Much-needed infrastructure spending being injected into the economy is expected to keep demand high over the next 5 years for drilling fluids sold into the construction market. Drilling contractors rely on local distributors for accurate stocking levels as well as technical support on drilling fluids. The drilling fluid manufacturer partners with the distributor and the contractor to provide this support system. Today, more than ever, contractors have an increased need to easily access all the new drilling fluid technologies available.
Growth opportunities exist for both distribution companies already selling drilling fluids and for companies interested in expanding their product line. Prior to my tenure at CETCO Drilling Products, I actively sold drilling fluids for over a decade through distribution to contractors. Through successes and failures over the last 20-plus years handling drilling fluids, I have learned a lot. This article will provide some tips on successfully distributing drilling fluids.
Drilling contractors know their stuff! However, every day brings new challenges. At times, contractors need solutions to a problem they face in the field. Understanding the basic principles of drilling fluids, polymers, additives, and the various grouts and sealants will provide the distributor team the opportunity to troubleshoot and help contractors. This may mean training all sales staff or having a product line expert on staff ready to support the contractors in the field. Many times, a contractor does not know about new products that could significantly improve production. It is up to the distributor to relay this information in a timely manner.
Build a relationship with contractors, and you will increase sales. Visit them on jobsites, attend association events (local, regional and national), and have or sponsor open houses, focus groups or fun activities. Several roles within the contractor’s company influence which products to purchase. Get to know the management, drillers, estimators, purchasers and helpers to understand their individual needs. Their purchasing motives often differ.
There are two types of distributors: stocking and non-stocking. The stocking distributor offers the most value to the contractor. Stocking distributors understand their contractors and the products they use. They have proper stocking levels available. Communication is the key! The distribution team communicates with the contractor. They know what jobs are starting, finishing and planned — revolving the product stock on a regular basis. Communication with the manufacturers about lead-time, pricing and logistics is also a value-added service the distributor brings to the sale.
Distributors should keep a large inventory of regularly moving products, as well as a small inventory of products needed in case of an emergency. For example, a driller may encounter a theft zone where their regular fluid does not stay in the hole. An emergency stock of a lost circulation material (LCM) product may help the driller quickly when they need it. A well-stocked distributor has this on hand for when overnight delivery is too long.
Communication and Feedback
Be transparent with capabilities, lead times and pricing. Provide the best information you can to the customer. If a product has an extended lead time ensure the customer knows in advance so they can plan and be proactive.
Keep a mind frame of continual improvement to retain drilling contractors as your customers. Listen to and take seriously both compliments and complaints.
Keep a mind frame of continual improvement to retain drilling contractors as your customers. Listen to and take seriously both compliments and complaints. At my company, we aim to learn continually by listening to our distributors and contractors. This can be accomplished with regular, in-person meetings, phone calls and surveys.
Rely on your Vendors
Let your vendor know what you need for success. This helps both the manufacturer and distributor. Drilling fluid vendors can provide training, marketing collateral and on-site support. Joint sales calls can help the contractor, but also provide a day of education to the distributor sales team. Vendors rely on the distribution partnership to be successful and serve the local contractors.
The construction drilling industry plays an important role in the infrastructure work in North America, as well as globally. The next 5 years promise opportunity and growth for contractors, distributors and manufacturers alike. Our industry is made up of hard-working, “get-it-done” individuals. We have a tremendous opportunity to grow successfully as drilling fluids technology and demand increases. Buckle up. You are well positioned for the ride!