by Gardner Dudley
 
Deciding whether to keep or sell surplus and idle capital equipment has always been a challenge, and today’s tight oilfield equipment market, where lead times can range from months to years, makes the decision even more difficult. Worldwide demand for metals and other commodities has created shortages, which have driven prices to near record highs. The high demand for pipe and other equipment has created long lead times in procuring capital equipment. Vessels from fabrication
shops, which had lead times of 4-8 weeks only a couple years ago, now require lead times as long as 30 weeks. Engines and compression equipment currently can have lead times up to 1-1/2 years, and delivery on oilfield casing and tubing can be in excess of a year in some cases.
 
With such strong demand for surplus equipment, investment recovery professionals should find good value. However, properly marketing that equipment to the right buyers is critical to maximizing value.
 

A Strong Marketing Mix is Key to Success In the oilfield industry, we have found online auctions and private sales to be effective channels for selling surplus equipment, when combined with a marketing strategy that utilizes a broad mix of marketing tactics to reach the right buyers and connect them to the equipment they need. During tight equipment markets like the current one, it is easy to find people who need equipment, but the key is finding multiple buyers—then effectively putting those buyers in a dynamic bidding environment that will maximize value received.

 

A combination of four key marketing tactics can be effective in accessing and building the buyer market for online auctions and private sales:

  • Advertisements in trade publications and local newspapers
  • Communicating to an existing database through emails, faxes & direct mailer
  • An experienced Inside Sales team
  • And utilizing the Internet Print Media
Advertising in trade publications and local newspapers is a marketing technique that has traditionally been used in supporting and driving buyers to live auctions. The goal is to reach industry and equipment specific buyers through trade publications and to supplement that group with local buyers. The same concept applies to online auction sales as much of the equipment sold is industry specific – and while theauction is online and accessible by a worldwide market, some equipment is still better suited for local buyers due to the costs of transportation. These targeted advertising techniques can be cost effective if researched and reviewed appropriately.
 
Finding the right trade publications for an industry is sometimes a daunting task, as there are typically numerous options. It is often beneficial to take a survey that provides a better idea of which trade pubs the majority of the target audience is reading. Marketing to a targeted audience is always a great investment, so analyzing and reviewing the right trade pubs is essential. Regional advertising in the area where the equipment is located can yield great results, but finding the right city in that area is critical to generating optimum results.
 

Our experience has shown that the best return on investment is not newspapers in small towns or larger metropolitan cities, but that mid-size cities provide the best exposure for the money. By advertising in local newspapers, one is able to reach regional oilfield buyers as well as consumers who may be interested in purchasing trucks, old pipe for fences, scrap metal, and other items owned and sold by oilfield and industrial companies.

 

Direct Marketing
Marketing directly to a customer database through emails, faxes and brochures is another focused marketing effort that can generate good returns for a minimal investment. Having a qualified contact list provides the opportunity to reach a targeted group, and allows accurate measurement of the return on each campaign. Utilizing all three methods (direct mail, email, and faxes) helps cover your audience, regardless of their communication preference, and reaches that audience with multiple marketing pieces. Considering that some research indicates it often requires six (6) “touches” for people to see a marketing piece and remember a company name or message, developing diverse touch points is essential. While the fax machine is often thought of as an outdated marketing tool, some clients still prefer to receive faxes over electronic communication. For faxes and emails it is important to follow all current marketing guidelines and etiquette, such as having customers request faxes in writing, and continuing to update email lists to reflect any “unsubscribe” requests. This provides an important service in an unobtrusive manner.

 
The Inside Sales Team
An area of marketing that is often overlooked amidst today’s focus on mass communication is personal contact. Having an experienced inside sales team focused exclusively on finding buyers provides an important bridge from simply putting equipment in front of buyers and really providing a service through contact on a personal level. A well structured Inside Sales Team manages it’s time between research, data collection, and phone calls. Most of the focus is on contacting buyers directly, but prior to making phone calls the team should perform extensive research on companies via the web, trade publications and newsletters to ensure that calling efforts are focused and efficient.
 
Along with keeping in regular contact with buyers, it is important to collect accurate data on each potential buyer including what equipment categories are of interest to each buyer (i.e. valves, compressors, etc.). A robust Customer Relationship Management (CRM) system (software package) is essential for effective sales-support management of prospect and customer database information. Data captured in the CRM system provides a basis for more efficient tracking, prospecting and calling efforts. For example, the CRM may show that a buyer has not bought in several months, but his information indicates he is interested in buying compressors. As soon as a compressor is listed in an upcoming auction, the Inside Sales team will contact the buyer and inform him about the compressor. On rare occasions, a member of the Inside Sales team might go on location to walk a new buyer or a well-established buyer through a yard that has equipment for sale, providing an extra level of customer support and hands on expertise to the buyer. An effective inside sales team can help take a company’s customer database to the next level by building relationships and helping define and refine future marketing campaigns.
 

Get Online

A final and equally critical area of building a buyer market today is the Internet. Achieving effective internet presence requires focus in at least two key areas: Search Engine Optimization and Search Engine Advertising. Obviously, in today’s world, many equipment buyers turn first to their favorite search engine, and there are two ways to get in front of buyers. Pay-Per-Click advertisements have become a very popular method of advertising across all industries, and they can be especially useful for promoting equipment that falls outside the usual spectrum of equipment sold.
 
“Organic” search results are the natural ranking of where a website appears in the search engine list and this ranking can be improved by evaluating and optimizing your website for the keywords that are most important. In the equipment world, it is often a challenge to actively promote all equipment for sale since there can be such a wide range in equipment types and keywords. The key is to proactively review and analyze all equipment listed on the website to maximize exposure through both organic results and pay per click advertisements.
 
These marketing tools – and marketing in general – are only as effective as the adaptability of the team. It is important to continuously review and measure results to ensure that the marketing effort is cost effective. Whether the equipment market is up or down, staying on top of the changing marketing environment and proactively looking for ways to reach new customers is the best way to maximize ROI (Return on Investment) from equipment sales.
 
Reprinted from ASSET 2.0, the Investment Recovery Business Journal, Vol. 4, 2006

© The Investment Recovery Association