Oil field services companies must rethink the way they do business in today’s market – using a vendor marketplace to sell your services can make your business run more smoothly.
Oilfield services (OFS) companies have long faced a series of major challenges, and these challenges have only gotten tougher in recent years.
Following the oil price crash back in 2014, it was OFS providers who suffered the most in the subsequent years, according to a report by Deloitte.
While oil prices declined by around 45 percent in the period 2014 to 2019, the decrease in the market capitalization of OFS companies was even more severe.
The Deloitte report showed that, during that period, OFS market capitalization fell 50-90% depending on the segment.
It’s time to change the way you do business.
If the decline in oil prices wasn’t enough, the OFS industry was dealt a further blow in 2020 when the global Covid-19 pandemic hit.
Last year, a report by EY highlighted how the Covid-19 crisis and the oil price crash had severely impacted the OFS industry with the result that many companies in the sector have been forced to re-evaluate their operations and strategies. The report added that OFS companies needed to take “bold actions for long-term competitiveness”.
Given all these commercial pressures, it’s important that OFS companies take steps to shorten time to revenue.
What is time to revenue and why is it important?
In simple terms, time to revenue is the length of time it takes from when you first interact with a potential customer to when a deal with that customer is closed. Indeed, there is a view among some B2B data analysis experts that time to revenue is the one key performance indicator (KPI) that businesses should strive to understand and improve.
Here are three major benefits of understanding, and improving, time to revenue:
- You can set realistic sales targets This enables you to make forecasts with confidence. Failing to hit business goals can kill company culture and morale.
- You spend your budget more effectively Budget success is critical for well-run businesses. A better understanding of time to revenue means that you will consequently have a better understanding of whether you have allocated your budget correctly.
- Close deals faster If you are spending less time on leads that potentially could go nowhere, you are spending more time on those activities that make a vital contribution to your business.
Why Improving Time to Revenue is Difficult
Unfortunately, shortening time to revenue is not easy.
This is because there are a number of barriers to sales success that are difficult to overcome and therefore shortening time to revenue can be challenging.
Here are three reasons why shortening time to revenue can be problematic:
- Inability to negotiate payment terms Problems agreeing payment terms lengthen time to revenue.
- Unfavorable payment terms given by operator Operators’ own timeframe for making payments may not correlate with the timeframe your business needs.
- Internal resources needed to process invoices Operators may not have an established method for processing invoices, hence payments can be delayed.
Accelerating Time to Revenue
Workrise provides an oil and gas vendor marketplace that can help vendors like you speed up time to revenue. As an approved vendor, we can match you with operators that will be the right fit for your business.
Using a vendor marketplace means that the potential customers you are matched with will have a more comprehensive understanding of the service you provide and therefore more confidence that you will be able to meet their requirements. In turn, using a vendor marketplace will mean you will have a clearer understanding of your customer’s exact requirements.
Advantages of using a vendor marketplace start with the fact that you can sign one master services agreement (MSA) with Workrise that gives you access to a large number of operators.
Meanwhile, using a vendor marketplace frees you from the burden of having to negotiate payment terms which further reduces your time to revenue.
And because of all of this, time to revenue will be reduced significantly as you are matched to the right customer for your business in a much shorter timeframe. Think days. Not weeks or months.
At Workrise, we can match you with the right customer for your business, so you can get back to focusing on what you do best.
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