By Paul Nazzaro, Advanced Fuel Solutions, Inc.
At this year’s Eastern Energy Expo in Connecticut, I participated in a panel on “ULSD, Additives and Fuel Quality” for a few dozen professionals in the diesel fuel industry. At the same time, Marc Marchillo, a national sales trainer from Aprilaire/Research Products, was leading an HVAC marketing session entitled, “If Your Business Isn’t Unique or Different, You Had Better Be Cheap!” Although we were addressing two distinct audiences that day, I wish we could have merged our sessions together.
In the diesel fuel industry, the common misconception that every downstream supplier is selling the same product—extracted from the same oil fields, processed at the same refineries, and purchased as is from the same wholesalers—means that many consumers are making decisions based exclusively on price. While discount brands tend to embrace the “You Had Better Be Cheap” narrative, to regard fuel as a mere commodity, and to market it as such, is problematic for fuel dealers and detrimental to the industry as a whole.
For downstream diesel wholesalers and retailers—those selling directly to end users—there’s no denying that advertising low prices to a price-driven consumer base is an effective way to attract new customers. But it’s no way to retain them. A business that wins a customer on dollar-per-gallon today is the business that will lose a customer on dollar-per-gallon tomorrow. While price can be cardinal to a company’s brand identity, it does little to establish brand loyalty.
Brand loyalty is built upon differentiation. In the diesel fuel industry (to revisit my EEE presentation) differentiation is best achieved by raising the quality of your fuel. Most assume that because the diesel fuel they buy at the rack meets ASTM specifications, it’s of perfectly good quality. This is another common misconception. ASTM specs are simply minimum standards of fuel quality to ensure that the product leaving the refinery can be safely used for its intended purpose. ASTM makes sure the fuel works; it’s up to suppliers and dealers downstream to make sure it works to its maximum potential.
Fuel quality is compromised at every stage of the petroleum supply chain—from refining and transportation to storage and blending. Generic middle distillates are at high risk for several common deficiencies. Water and microbial contamination, particulate build-up, and wax formation are just a few of the usual suspects that degrade fuel quality, plug filters, corrode tank linings, and damage injector systems once introduced into a fuel system.
Today’s ultra-low-sulfur diesel has its own set of operability concerns. Because sulfur acts as a natural lubricant, ULSD is “dryer” than traditional diesel, meaning that it’s lower in lubricity, more prone to holding water, and more susceptible to microbial contamination. Salts that are commonly found in ULSD—some of which are intentionally added, others from contaminants—are less soluble in USLD, and can be abrasive to engine components and deadly to fuel injectors. The refining process used to remove sulfur also removes oxygen, nitrogen, and other functional elements, yielding a fuel that is less stable in storage. ULSD is also more solvent, or liable to loosen filter-plugging deposits in tanks.
Unfortunately, as many consumers purchase their fuel based on price, these are the issues that they’re regularly experiencing. At a time when the petroleum industry is fighting tooth and nail for market share and losing volume across the board, having a problemladen product represent a significant portion of the supply pool does little to help our cause.
Today’s fuel additive technology can eliminate fuel problems and optimize performance to create a premium product tailored to meet the needs of customers. Cold flow additives prevent fuel gelling to keep diesel engines and heating systems running smoothly through the winter. Detergents keep tanks and injector systems clean. Combustion catalysts increase fuel efficiency and decrease emissions. Corrosion inhibitors protect tank linings. Biocides control microbial contamination. Water control treatments prevent fuel degradation and other water-related issues. Biodiesel (though not an additive) is a cleaner burning, renewable fuel that can be blended with traditional diesel at rates that beat natural gas on environmental benefits. This is the kind of information that fuel dealers should be sharing with their customers. For a few cents more per gallon, they can have a far cleaner, more efficient, and higher performing product that will quickly pay for itself in the form of fewer service calls and less down time.
Offering a premium fuel can only serve as a differentiator if consumers are educated on the subject. Raising consumer awareness via website, social media, marketing brochures, traditional advertising, customer newsletters, and through personal interaction are all good ways to market fuel quality. But the most effective marketing strategy is to provide evidence that the enhanced fuel actually works. Showing customers their fuel filters, tracking efficiency measures, and recording drops in maintenance issues goes a long way towards debunking the tired “oil is oil” narrative, strengthening your value proposition, and building loyalty not only to your brand, but to our industry.
Advanced Fuel Solutions, Inc (AFS), based in North Andover, Mass., provides fuel quality consulting services and fuel additives designed to keep fleets on the road profitably. For general housekeeping tips and services, or for specific consultation regarding the detection, removal, or prevention of water and microbial contamination (or any other fuel quality issue), contact Advanced Fuel Solutions (www.yourfuelsolution.com) at 978-258-8360 or firstname.lastname@example.org.