We’ve heard a lot about how Kern’s big oil producers fared through the 2014-17 downturn. The mass layoffs, the restructuring, the recent uptick in activity as prices finally justify substantial investment.
Now let’s hear how it went down for the suppliers, the little guys who saw orders dry up during the worst decline in recent memory. In a word: white-knuckle time.
With due respect, if you’re a supplier and you were smart when a barrel was going for $100 and up, you weren’t carrying a lot of debt when it fell below $30. You tried to hold onto your best people, serve that trickle of business at the highest level possible and hope to gosh things turn around quick.
Potential customers in other industries started to look pretty good. But how far should you go to win what was basically incremental business?
Bakersfield’s Pacific Coast Instruments, a temperature measurement and gas regulator specialist doing business since 1987 as Central California Instruments, turned its attention to food processors and companies dealing in water and wastewater.
Pacific Coast Instruments used to have customers in those other industries, but that was years ago. Most of its former contacts had moved on or retired.
“They remember me, remember our company, our products,” Vice President Tom O’Leary said. But “it’s a whole new ballgame. Old personnel were gone,” he said.
Cold calls didn’t work. Now it was about being persistent, being a good listener, understanding the customer’s needs.
“That’s the best thing you can do, is really listen to what they’re saying,” O’Leary said. “That will reveal what they’re interested in.”
He recalled a situation maybe seven years ago, before the downturn, when he stopped by a plant 50 miles outside Bakersfield (he’d rather not say where). He was talking with the instrument guy when suddenly the plant manager walks through the door.
There were introductions, and the manager handed O’Leary some weird fuse and asked if he could find a new one. “I said, ‘Yes, I think so.’”
That same afternoon, back in Bakersfield, O’Leary asked his guy if he could get one. He could. It was going to cost 45 cents. The customer is now a six-figure-a-year client.
“They said: ‘Hmm. This guy can do things,’” O’Leary said.
It was much the same during the downturn when the company had to reach outside oil. He made sure not to be overbearing but be persistent. He strove to keep customers abreast of the latest innovations. Now, as oil picks back up, food processing customers are coming in four, five a year.
“It’s just being human and good,” he said. “It all comes down to people.”
Survival was different for Bakersfield automated valve company Process Instruments & Controls. It didn’t diversify during the downturn. That was going to mean a valve here and there, not the big, project-based orders it was used to delivering to Kern’s biggest local oil producers. Instead, “we basically hunkered down,” founder Paul Wade said.
The company had “taken care of the golden goose” during the good times, as opposed to taking the money and “putting it back in our pockets,” Wade said. Still, things got tough.
A decision was made to “entrench into the oil companies,” he said.
That meant working as a partner in process improvement. Process Instruments & Controls forged new solutions to drive down its customers’ costs and create new efficiencies.
He likens it to sowing seeds when times are slow so as to harvest when conditions improve.
“We’ve just weathered the storm and, you know, stayed true to what we’re good at,” he said, “and developed deeper relations within the oil industry.”
Listening, in other words. Focusing on the customer’s needs. Survival of the most responsive.
John Cox is the business editor of TBC Media.