February 19, 2016

What Lubricant Distributors Need To Know About Oil Analysis

The market for oil analysis is competitive. The simple fact is that even after a reasonable mark-up by the distributor the net profit per sample is low. In addition, the product usually requires a great deal of support after the sale that further cuts into the bottom line. So, what benefit is there to lubricant distributors who sell oil analysis?

To effectively promote oil analysis there must be a benefit to the customer. The potential benefits include:

  • Early-stage detection of problems
  • Ability to maximize asset life
  • Lower operating costs
  • Increase availability

Once understood, lubricant distributors can determine the potential benefit of oil analysis not only to their customers but also to themselves. In doing so, you will be able to establish a strategy for interacting with the data and leveraging the information to maximize value for all parties.

Lubricant distributors can leverage oil analysis in two ways:

  • Prospecting and obtaining new business
  • Adding value to and maintaining existing business

A few examples of how oil analysis information is typically leveraged are as follows:

New Account Acquisition

The lubricant market is competitive and there are a number of reasons a customer may select a new lubricant distributor. In most situations the customer is satisfied with their current supplier, with the exception of experiencing one or two specific problems. They often describe these problems to other potential lubricant vendors and ask them to propose a solution. Understanding a problem is usually the first step to resolving it, which is where oil analysis can be very useful. Successful distributor sales reps will collect samples from these systems, have them analyzed, and come back to the customer with a solution based on the information obtained from the oil analysis. Solving customer problems in this way can be a very effective strategy for obtaining new business.

Monitoring ODI (Oil Drain Interval) Trials

Lubricant distributors often entice customers with the promise of extended drain intervals. This requires a demonstration of the superiority of their products based on its ability to remain in service for a longer period of time. Unless this strategy is executed safely (with supporting analytical data to back up their claims) unexpected breakdowns and higher operating costs will result. During these trials, oil analysis should be performed in a regimented manner to ensure the data is accurate, comprehensive and understood by all parties.

Uncovering Upsell Opportunities

Having trouble moving a customer from a low margin mineral oil to a specialty synthetic? Properly executed oil analysis can be used easily to demonstrate the increased value of higher cost products. Likewise, oil analysis results can be used to leverage other products in a distributor’s portfolio such as filters, dryers, breathers etc. While these are indeed upsells, they also provide measurable value to the customer and strengthen their relationship with the distributor.

Fluid Life offers lubricant distributors oil analysis solutions rich in training and education ensuring sales reps have the knowledge and confidence to execute each discussed strategy. If you have any questions about leveraging oil analysis to help accomplish your company’s business objectives feel free to send us a message or give us a call.