A new partnership was announced between SCOTGRIP International and IRE FZE to provide anti-slip...
IRE specializes in the purchase and supply of products for the international oil and gas industry. We are focused on providing innovative solutions and superior quality products at competitive prices while offering premium customer service. In order to do this, we have great partners like Hi-Kalibre Equipment in our corner to support our efforts. Hi-Kalibre has been a trusted partner of ours for 10 years now. We would like to share these 10 things that we've learned along our partnership journey.
A large part of our success came from building a vast $1M stock profile of Hi-Kalibre products across 3 locations in the Middle East. This didn't happen overnight. It took years of analyzing the market, taking risks, making mistakes and learning every time to ensure we could properly support our customer's needs. It is not easy, but the benefits are priceless and will earn your customer's trust and loyalty. Maintaining the right stock profile is no easy task either. It requires consistent attention to the changing needs of the marketplace, endless meetings and discussions to understand forecasts, and weighing up all the factors combined with technology and software to help us stay ahead of the curve.
Another critical factor that helped us on this journey was building partnerships and alliances outside of our customers and suppliers. Customers do not solely drive market trends. They may be driven by Original Equipment Manufacturers (OEMs) or National Oil Companies (NOCs) or international standards agencies like American Petroleum Institute (API) or International Standards Organization (ISO). When faced with a catastrophe like Macondo, our industry brings together NOCs, IOCs, standards bodies, OEMs and independent research labs to investigate the root causes and develop new industry standards. Often that impacts the standards which govern how oilfield equipment is designed, manufactured, tested, deployed, inspected and repaired. Therefore, it's imperative that we stay involved in those discussions and ensure we have the knowledge to support our clients through these challenges.
Knowing how to sell or stock a product does not teach us the full story. If we have the opportunity to train with the manufacturer on repairs and servicing, our knowledge and understanding increases exponentially.
After sales teaches us how to troubleshoot real issues from the field. Sometimes, we observed failures in the Middle East that our manufacturer had never seen before in other regions. In working through these problems, we gained application specific knowledge that allowed our team to add immense value in future interaction with our customers. Having that expanded experience and knowledge means you can truly be a consultant for your clients and guide them on best practices.
Over time, with the experience gained, you can even start offering training services to your clients. This process helps our clients improve their inventory and maintenance process, which leads to longer product lifecycles and, ultimately – more value for your customer. That's when you know that you are no longer a representative making sales; you become an expert offering consultancy services on how to maximize your product's benefits for your clients.
One of the central reasons for our 10-year success with Hi-Kalibre is not because of the products they sell, the customers we service or the way we deliver them; the main reason is shared values. We understand and empathize far better with others when we feel there are similarities. Despite IRE and Hi-Kalibre coming from very different backgrounds and working on opposite ends of the earth, we've found enormous similarities in how we approach our respective businesses. This allows us to navigate any new challenge or opportunity with collective ownership and responsibility for the outcomes. It allows us to take additional risks, safe in the knowledge that we will share those gains and losses. We can work through disagreements more effectively, making the relationship more robust. People may come and go through each of our organizations, but the culture and values are always consistent, which is why it has to be one of the most fundamental success factors for long-term business relationships. Through all the ups and downs over the last 10 years, it would be easy to fall out of favor or to let differences get in the way. Fortunately, our strong foundation of shared values has allowed Hi-Kalibre and IRE to always find common ground to move forward and our relationship continues to strengthen as a result. Nowadays, whenever we are hunting for new manufacturing partners, the single most important factors we're looking for are shared values and culture.
The oil and gas industry is synonymous with booms and busts. When a downturn hits, it's common to see mass layoffs, budget cuts and major panic. One of the first areas that get slashed is R&D. However, when times are tough, we have to face our biggest challenges. So it's fair to assume that fresh and innovative ideas are needed more than ever during these periods. Often these breakthroughs help companies perform the same task or service more efficiently for less money which can prove critical when fighting for survival!
Before the 2015 downturn, Hi-Kalibre started working on their new actuator design. Midway through 2015, they were ready to launch. The only problem was that the market experienced the worst collapse in history. Unfortunately, most customers had no desire to spend money on new technology at that time despite its clear benefits and savings in maintenance and spares. Undeterred, Hi-Kalibre pushed on and offered free trials to several key customers for market testing. This was not an easy sell but after 3 years and several successful trials, we had an actuator design that was field tested and proven. But Hi Kalibre didn't give up there. They continued their R&D drive to ensure we were stocked with 4 units in our Dubai facility - ready and waiting for that opportunity to strike. So that when the market did start coming back to life, we had a tried and tested product ready to go. IRE went on to sell 4 actuators within 18 months of receiving them in our facility and our customer's feedback was five stars. It shows that it's worth focusing on R&D through the ups and primarily through the downs.
During the earlier years of working with Hi-Kalibre, we were unaware of all the added value that came with buying their product. Our sales efforts were primarily driven by transactional factors like price and delivery. Two industry downturns later, our client's behavior was also focused firmly on price first, then delivery. This strategy was driven by the changes in the industry but it had repercussions.
The lesson we learnt was that there will always be someone cheaper. It's our job to ensure differentiation and bring additional value to our customers. It's also important to recognize that the highest price might not be the best fit for your customer, which is why we shift the discussion away from price and more onto value. Examples include lifecycle value, remote troubleshooting, emergency support, warranty protection, stocking programs, customized engineering etc. If customers are not interested in talking about these topics, then sometimes it's better to walk away.
Customers who understand how value extends beyond price always reap the highest benefit. Unsurprisingly, these companies are often the highest performing companies in the market. If you've ever heard of the 80/20 rule and applied it to your business, you will know that, generally speaking, 80% of your revenue usually comes from 20% of your customers. So, is it better to focus on the 20% which offers the most value? We observed that the top 20% of our customers understood our value proposition the most. Therefore, we needed to provide them with more attention than any others. Ensure that they receive unprecedented value and support any time of day. That led us to long-term supply agreements, consignment programs and closer collaboration with those using our product.
Each company has a unique set of characteristics which will impact the customer experience. When you enter a partnership with a manufacturer, take time to sit down and identify your collective superpowers and review them regularly. When we know our strengths, we must decide how to communicate them to our staff, suppliers and customers. If your team doesn't know your differentiators by heart, your customers probably don't know them either.
A Blue Ocean Strategy can be applied here. It teaches us to be more creative with our value proposition. If we try to compete head-to-head with our competitors, we will all be fighting over limited resources. However, if our products and services genuinely stand out from the crowd, we can bypass the competition.
We often put high expectations on our manufacturing partners to provide us with market information, sales content, sales scripts and other tools we can use in our day-to-day business. However, these tools are often not relevant or suitable for our region. We started to realize that the core competencies of a manufacturing company should always be "manufacturing" first and foremost. In contrast, our core competency is focused on taking that product into the local market. More specifically, our job is to design and implement an effective sales and marketing strategy suited for this region. To do this properly, we must understand our manufacturer's business inside out, like it were our own. This is essential if we are to recreate the same customer experience which they offer to their clients in their domestic market.
We call this "the branch company approach", and we use this as a model to guide our behavior. Our staff learn to speak with passion and purpose about the products and services they offer. We become product experts both technically and commercially. Training and workshops are regularly carried out between the teams to help us replicate their customer service. Lots of work goes into aligning the standards and processes of each company. This can be a challenging task. Luckily when you work with a partner like Hi-Kalibre, who is patient and supportive throughout this journey, it accelerates the learning curve, and the results follow shortly after.
Every region and even country will often have different terminologies for the same thing. It's important to take time to understand their terminologies and common names. Firstly, it helps build trust when working with new customers and secondly, it reduces the chances of making mistakes. It helps to ask many questions in the initial stage to ensure we narrow that mutual understanding. We have seen many cases of customers asking for IBOPs when they really wanted and needed FOSVs. If we don't take the time to ask and check, it could create big problems later down the line.
Over the years, Hi-Kalibre has made, on average, 1-2 trips per year to visit their customers in the middle east, face to face. This has always had a positive impact on our customer relationships and highlights how much Hi-Kalibre cares about their business. By building those in-person relationships, your clients feel more trust.
It's not all just about suppliers coming to visit their customers; it's almost equally important that we send our people to go and see our suppliers. Similarly, we have visited the Hi-Kalibre shop in Canada on average about once a year since we started working together. This opportunity to visit all the staff members makes a huge difference. For 51 weeks of the year, they are just another name on an email or another voice on the phone but in person, you can start to build more of a relationship and more understanding between each party.
Evolution is essential for survival. After 10 years of working together, we realized that both companies never sit still. Each team is constantly looking at new methods of building value for our customers. It is this approach which has allowed us to continuously innovate and evolve in line with the changes in the marketplace. Having that additional trust and understanding between both companies, IRE and Hi-Kalibre can afford to take more controlled risks and explore new opportunities which may not be possible for others. Get in touch if you would like to hear more about our expansion plans in the Middle East.
An IRE partner for over 10 years, Hi-Kalibre Equipment Ltd., is a Canadian company that specializes in creating and manufacturing Blow Out Prevention equipment for oil & gas exploration worldwide. The Hi-Kalibre team has been supporting drilling and work over crews for nearly 5 decades and has many international projects attached to its name.
The Canadian company now enlists a full line of patent protected products revolutionizing the blowout prevention industry. They specialize in manufacturing:
Hopefully one day keeping track of all the unnecessary terminology will lead to an industry standardization of terms. Until then, keep up with IRE for more industry related educational information and news! We've got you covered.
Let us tell you more about our other Partners and Products!
A new partnership was announced between SCOTGRIP International and IRE FZE to provide anti-slip...
Over the past month, restrictions on our work and social lives have changed the way we are able to...