This US SMB company provides engineering & metal fabrication based services in the oil & gas (upstream and downstream), heavy construction, utilities and metal fabrication manufacturing. Each division operated independently focused on its own customer base with little or no integration with other divisions.
The down market in the US petroleum industry affected all areas of the upstream, downstream, and metal fabrication markets making it difficult to maintain operations and revenue. The existing company clients began to reduce projects in order to conserve cash in year 1. The company’s CAC (Customer Acquisition Costs) increased dramatically with little new revenue to show for its efforts. Its LTV (Lifetime Value of Customers) was also decreasing and a new strategy was needed for year 2 to maintain revenue goals and enhance customer engagement set for the year. The focus was to address:
- Marketing Strategy
- Product Diversification
- Customer Engagement
Marketing research determined the customer base was consolidating its budget across multiple services and looking for ways to not only reduce vendors but also decrease operational expenditures . It was necessary to understand each customers new needs and the changes taking place. Meetings were set up with each customer to better understand how the company could improve its services and meet its customers new needs.
Recommended Marketing Strategy
Based on market research, customer feedback and resources, iLLUMULUS recommended focusing only on its existing customer base by providing additional complementary services to its primary services already offered. The goal was to create more value for their existing customers through more robust, integrated, end to end services. Efforts were reduced to bring on new customers as costs increased to acquire new opportunities in an already slow market.
iLLUMULUS worked with the company product teams to examine and integrate their existing services across all four divisions. Before many services within each division operated separately. The goal was to determine how could the company meet the new needs of their customer base with all the resources available. Little investment was needed to allocate additional resources as most was already available in-house.
For example, one client in the oil field services only required upstream services (well head installation) but through further discussions , the company realized it was possible to also offer heavy construction (plant locations), utilities (drilling facilities set up) and metal fabrication services (maintenance upgrades) to address their complete needs, this also included additional services such as logistics, storage and maintenance. This benefited the customer allowing them to reduce overhead to maintain its vendor list, gain additional resources under one vendor, reduce costs through single sourcing and receive volume discounting.
By better understanding our customer’s new needs, we were able to give them more options and help them solve their problems, especially in a down market. – General Manager Ray T.
It was necessary to communicate the new integrated services provided by the company to show transparency and enhance trust within its existing customer base. iLLUMULUS positioned the company as a one stop solution for its customers. It was necessary to update marketing materials, offer in-house training, digital updates and new services to its existing customer base. While the focus was to increase current customer revenue, a new approach to business development was created to better qualify new opportunities.
Through iLLUMULUS initial efforts to understand the company’s customers, iLLUMULUS started the new customer engagement process. Quarterly reviews were established to examine any changes in customers needs or the value of the service offered to them. Account managers were also assigned to each client based on services instead of territory. An online portal was created for customers to access records of service, project status, timelines, payments, contracts, etc. This gave customers more control over their data and reduced the amount of time account managers needed to spend retrieving data.
At the end of the year, the company was able to not only meet but exceed its revenue goals by 58% through its new marketing strategy. The integration of services and decrease in CAC (client acquisition costs) reduced operational costs by more than 23%. By focusing on its loyal customers, it was able to enhance the relationship, offer additional services and become their one stop solution in a down market.