By Nick Quaratiello
Blue Cow Software
“You can’t tell where you are going unless you know where you have been.”
The source of this quote has been lost to time, but the advice remains as appropriate as ever. In order to create a workable plan for the future of your fuel oil or propane business, you must first have a firm grasp on the past. That has been true since the inception of our industry. But the accuracy and ease with which we can look back at historical trends has been made infinitely simpler with the advent of computer-based analytics.
Simply put, when properly and consistently used, analytics can paint a clear picture of the “path” a business has followed. Literally any statistic that has been recorded and categorized can be accessed and assessed for the impact it may hold on future events.
Today’s analytics are made more accurate and easier to access because they can be tied directly into your company’s management database. There is no need for painstaking assembly of data from disparate sources. The more effective analytics tools allow you to define your own parameters for measurement, or you can use a pre-set reporting template to review some of the more commonly used analytical queries.
Just as important as the quality of the data you examine is the timeliness of the reporting. The energy world is moving faster than ever, and decisions often need to be made quickly. The more information you have at your fingertips, the better your decisions will be.
Here are some of the measurements that a typical energy retailer might take advantage of through analytics – and why they are so important:
- K factor comparison – K factor calculations should not be a guessing game. A look back at K factor performance from previous years will give you actual results on which to base your calculations for the upcoming heating season.
- Delivery address concentrations – Improving delivery routing efficiency is a proven way to save money by lowering payroll and reducing vehicle wear and tear. When combined with a sales report, an analytical review of where your customers are clustered can provide a map – literally! – of the best ways to concentrate deliveries.
- “Top 10” customers – Have you ever wished for more customers who pay on time, utilize a wide range of your services, and are loyal to your business? The best way to get more of these “golden” customers is to find out what they have in common. Use analytics to discover patterns and trends that identify top performing customers based on your own criteria, then seek out similar prospects to add to your customer list.
- “Bottom 10” customers – Conversely, you can use analytics to identify the customers you would prefer not to hold onto. Look for a pattern of repeated service call backs, delinquent payments, run outs, and other “bad behaviors” that can signal a troubled account. Then use the information to be more alert for these patterns in other customers.
- Service call patterns – Look far enough back into your company’s history and you can discern important trends in your service department. Keeping track of aging equipment in your customers’ homes presents the opportunity to preemptively sell them a replacement or upgrade ahead of the projected “end of service life” for a boiler, furnace or air conditioning system.
These are just a few of the ways in which operational and financial analytics can help run a more efficient and effective company. Which can lead to achieving the twin goals of streamlined operations and improved profitability.
You can learn more about Blue Cow Software’s Ignite® Analytics tools by clicking here. Or schedule a demo by calling us at (888) 499-2583.