No Heat Service Calls….

Your customer’s don’t like them any more than you

do!

Presented by:

Leo VerrusoAdvanced Fuel Solutions

An Unplanned Service CallCustomer Perspective

Emotional:•Fear of unknown•Why•They were just here – 6 months ago!

Timeline of events:•Calling you now, but issue began long before•Do I have time for this today?•Phone number lookup•The wait•The rest of the day•What they had planned

Financial concerns:•With agreement coverage

– Hope it is covered

•Without coverage– Better not cost a lot.. I buy

their oil!!!!

Financial concerns:•Unscheduled = Costly•With agreement coverage

• Another no-charge event

•Without coverage• What can I charge without driving

my customer away?

An Unplanned Service CallCompany Perspective

Emotional:• Is this phone ever going to stop?• Is it my supplier?

Timeline of events:•These calls interrupt my ‘real’ work•Emergency call = unscheduled = hard to plan•Getting there fast is never fast enough

What is the cause of some of these calls?

Sludge build-up on oil burner nozzles and fuel line filters

Potential causes, cont.

Potential causes, cont.

Potential causes, cont.

Sludge Restricts Fuel Flow Adversely Affecting Performance.

Dirty System Clean System

Plugged Filters,

Nozzles & Strainers

What does it Cost?

1. To send a technician to a home for a service call that can be avoidable?

2. Rebuild the confidence of a customer who believes that the fuel is causing this issue?

3. To reduce the occurrence of these avoidable, emergency service calls?

Cost to Keep a Technician on the Road

• Hourly wage

• Hourly allocation of benefits– Hourly equivalent of health, time off, etc…

• Cost of vehicle on the road– Just think of this.. IRS average is $0.56/mile

• So… a 30 mile round trip service call costs you $15.00+ just for transportation

• Cost of uniforms, sundry items

Sample..

• $ 24.00 - hourly

• $ 15.60 - benefits (inc OT) run @ 65% of hourly comp

• $ 11.63 - service vehicle» 30,000 miles / year, 290 work days, 103 miles per

day. 103 x $.90 = $93 ÷ 8 hours = $ 11.63

• $ X.xx - sundry purchases

The Benefits Piece…

• $ 15.60 - benefits (inc OT) run @ 65% of hourly comp

• $24.00 / hr employee earns $50k straight time (2080 x $24)

• Add in all the taxes, OT & benefits… check the W2 of your $24 employee

• A $75,000 W2 = 50% wages –to- benefits ratio or $ 12.00 / hour• A $85,000 W2 = 70% wages –to- benefits ratio or $ 16.80 / hour

Sample, cont.

• $ 24.00 - hourly

• $ 15.60 - benefits (inc OT) run @ 65% of hourly comp

• $ 11.63 - service vehicle» 30,000 miles / year, 290 work days, 103 miles per

day. 103 x $.90 = $93 ÷ 8 hours = $ 11.63

• $ X.xx - sundry (rags, degreasers, torch gas, pipe tape) purchases, uniforms, etc..

Another Calculation Option

• Technician W-2 $ 80,000• Van (30k/yr @ .90) $ 27,000 (7 mpg / 4300g @ 3.50 = $15k)

• Sundry items $ 3,000

Cost (conserv.)$ 108,000

# of calls completed / yr: 1,200

Labor cost per call: $ 90.00

Cost per call: $90.00 + parts

What is the cost of one of these calls?

• 1.5 hours, including driving or unproductive time

• $60.00 per hour labor cost (all in)

• Cost of nozzle, filter, strainer, etc

• Opportunity of doing other billable, proactive work

• Any negative consumer perception

What Can Be Done?Condition Fuel for Optimum Performance

•Stabilizes fuel during summer fill

•Helps protect service department revenue for a healthier business

•Minimizes filter, strainer and nozzle service calls

•Improves consumer perceptions with oil

•Cleans and protects fuel systems

“Synergy”

People & Technology

ADVANCED DISPERSANT

• Helps clean storage tank gradually. Continuously cleans entire fuel system reducing filter and nozzle plugging

CORROSION INHIBITOR

• Prevents rust in heating oil systems, trucks and storage tanks

METAL DEACTIVATOR

• Prevents sludge formation generated from yellow metal contamination

MIDDLE DISTILLATE TRI-STABILIZER

• Keeping ULSHO, biodiesel, Bioheat® fuel fresh over an extended period of time. Essential component during summer fill.

Tri-Stabilizer Keeping ULSHO, biodiesel, Bioheat® fuel fresh over an

extended period of time. Helps control sedimentation that plugs filters, strainers and nozzles. Essential component during summer fill.

Fuel darkens and degrades over time in a storage tank. The darker color indicates that gum and sludge has formed.

ASTM D-1500 Color Ratings

Dispersant Gradually disperses tank sludge allowing it to pass through the

fuel lines, filters and strainers into combustion.

Results of ASTM D6468 Accelerated Stability Test, Reflectance @ 180 mins.

Untreated Treated

Corrosion Inhibitor Prevents rust from forming throughout entire fuel handling system.

Unprotected systems will increase plugged filters, strainers and fuel lines.

Result of NACE TM-01 Corrosion Test

National Association Corrosion Engineers

Untreated Treated 50 PPM 100 PPMUntreated

Metal Deactivator

Reduces fuel degradation caused by interaction with yellow metals, (copper).

Heating Oil will darken and degrade over time, copper lines in heating oil systems accelerate this occurrence.

Results of ASTM D 6468 Accelerated Stability Test, Reflectance @ 180 mins.

What does it Cost?

1. To send a technician to a home for a service call that can be avoidable?

2. Rebuild the confidence of a customer who believes that the fuel is causing this issue?

3. To correct the source of these avoidable, emergency service calls?

Costs?

1. Should be a profit center, like any premium product that is consumed

2. Any cost to introduce the fuel additive is offset by the financial benefit to the company – typically in multiples

3. Financial benefit is immediate

Return on Investment….Items

aAvg. Annual Vol. / Cust (gallons)

850

bCustomers on Service Plan (%)

75.0%

cAverage Time on Service calls (hrs)

1.5

dCost of labor / hr incl. overhead

60.00$

eAvg. fuel/combustion service Calls per customer

0.33

fFuel / Combustion call reduction (%)

75.0%

g Fuel Treatment cost 0.0050$

Cost of Treatment per customer

4.25$

Savings per customer ($) (see below)

16.71$

Net Savings / Customer 12.46$

Savings Calculation = E x F x B x C x DPlus: Average Savings of an oil burner nozzle, fuel line filter & strainer is @ $5.50 per occurrence - not in above analysis

Company Variables

Data Points

Treatment (cost / savings) Calculations

Data Input

$-

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

1-in 4 1-in 7 1 in 10

Cost of Treatmentper customer ($)

Savings percustomer ($)

Net Savings perCustomer ($)

How it Gets Done…..

• Fuel conditioning can occur at the terminal supply point level

• Can occur at your fuel storage tank inbound supply

• Can occur at via injection pumps

• Can be splash blended at the truck level

The Premium Brand Opportunity

• We have only discussed today, operational opportunities

• Marketing opportunities are equally important

• If you are going to do it – take credit for it!

What’s In It For The Customer

What’s In It For The Customer

Industry IssuesRefining PrincipalsSummer StorageFungible Nature of Supply

Post Treatment

Advanced Fuel Solutions

Fuel Quality Review & What It Means To Your Customer

Specializing in Improving Fuel Quality

At Your Service

Leo Verruso

Advanced Fuel Solutions

(978) 258-8360

leo@yourfuelsolution.com

www.yourfuelsolution.com

Brookhaven Fuel Performance Study, Phase I

Pipeline fuels were clearly better than waterborne fuels

Additives did improve fuel stability

Tank inspection and tank design impacted fuel quality

Practice good housekeeping and treat unstable fuel with an appropriate additive

Brookhaven Fuel Performance Study, Phase I

Unstable fuels lead to particulate and sludge formation

Fuel degradation materials lead to fuel instability which increases with time

Co-mingling incompatible fuels resulted in unstable fuel

Poor thermal stability leads to coke / carbon formation on nozzles

• Cleans and protects fuel systems

• Minimizes filter, strainer and nozzle service calls

• Stabilizes fuel during summer fill

• Improves consumer perceptions with oil

• Helps protect service department revenue for a healthier business and stronger bottom line