There have been two massive shifts that have impacted the crude oil and natural gas industry.
- The increasing demand for clean energy supply.
- The transition to a fully digital world.
Interestingly, it is the second point that helps speed up the first.
Thanks to new tools like AI and customer relationship management (CRM) software, many of these companies are better equipped to respond to changes in energy supplies and adapt to changing demands.
While marketers occupy a unique position within the hydrocarbon supply chain, the role of marketing communications has never been more important for companies looking to advance in this sector.
In this article, we examine the role marketers have historically played in the oil and natural gas industry and how they will help shape the future of power generation as energy companies seek to diversify their portfolios and rebrand their businesses.
Understand the oil and gas business model
The hydrocarbon business model is traditionally divided into three parts:
- Upstream: Also known as E&P (Exploration and Production) companies, these companies are responsible for extracting crude oil and natural gas from the ground.
- center current: These companies are responsible for transporting raw materials to refineries where they can be processed into their final sale form.
- Downstream: These companies consist of refineries and service stations (crude oil) or private/commercial distributors (natural gas) that are responsible for supplying hydrocarbons to their end customers.
It’s important to note that oil and natural gas companies rely on a diverse mix of end customers to market their products to, including regional shipments (most prominent in highly regulated states), individual refiners, dealers, and service stations.
Before we examine the marketer’s role in this complex supply chain, I think it’s important to understand how external factors can affect the sale of hydrocarbon products and their supply chains.
Factors influencing the hydrocarbon markets
Location
Unlike crude oil, natural gas markets are highly regionalized and the location of energy sources is immensely important when it comes to transporting these materials (additional costs) and finding customers.
Similarly, Crude Oil usually flows to the nearest market as that tends to offer the highest value.
It’s important for marketers to consider these inputs when identifying the best customers to reach with their message.
pricing
Similarly, pricing has a massive impact on the return on investment (ROI) of any marketing strategy, which is often measured on a margin-by-barrel basis.
There are also fundamental differences between spot and wholesale prices that affect the ROI of a sale.
financial markets
For the most part, we only deal with the buying and selling of physical hydrocarbon products.
However, it is important to note that trading natural gas and crude oil through the financial markets greatly affects the price of these products and their supply.
cyclicality
The global interconnectedness of many energy products – which can be affected by various influences such as war, inclement weather and OPEC (Organization of Petroleum Exporting Countries) – makes the price and supply of hydrocarbons extremely volatile.
End Stage Customer
After all, the business model of the company you are promoting has a big impact on their strategy.
For example, some downstream refineries are invested solely in commercial sales to factories and power plants, while others are connected to a regional network of service stations that rely on their supply.
The role of oil and natural gas marketers
Oil and natural gas marketers – whether hired in-house or as an agency – play an important role in strengthening existing supplier networks and helping these companies digitally transform through the fourth industrial revolution.
As a middleman in a complex supply chain, marketers can offer many supporting roles to oil and natural gas companies, including:
- Sales and B2B Marketing: Finding new customers to support local cash flows for the business.
- reputation management: Helping energy companies rebrand for the future and increase their loyalty with merchants and individual consumers.
- Attitude: Promoting companies to prospective employees who can help support and advance that company.
Ultimately, the primary role of marketers in the hydrocarbon supply chain is to ensure the sale and transportation of hydrocarbon products to their respective end customers.
Marketers can employ a variety of strategies — which I will discuss in more detail below — to fuel the continued growth and digital transformation of these businesses, including:
- Ongoing customer relationship management.
- omnichannel marketing.
- Development of automation via chatbots, IoT, drip campaigns, etc.
- Writing press releases and content that supports thought leadership.
- Interacting with Consumers on Social Media.
- Development of VR and AR products for marketing.
- Marketing company at fairs and exhibitions.
- Creation of loyalty programs for customers.
In turn, marketers can help manage brand reputation as these companies diversify their portfolios and shift from a fossil-fuel-centric business model to one that reflects growing consumer needs and interests.
I should note that CRM and SaaS solutions are also crucial in helping marketers manage relationships with customers and prospects in localized regions.
Additionally, analytics software is also vital in this process and can be used to track various marketing key performance indicators (KPIs) that help determine the profitability of each campaign.
In summary, you’ll find that many of the functions of an oil and natural gas marketer mirror those of a B2B company – although this varies somewhat from company to company.
Differences between oil and natural gas marketing
Oil and natural gas companies have slightly different service models.
For example, natural gas end customers are typically energy suppliers – like your state or local utility – who then ship the finished product to homes and businesses.
Another key difference between these two industries is that natural gas markets tend to be more influenced by regionalized factors than crude oil companies that are tied to global markets.
With that in mind, let’s examine some of the top marketing strategies oil and gas companies can employ to expand their brand and drive growth.
Marketing strategies for oil and natural gas
1. Online SEO and PPC
Online SEO and marketing strategies enable natural gas and oil companies to expand their digital presence and reach more customers through alternative marketing channels.
While keywords like “Texas natural gas company” may have low volume (320), the ROI of using this term with 1-2 new regional customers can significantly increase that company’s regional cash flow.
Likewise, any hydrocarbon company transitioning to alternative energy sources can create educational content about solar, wind, or renewable energy to educate potential customers and create authority for their brand.
If you’re struggling to acquire organic real estate for targeted searches, I highly recommend bidding on relevant keywords through Google Ads. In my opinion, online advertising is particularly useful for B2B companies with limited interaction channels.
2. Email Marketing
Pursue a lead outreach strategy with an automated email marketing strategy using any leading CRM or email marketing software.
Creating efficient lead funnels that nurture and retain leads on their conversion path helps businesses drive more sales and keeps them in mind the next time a distributor or refiner decides to switch suppliers.
3. Traditional advertising
Traditional advertising is a great way to increase brand awareness, especially for companies looking to rebrand.
While it may not make sense for smaller companies, larger oil and natural gas companies can benefit from the reach traditional advertising offers over television and radio.
4. Reputation Management
Reputation management is critical for an industry that has historically been in hot water with much of the public. Press releases, social media engagement, and advertising campaigns are great ways to help companies rebrand as a more holistic energy company.
Similarly, I recommend focusing on the service angle of your offerings by promoting your reliability and consistency with local dealers and refiners.
With the cost of switching providers remaining high, you want potential customers to be confident that you can provide them with reliable supply so they don’t miss out on potential profits.
5. Fairs and exhibitions
Trade shows and exhibitions are very popular in the energy industry with brokers, suppliers and traders.
Consider setting up a booth and attending trade shows to connect with potential customers you couldn’t reach through regular channels.
These events also allow you to rebrand your business and introduce customers to new service offerings.
6. Omnichannel Marketing
Finally, I would like to mention that an omnichannel approach that leverages all of the marketing channels listed above will help energy companies achieve the greatest success in their growth.
Between the reach of digital and traditional channels, and the ability to engage with customers via email and social media, using a multichannel approach ensures your business is constantly attracting new leads and converting the existing ones.
Finally
Marketing oil and natural gas requires special consideration due to the volatility of the industry and its diverse customer base.
Still, many of the strategies we recommend for most B2B companies will help them undergo a digital and brand transformation into an innovative energy company of the future.
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