What would you say if I told you the oilfield service and manufacturing industry was on the verge of an upswing?
Has your oilfield business positioned itself to capture market share during the coming rebound?
The downturn in the oil and gas industry has been tough for a lot of oilfield businesses, and the pain has trickled down from the top. Operators have cut back on their number of projects and flexed their muscles to get the price of oilfield services and equipment down, putting a strain on the companies that provide those services and equipment.
However unfairly, oilfield service companies have been viewed as commodities during this downturn; they're forced to compete on price alone.
The Approaching Rebound
As things start to recover on the upstream side of the industry, operating companies are becoming more risk tolerant and increasing the number of projects in their portfolios. This increase in activity on the operator side is having a knock-on effect for the service companies and manufacturers supplying those operations.
An increase in service company utility will create greater scarcity in the market. Analysts say that once oilfield supply companies get to around 85% capacity, they will get back some of their bargaining power, and start to claw back that 60% of lost revenue that has crippled them during the downturn.
Taking that a step further, rising prices for oilfield products and services will likely bring new (or dormant) oilfield businesses back to the market, which will increase competition.
Standing Out from the Crowd
As the upstream market starts to rebound, what is your strategy for capturing market share from your competition?
Can you confidently say you and your subject matter experts are THE go-to solution for your sector of the market?
I have heard the same story from several oilfield businesses; their existing pool of customers has shrunk, forcing them to explore new avenues for generating qualified leads. What are you doing to stand out from the crowd? Are you putting out valuable content on your website? Are you effectively communicating with your target market in the places they go for answers to their problems? (Yes, this includes digitally.)
“How are you standing out in your sector?”
If your answer to the underlying problem is just hitting the streets and reaching out to your existing customer base, then you're doing the same thing as 99% of your competition. How are you actually standing out in your sector?
Capturing Market Share
If it hasn't been clear up to this point, you need to do what your competition isn't doing. You need to be where your potential customers are, offering solutions to their challenges and answers to their questions.
Start producing content! Become the trusted advisor to your market. Before you have your first in-person meeting or get an inquiry about your product or service, your market should have received value from you and your company.
Think about the power of solving your potential client's problem before they have the chance to ask. You will more than makeup for any lost revenue on the front end by providing supplementary services on the back end.
Your goal during the rebound should be capturing market share first, and maximizing revenue at some point after you gain traction in the marketplace.
The Long Play
Building the profile of a thought leader or industry expert takes time. Building a portfolio of useful content positions your company above your competition in the minds of your prospects. It builds confidence that you will handle their problems effectively.
If you're in a sector of the market with well established heavy hitters, you can make huge amounts of progress by doing what they are not doing. I have seen several small players outperform larger competitors in certain niche services, all because the smaller, more nimble company understands how to provide value first and monetize later.
The approaching rebound in the upstream sector will create opportunity for the businesses that understand the new strategies behind developing qualified leads. If your organization is set on doing business the way it has always been done, don't be surprised if you start to lose market share to competitors that adapt to changing business practices.
The oil and gas industry will never be a business where deals are closed online, but developing a lead-generating strategy that incorporates digital marketing with traditional sales tactics is the way oilfield businesses will capture market share and survive in a boom or a bust.