There have been two massive shifts that have impacted the crude oil and natural gas industry.
- The rising demand for clean energy supply.
- The transition to an entirely digital world.
Interestingly, it is the second point that is helping to accelerate the first.
Thanks to new tools, such as AI and customer relationship management (CRM) software, many of these companies are better equipped to respond to changes in the energy supply and rebrand to meet changing demands.
While marketers have occupied a unique position within the hydrocarbon supply chain, the role of marketing communications has never been more important for companies looking to evolve in this sector.
In this article, we’ll explore the role that marketers have historically played in the oil and natural gas industry and how they will help shape the future of energy production as energy companies look to diversify their portfolios and rebrand their businesses.
Understanding The Oil And Gas Business Model
The hydrocarbon business model is traditionally divided into three parts:
- Upstream: Otherwise known as E&P (exploration and production) companies, these businesses are responsible for extracting crude oil and natural gas from the ground.
- Midstream: These businesses are responsible for transporting raw materials to refineries, where they can be made into their final form for sale.
- Downstream: These businesses consist of refineries and gas stations (crude oil) or residential/commercial distributors (natural gas) responsible for delivering hydrocarbons to their final customers.
It’s important to note that oil and natural gas companies rely on a diverse mix of end-stage customers to market their products to, including regional supplies (most prominent in heavily regulated states), individual refineries, distributors, and gas stations.
Before we explore the marketer’s role in this complex supply chain, I think it’s important to understand how external factors can impact the sale of hydrocarbon products and their supply chains.
Factors That Influence Hydrocarbon Markets
Location
Unlike crude oil, natural gas markets are highly regionalized, and the location of energy sources matters immensely when it comes to transporting (added cost) these materials and finding customers.
Similarly, crude oil typically flows to the nearest market because that is the one that tends to provide the highest value.
For marketers, factoring in these inputs is important when determining the best customers to reach with your messaging.
Pricing
Similarly, pricing has a massive impact on the return on investment (ROI) of any marketing strategy, whose profit is often measured on a margin-by-barrel basis.
There are also fundamental differences in spot vs. wholesale pricing, which influences the ROI of a sale.
Financial Markets
For the most part, we are only concerned with buying and selling physical hydrocarbon products.
However, it’s important to note that natural gas and crude oil trading over financial markets greatly influences the price of these products and their supply.
Cyclicality
The global interconnectedness of many energy products – which can be influenced by various inputs, such as war, bad weather, and OPEC (Organization of the Petroleum Exporting Countries) – makes the price and supply of hydrocarbons extremely volatile.
End-Stage Customer
Finally, the business model of the company you are marketing for greatly influences its strategy.
For example, some downstream refineries are solely invested in commercial sales to factories and power plants, while others are connected to a regional network of gas stations that rely on them for 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 bolstering existing supplier networks and assisting in the digital transformation of these companies through the fourth industrial revolution.
As a middleman in a complex supply chain, marketers can offer lots of supporting roles to oil and natural gas companies, including:
- Sales and B2B Marketing: Finding new clients to support local cash flows to the business.
- Reputation Management: Helping energy companies rebrand for the future and increase their loyalty among distributors and individual consumers.
- Hiring: Promoting businesses to prospective employees who can help support and advance that business.
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-stage customers.
Marketers can use various strategies – which I will discuss in much more detail beneath – to foster the continuous growth and digital transformation of these companies, including:
- Ongoing customer relationship management.
- Omnichannel marketing.
- Developing automation via chatbots, IoT, drip campaigns, etc.
- Writing press releases and content that supports thought leadership.
- Engaging with consumers on social media.
- Developing VR and AR products for marketing.
- Marketing companies at trade shows and exhibitions.
- Creating loyalty programs for clients.
In turn, marketers can help manage brand reputation as these companies diversify their portfolios and go from a fossil fuel-first business model to one that reflects the growing needs and interests of consumers.
I should note that CRM and SaaS solutions are also critical in helping marketers manage relationships with clients and prospective customers across localized regions.
Furthermore, analytics software is also instrumental in this process and can be used to track various marketing key performance indicators (KPIs) that help determine any campaign’s profitability.
In sum, you’ll find that many of the functions of an oil and natural gas marketer mirror that of any B2B enterprise – although this varies a bit between companies.
Differences Between Oil And Natural Gas Marketing
Oil and natural gas companies do have slightly different service models.
For example, natural gas end-stage customers are typically energy distributors – such as your state or local supplier – which then supply the finished product to homes and businesses.
Another key difference between these two verticals is that natural gas markets tend to be more influenced by regionalized factors than crude oil companies tied to global markets.
With that said, let’s explore some of the primary marketing strategies that oil and gas companies can use to expand their brand and increase their growth.
Oil And Natural Gas Marketing Strategies
1. Online SEO And PPC
Online SEO and marketing strategies allow natural gas and crude oil companies to expand their digital footprint and reach more clients through alternative marketing channels.
While keywords, such as “natural gas companies in texas,” may have low volume (320), the ROI of capitalizing on that term with 1 to 2 new regional clients can greatly increase that company’s regional cash flow.
Likewise, all hydrocarbon companies transitioning to alternative energy sources can create informative content around solar, wind, or renewable energy to educate potential clients and create authority around their brand.
If you are struggling to acquire organic real estate for targeted searches, I highly recommend bidding on relevant keywords over Google Ads. In my opinion, online advertising is especially useful for B2B companies with limited engagement channels.
2. Email Marketing
Follow up 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 engage leads across their conversion path will help companies land more sales and keep them in mind the next time a distributor or refinery wants to switch suppliers.
3. Traditional Advertising
Traditional advertising is a good way to increase brand awareness, especially for companies looking to rebrand.
While it might not make sense for smaller companies, larger oil and natural gas companies can benefit from the reach that traditional ads over TV and radio provide.
4. Reputation Management
Reputation management is critical for an industry historically in hot water with much of the public. Press releases, social media engagement, and ad campaigns are all great ways to help companies rebrand a more holistic energy company.
Similarly, I recommend leaning into the service angle of your offerings by promoting your reliability and consistency to local distributors and refineries.
As the cost of switching suppliers remains high, you want potential clients to be assured that you can provide them with a reliable supply so they don’t lose out on potential profits.
5. Trade Shows And Exhibitions
Trade shows and exhibitions are really popular among the energy industry for brokers, suppliers, and distributors.
Consider setting up a booth and attending trade shows to network with potential clients you couldn’t reach on ordinary channels.
These events also allow you to rebrand your business and present new service offerings to clients.
6. Omnichannel Marketing
Finally, I would just like to wrap up by mentioning that an omnichannel approach that utilizes all of the marketing channels listed above will help energy companies achieve the best success in their growth.
Between the reach of digital and traditional channels and the ability to engage with customers via email and social media, utilizing a multichannel approach will ensure that your business is constantly pulling in new leads and converting the ones you do have.
In Conclusion
Oil and natural gas marketing requires special considerations based on the volatility of the industry and its heterogeneous customer base.
Nevertheless, many of the strategies we recommend to most B2B businesses will help in undergoing a digital and brand transformation into a cutting-edge energy company of the future.
More resources:
- Enterprise SEO Reporting: Tips For Developing Effective Dashboards
- Local B2B SEO: The Complete Guide For Local Businesses
- SEO Strategy: A Full Year Blueprint (+Template)
Featured Image: yut_art/Shutterstock
