In partnership with Scottish Enterprise
Founded in 1965, Johnston Fuels is a family company which employs almost 200 people in five different businesses across the UK, with its headquarters in Bathgate, West Lothian. Group managing director Sam Johnston talks about how the fuel haulage business is bucking the trend by delivering significant service innovation in a traditional industry – helped by Scottish Enterprise.
Would you describe Johnston Fuels as an innovative business?
Yes – in some respects. We have been at the leading edge in areas like driver analytics and monitoring systems to ensure tankers are topped up at the right times – but there is always an element of having to get on with day-to-day business and not take on big projects.
It can be daunting and challenging to look at technology when you are used to trucks and moving fuel.
That’s when you need a sounding board – someone to keep your projects on track and ensure you are not constantly reacting to daily business and putting those projects on the back burner.
So how did Scottish Enterprise help?
There are two key projects – My Oil Club, which is almost complete, and Heating Services, which is very much in its early stages.
Our business is pretty much split three ways in terms of delivering oil and LPG (liquefied petroleum gas) to businesses, farmers and homes.
My Oil Club is specifically targeted at residential properties and aims to make it easier for a group of householders to band together to buy fuel collectively.
In the past, some groups have taken on significant administrative burdens and ended up running a mini oil business.
My Oil Club aims to make it easier to form a group and removes the administrative burden of keeping a group going.
By communicating and sharing information more effectively with communities with oil clubs, we make life easier for them and we make deliveries more efficient for us – in turn, that can make the fuel cheaper for the customer and we also put money back into communities with oil clubs.
What specific help did you get?
Scottish Enterprise got involved when we decided to build a web app to make it easier for potential customers to find oil clubs online and to order fuel online.
They helped us with the technology, pointing us in the right direction in terms of platforms, and also helped with some funding.
It’s been a year-long project because we found that in our traditional industry, the technology was not really there to build on, so we had to build it ourselves.
We had to do a lot of back-end work and Scottish Enterprise gave us advice throughout this process, for example encouraging us to use Microsoft Dynamics as the basis for development.
We will now be able to use customer information and behaviour to target communications much more effectively – and send specific information to oil clubs.
What about the Heating Services application?
That is a more recent project and again reflects the traditional nature of the industry and the absence of widespread digital take-up.
It is perhaps more ambitious and partly reflects the confidence we took from developing My Oil Club.
Boiler and heating repairs and servicing is very old-fashioned in many respects and customers’ satisfaction levels have not been especially high.
This project is about routing engineers more effectively and capturing all relevant information about a household boiler. We are building a CRM (customer relationship management) system to log and track individual cases online with relevant comments and photographs – and moving away from a manual, pen and paper system.
We want to improve the engineers’ experience by giving them a mobile app so they have all the information they need to do the job to the best of their ability.
They can order parts and approve invoices online, working with head office, and make the whole process far more efficient.
Invoicing is still a long and laborious manual process and we have to move away from that.
What does that mean for your business?
It makes us a more efficient company. It also opens up opportunities to use third party engineers. We have a very large footprint, from Southampton in the south of England to Inverness-shire, but we sometimes find we don’t have a staff engineer in a particular area.
With Heating Services, we will be able to get third parties to use our systems, rather than just making a recommendation to a customer and passing the job on.
Heating Services has had its first build in terms of functionality and we will run trials and look for continuous improvements as it takes shape.
What does it mean for customers?
The aim is simple: to improve customer communication and make the whole customer experience better.
Yes, we are gaining operating efficiencies as a business but we are more focused on translating what we are doing into something the customer can see – and ensure that they also see the benefits.
How are you looking to build on My Oil Club and Heating Services?
We are looking more at the digital side of things; by creating a lot more content, we are more visible online and easier to find. My Oil Club created more than 100 new online pages (by having specific landing pages for communities with an oil club) and that improves our search rankings and means that more people can access our services more easily.
We are also looking at improving our online services in terms of ordering fuel and account management. We want to make it more bespoke and easier for the customer.
So how do you reflect on the innovation process overall and how has Scottish Enterprise helped Johnston Fuels?
My Oil Club and Heating Services projects have been very positive for the business. They were not without their challenges, but there are always challenges with new projects – and they have been very rewarding.
We are looking forward to them going live and to deriving the benefits after all the hard work that has gone into both projects.
It’s all about digital improvement, greater efficiency in the business and a better customer experience.
There is a cultural aspect too. Getting My Oil Club up and running has shown that we can innovate and helps to create and embed an innovative culture in the business – it makes us want to do more.
DELIVERING BETTER SERVICE
Scottish Enterprise has put a stronger focus on service innovation in recent years, stressing to companies that innovation is not just about R&D and technological improvement.
Jim Watson, director of innovation and enterprise, says: “There is a recognition that to achieve a significant change in a business, you have to explore all areas – and service innovation is a big part of that.”
This makes sense when you consider that services make up 65 per cent of global gross domestic product, with this forecast to rise to 75 to 80 per cent over the next decade.
“Customer expectations are changing rapidly – just look at banking and the growth of mobile applications. It’s not about incremental change – it’s about re-thinking the business model,” says Watson.
He says the benefits of successful service innovation are simple: “It offers a competitive advantage and helps to create or sustain jobs, and increases sales and profits for the business.”
Watson argues that successful service innovation is built on the ability to look at a business from the customer perspective – and that Scotland can do better: “We are doing OK, but we need more companies, service companies and manufacturers, to engage in service innovation and not just product development.
“More companies need to take that helicopter view – looking at where they are now and where their customers’ expectations might be in five or ten years’ time.
“SMEs spend most of their time getting on with their business – as Johnston Fuels describes – but sometimes they have to step back and put themselves in customers’ shoes.
“Are they delighting their customers or are they providing what those customers wanted two years ago rather than what they want now or in the future?
“It’s great to see firms like Johnston Fuels, in a very traditional industry, really thinking about the customer experience and helping them to engage more easily – and grasping the digital agenda, which is so central to service innovation.”
Watson stresses that Scottish Enterprise can provide highly specialised support to help businesses to drive forward service innovation: “We are there to offer a range of expertise and financial support which helps to de-risk innovation. SMEs have lots of conflicting priorities and limited resources. We can help them to deploy those resources effectively in the best long-term interests of the business.”