the sky, lining the Houston skyline.  Without approval from these offices, dollars can’t be allocated to any new projects.

Of the three steps, this one is usually the easiest.  The group of people wanting to drive innovation live here.  Things like efficiency and emissions are important to them, and they are often less-well equipped to critically evaluate new technology, as they are at least one step removed from organizational operations.

Titles that live here.

Vice presidents; directors; technology executives

What do they think about when they wake up in the morning?

Of the three offices, this group is the most focused outwardly.  That is, they interface with investors and the public, and are interested in shaping their corporation’s perception in the marketplace.  In addition, they shape the culture of their organization.

What do they crave?

Value sales work better in the deep carpet offices than anywhere else.  The buyers in these offices have the broadest perspective and span of control, so they are most able to capture revenue enhancements or savings by making big decisions than anyone else.  Further, environmental benefits are high on the priority list for folks at this level.  Focusing on those areas will be well received.

What can go wrong.

A complex value proposition that’s difficult to understand or isn’t readily intuitive won’t get attention, and the whole sales process can be stopped in its tracks right here.  An elegant, polished, and professional presentation is the price of admission.

Step 2:  Sell the regional office

Folks at the regional office are geographically much closer to the actual production assets.  They are responsible for coordinating efforts between service providers (contractors), while managing employees who are ensuring productive assets are performing at their peak.

It’s also their job to execute the projects that are approved by the corporate office.

Titles that live here.

Production engineer; project manager; program manager

What do they think about when they wake up in the morning?

Importantly, folks in the regional office don’t wake up thinking about technology deployment or innovation.   Instead, they’re explicitly tasked with maximizing today’s production at the lowest cost possible.  There are dozens of different types of problems that interfere with these primary goals, including scheduling conflicts, weather, equipment failures, and uncooperative landowners.  The folks that live this life are great, pragmatic problem-solvers that think on their feet.

What do they crave?

Simple solutions to everyday problems.  Because they already have a schedule filled with problems that need to be solved, more than anything, they don’t want more problems!  Reliability and predictability of operations is key.  Further, they’re under constant pressure to manage cost, so cheaper is better.  Finally, they need to know that their supplier will back up their products when things go wrong (and things often go wrong).  Relationship-building is important.

What can go wrong.

Trusted relationships are important to nurture between the supplier and the regional office personnel.  Without this, small problems can quickly escalate into big problems, which can then leak back to the deep carpet offices, which spells even more trouble.

Step 3:  Sell the field personnel

Titles that live here.

Field supervisor; pumper; operator.

What do they think about when they wake up in the morning?

Consistently at top of mind is how to keep equipment running to maximize production.  On bad days, their jobs resemble a miles-wide “whac-a-mole,” running from well to well to address problems including unreliable equipment, unpredictable well production, and uncooperative wildlife.

What do they crave?

Similar to the regional office personnel, the field personnel are looking for equipment that’s reliable.  Because everything will eventually break, though, they also need it to be easy and intuitive to repair in the field.  The service event will almost always take place in the elements, whether it be raining, hot, or cold, the field service technician needs components to be accessible, replacement parts to be readily available, and equipment to be easy to understand.

What can go wrong.

After a sales cycle is over, and the commissioning is complete, unfamiliar equipment can still be met with strong resistance, even if that equipment is cheaper, more efficient, and more reliable.  Changes to what’s known are often resisted, in favor of the predictability of problems with existing products.  By definition, new equipment will come with new problems that will require new skills to address, for which the field technician may lack confidence in solving. To combat this, lots of attention and support needs to be provided to the field service folks after the sale is complete, because they can strongly influence the next sale.

Of course, it’s important to note that historical resistance to innovation is shifting in today’s market, as companies better align their technology investment and deployment with their operations.  Completing a transition to seamlessly bring new technology to production will take a while, though, so until then… remember these three easy steps.

Jeff Martini is an occasional blogger and full-time finance executive.  You can read as much as you care to know about him on his LinkedIn page here.

One thought on “Selling Innovation to the Oilfield in Three Easy Steps

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  1. After 15 years selling to the oilfield, I say Jeff’s insights are spot on. Any one of these three groups can assure failure of a new product unless specific attention is paid to their needs.

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