Orange Coast Petroleum Equipment

An exclusive focus on aboveground work drives success.

COMPANY SNAPSHOT President: John C. Miller Year Founded: 1988 Year Joined PEI: 1989 Headquarters: Orange, California Employees: 15 2007 Sales: $12 million Web Site: www.ocpetroleum.com

"The petroleum equipment world is not just service stations and car dealerships. Thereís a lot in between," says David Hoferer, general manager of Orange, California-based Orange Coast Petroleum Equipment. "In between" is where Orange Coast has made its living since its establishment in 1988, and the company has been able to carve out quite a little niche for itself.

The roots of Orange Coast Petroleum Equipment lie in President John Miller's exposure to the industry with a previous company. Seeing an available niche for a business focused on lube equipment and aboveground fuel storage, John Miller started the company with a partner in 1988. "We felt there was a need for that kind of service in this area," recalls Miller, who bought his partner out after three years in business.

Miller, however, decided it would be best for the company to stay out of the underground tank market. “The regulations were constantly changing, and I didn't see a way to stay ahead of what the future would hold,” Miller says. Therefore, Orange Coast only deals with aboveground storage tanks and lube equipment. The company does almost no business with service stations, choosing instead to concentrate on commercial and industrial users of oil and fuel.

During its 20 years in business, Orange Coast Petroleum Equipment has worked closely with customers to provide solid, effective solutions, expanding by knocking on doors and uncovering new business such as fuel truck repair and individual above-ground storage tanks for municipalities, construction companies, sand and gravel pits and other places that use heavy equipment. “We do business with anyone that wants a private fuel station or a lube truck for its fleet, or an on-site service facility to perform oil changes and general maintenance,” Hoferer explains. “Lube equipment is still our primary business, but we've grown into other areas by word of mouth and introductions from our base of core customers.”

Such recommendations from customers aren't surprising, considering that Orange Coast remains in the same location where it was founded. “We put stickers with our name and address on anything that we work on,” Hoferer says. “People come in with equipment that has old Orange Coast stickers from 20 years ago.” Many customers are small, independent equipment owners and general contractors. “They remember getting something taken care of and it lasting them 10 or 15 more years. They may not always remember our name, but they know where we are.”

Operating from just one location spread across three physical addresses—one building houses offices and a will-call/parts counter, another contains a repair shop, and the third is used for storage—near Disneyland, Orange Coast covers an enormous area with just 15 employees and one office. Though primarily focused on Orange, Los Angeles and Riverside Counties, customers are spread all the way from San Diego to Modesto and Sacramento. “Three years ago, we weren't working in Northern California at all, but one of our customers bought another company and needed help up there. Now, we're there quite a bit,” Hoferer says. “We grow as our customers grow.”

General Manager David Hoferer oversees the lifting of a 7,000-gallon Hoover Vault over the rear wall of a car dealership in Newport, California, where it was being installed.

Even new people can be relied on to give answers in short order. “We feel that the best way to get people involved is to give them tasks to work on, not send them home with a big stack of manuals to read,” Hoferer says. “We want them to be familiar with what we do and be able to provide real answers when people call in. The only real way to know is to do it.”

The company's expertise is based on the fact that employees want to stay and work there. “I know itís a cliché, but we really are like a family,” Hoferer says. “Weíre pretty laid back and try to create an environment where people will have a good experience while working here.” Employees often wear shorts to the office, and Miller buys lunch for employees every Friday as a token of his appreciation for putting in long hours and often skipping lunch to help customers. The company has no formally written mission statement, and employees arenít given formal job titles.

Implicit in such a structure is that the employees have to show why they deserve such hands-off treatment. “The nice thing for me as general manager is that I'm not a watchdog. Everyone's motivated,” Hoferer says. “Everybody here probably would be successful wherever they went. Thatís the real key in all of this.” Nobody earns commission, so every employee is motivated by providing quality service. Often that's the most important skill management looks for when interviewing potential employees. “The last two people we hired were from outside the industry, and we could tell both were service-driven people,” Hoferer adds.

Miller instills the customer-oriented philosophy by having the phone ring at everyone's desk rather than being filtered by a receptionist. “Everyone can hear it ringing, and I want everyone to jump to it,” Miller says. “I don't want customers to have to wait for service.” Hoferer points out that Miller practices what he preaches, too. “John is very personally dedicated to service as a hands-on owner. He's usually the first one here and the last to leave. When the rest of us see that, weíre all striving to do the same thing.”

Orange Coast chooses to stock more inventory than a lot of other companies do. According to Miller, “Many people these days are afraid of stocking a large amount of equipment inventory, but we believe that if you have it, you're more motivated to sell it. If youíre staring at it every day, then you know it has to move.”

Orange Coast Petroleum Equipment has operated out of its headquarters location in Orange, California, for more than 20 years.

Marketing
In addition to its customers, Orange Coast also relies on its strategic partnerships for support. “The only thing that we truly create is an environment for service. We're only as good as the companies we partner with for goods and services,” Hoferer says. “We want vendors who will stand up for their product and be willing to help market it.”

As a small company, Orange Coast doesn't have the budget for a lot of marketing, so it relies almost exclusively on word of mouth. The company has tried product catalogs, mailers and phone book ads, with varied results. So the logical next place to try is online, right? Not so fast, says Hoferer. “The Internet plays a very minor role for us right now. Some petroleum companies have set up shopping Web sites, but we honestly don't believe that the users of this type of equipment are going that way.” The company has a Web site, but it is used more for informational purposes than anything else. “We are attracting some new customers through our Web site, but itís never going to be our core business. Our customers arenít going to a Web site to figure out how to run a pump,” Hoferer says.

It all adds up to hundreds of satisfied customers. “I think customers are drawn to our style of doing business, and it creates greater loyalty. A lot of them tend to ask if we're hiring, because I think the environment and the service we portray are things they want,” Hoferer says.

At Pelican Hill Golf Club in Newport Coast, California, Orange Coast converted a trash dumpster storage area to an aboveground fuel storage and dispensing area. The equipment includes a 2,000-gallon tank for gasoline and one for diesel. Both tanks are outfitted with suction pumps and remote dispensers which are tied to a fuel management system.

A Bright Future
Hoferer and Miller see things in the industry such as consolidation, shrinking margins and intensified competition, but are not deterred. “Our future is bright,” Miller says. “We're sticking to our niche, trying to stay below the radar and working hard, so I think good things are coming.” He's not sure exactly what that entails, though expansion is a possibility. “We likely will add people, but we want to make sure that anyone who comes on board wants to be here and is someone we want to keep.”

Orange Coast employees are getting themselves up to speed on new biodiesel and other alternative fuels and equipment that will be impacting customers in the coming months and years. The company is continuously looking for new products to sell and avenues to sell through. “We've found a couple of new focuses, such as fuel management and control systems,” Hoferer says. “As the price of fuel rises, people are putting in better equipment along with more safety and security measures, so we're preparing ourselves for that.”

If the past is any indicator, Orange Coast will be successful at whatever comes its way.

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The PEI Journal • Third Quarter 2008 • Volume 2, No. 3 • Contents are Copyright © Data Key Communications, Inc.
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