Blockbuster’s story is a cautionary tale filled with lessons-learned that was written by one of the oil industry’s very own. Like so many companies in the ensuing decades, this is yet another story of the digital land grab gone wrong.
The company used to have 60,000 employees and 9,000 stores worldwide with a market value of $5 billion and revenues of $5.9 billion. Today, Blockbuster is a bankrupt relic of the past. A business school case study on how to do everything wrong when it’s time to keep pace with the increasing rate of change around you.
So it should come as no surprise Blockbuster was founded by an oilman.
The Digital Land Grab Only An Oilman Could Miss
When things were blowing and going in the early ’80s, David Cook lived in Dallas, Texas. He wrote computer programs to manage inventory for large oil and gas companies. When the market collapsed in 1985, his wife Sandy suggested they jump in on the surging VHS rental market.
They went from unpaid invoices to the heights of international business success. Then it came crashing down all around them.
In the year 2000, Blockbuster executives laughed Netflix CEO Reed Hastings out of the room when presented with an opportunity to buy the young DVD-by-mail and streaming movie startup. Not understanding the digital land grab it was up against became the company’s Achilles heel. More on that in a moment.
The parade of blunders continued throughout the decade until 2008 when the company tried to purchase Circuit City for $1 billion. The deal didn’t close thanks to Circuit City’s bankruptcy the following year. Not to be outdone, Blockbuster was forced into bankruptcy in 2010.
Over the same period, Netflix went from just under 1.5 million subscribers and US$272 million in revenue in 2003 to 16.9 million subscribers and $2.16 billion in revenue in 2010. The company’s stock was also trading at $175.50 by then.
The Digital Land Grab Comes Full Circle
This brings us back to where we started. An oilman who missed the digital land in his industry, refused to adapt to the changing business world, and ended up suffering the consequences.
Here is the heartbreaking truth about all of this story; it’s still happening! I guarantee every person reading this article can think of at least one colleague in the oilfield who refuses to accept reality in 2017.
He won’t learn email, he doesn’t have time for LinkedIn, and why the hell would he need a website for a digital land grab when he’s gotta get out there and press the flesh to close business in this industry?
Are you thinking of him now? Say hello to Blockbuster version 2.017. It won’t be long before his business is bankrupt and he’s starring in case studies.
How can you avoid a similar fate?
Let’s look at how you can make the next 10 years the best in your businesses history so when 2027 rolls around you’re cashing checks, instead of disputing them in bankruptcy.
Looking in from the Outside
Anyone who’s been in the oil business for longer than a few years has seen booms come and go. Recency bias makes us naturally think of the US Shale Revolution first.
If you’re in the industry, you probably experienced the shale boom over the past decade at the local level. You tripped pipe in the Haynesville. You analyzed reservoir pressure in the Bakken. You gave your only child for leases in the Eagle Ford.
Let’s focus on the last example. Any oilman worth his salt knows to keep it quiet when he has a big oil strike. The moment word gets out interest in the area will heat up. Competitors will rush in and start leasing acreage. The more wells that come on strong, the more it costs to lease the acreage.
Next thing you know it’s 2010, and you just a paid $12,500 per net acre lease bonus on an 80-acre tract ($1 million) in Gonzales County. And you haven’t even started drilling yet!
How many times have you wished you had gotten in on a play at the ground floor? You heard rumors and brushed them off. You could have gotten prime acreage for pennies and didn’t make your move.
Now you’re priced out of the market. Leases are going for too much, you don’t have enough cash on hand to take on the cost for services, and don’t even think about building out infrastructure now that every landowner knows what they can get for Right of Way.
You’ll be hard-pressed to find an oilman who doesn’t have at least one play that got away.
Depressing regrets aside here’s the good news; a play is heating up right in front of you none of your competition is leasing yet.
Digital Land Grab: Welcome to the Real Virtual World
You’ve probably heard about the Internet by now. To quote Homer Simpson, it’s on computers now!
In the same way the shale revolution forever changed the way we discover oil, a strong digital land grab strategy can forever change the way our prospects discover us. The industry’s instance on exclusively using offline activities to drive business is the biggest problem we face in 2018.
We don’t think twice about spending $50,000 on a trade show booth, spending another $10,000 flying our entire team to the show, and sinking hundreds of man hours into an exhibit that produces one or two leads.
At the same time, we can’t see how it makes sense to invest $5,000 into a new website. We can’t see why we should spend money to reach the nearly eight-in-ten online Americans who use Facebook.
We can login to a website and say, “Show this add to all men between the ages of 45-65 who live in these zip codes, work for these companies, have this job title, make this much money, have this many assets, are interested in these topics, vote this way, support these causes, and drive this truck” … and we couldn’t be bothered!
I can’t help but think of that good ol’ oilman at Blockbuster. And I can’t help but feel frustrated.
It’s A New Day
Luckily, the number of people waking up in the industry is growing. We hear from more people every week that see what’s happening and want to beat the competition to the punch.
They realize the internet is filled with digital acreage. Their prospects and customers aren’t calling them for answers anymore; they’re asking Google. They search Google for answers about their oilfield services all the time, and they’re sick of not seeing their website at the top of the page.
They want to own the digital land grab, and they’re going to force their organization to change at any cost. Because they know if their company doesn’t change they’re going to be out of a job.
Early Adopters vs. Laggards: A Battle to the Death
As we saw above, oilman keep their cards tight to the vest. I’ve talked to more than one guy out there who doesn’t share best practices with guys on their own team.
If you want to own the digital land grab, you have to fight against the urge to keep it quiet. You need to become an internal evangelist. And you can’t make converts without doing your homework.
I don’t want to understate the struggle you’re up against. It’s hard to the oil and gas gray hairs onboard with digital marketing. I’ve been at it for 5 years. Most days I feel like I haven’t even made a scratch, let alone a dent. But, it’s the small wins that matter. Nothing beats the look in an executive’s eyes when he realizes how much market share he can capture crushing the competition online.
If you want to sell your leadership on digital marketing, here is my best advice — show them the money!
Follow the Money. Always Follow the Money.
Your boss can’t pay you with Facebook Likes, Twitter retweets, or Instagram followers. All of these digital metrics are meaningless. Your ability to drive real, actual, tangible business results — a.k.a. REVENUE — is the only thing that matters.
If you work for Baker Hughes show your boss how National Oilwell Varco (NOV), Bright Automation, and Trinidad Drilling are getting all of the leads for top drive control systems.
If you work for NOV, show your boss how Cabot, Wikipedia, Rigzone, and Newpark Resources, Inc. are capturing all of the web traffic looking for drilling fluids.
If your boss somehow still doesn’t believe people in this industry use that internet, learn how to use Google Keyword Tool. Show him how many searches where you can quickly rank first.
This is just a handful of related keyword suggestions Google gives when you search “coiled tubing tools”.
Let That Sink In
Think about that for a minute.
Are tween girls looking for Justin Bieber pictures accidentally searching Google for “coiled tubing tools”? Obviously not! Those are qualified leads you could be selling. If only you were doing it right.
But if you made it this far in this article, you’re clearly ready to do it right. So get out there do the WORK. Once you get executive buy-in, nothing can stop you from dominating the digital land grab.
Stay grinding, my friends!
Are you struggling to get your boss to let you go all-in online? If you show him the money, he’ll get out of your way. If you’ve tried everything and he’s still not onboard, email me at [email protected]. I’d love to help you build a business case!