HeizOel24: Hotting up the turnover with more payment options

HeizOel24 is a home heating oil online comparison and shopping portal which Marc Lorbeer and Oliver Klapschus, who had already been friends for many years, founded in 2005. The Berlin-based company compares the prices offered by over 500 registered home heating oil retailers on a daily basis, and shows consumers the cheapest offers for that day. They can then place their order directly via HeizOel24.

With its online portal, HeizOel24 has improved the purchase and financing of home heating oil for consumers in a way hardly anyone would have thought possible at the time of the company’s establishment in 2005. Back then, the rather conservative home heating oil industry considered the internet a passing hype, just like Bill Gates once did. Today, the company’s figures prove that its two founders were definitely on the right track:

The portal receives over 30 million price enquiries every year. In consequence, HeizOel24 has been able to sell 1.7 million deliveries of 4 billion litres of home heating oil, so far. The portal’s other key figures are also impressive:

700.000
customers in the DACH region
+ 5,5 Mio.
home heating systems supplied
10 %
market share in total
20 %
growth per annum

HeizOel24 has retained its instinct for digital innovations to this day: With meX, for example, they have created an app that is a domestic oil tank monitor and oil purchasing manager rolled into one for total home heating oil consumption and restocking control and flexibility.
The two founders now also run the online portal HeizPellets24, where the increasingly popular fuel wood pellets is marketed in the same way. The two heating experts are therefore definitely on course for continued growth. Read here how they did it, and all about the role that Ratepay played in the process.

The initial situation: Home heating oil purchase only with inflexible types of payment

For many years, it was a fuel trade tradition that consumers were able to directly pay the fuel tanker driver for their home heating oil delivery. In cash, and eventually, once this was technically possible, via debit card. The disadvantages are obvious: As home heating oil deliveries usually consist of an entire year’s supply, the order prices are high. For a detached home inhabited by one family, a bill amounting to several thousand euros is the norm in this context.

People who paid cash had to have sufficient funds in their account at the precise point in time of their fuel delivery to be able to withdraw a large sum. People who used their debit cards soon reached their debit card limit. In short: Paying the total amount due to the driver was often difficult to organise.

Too inflexible: Payment in instalments involved a lengthy credit score check

At some point in time, the home heating oil retailers then began to offer their customers instalment payment models. However, the application process involved a credit score check. Consumers therefore lost valuable time by waiting for an answer for days. In the meantime, the daily changing oil price was usually already at a different level again, and the only recently applied for credit limit no longer matched the new oil price. This was no different for buyers who applied to their usual bank for a classic consumer credit: The processing times regularly prevented the consumers from buying precisely the right amount of home heating oil at the point in time that was most favourable for them.

Also too inflexible: The heat account

The next step was a “heat account”. It worked like an ordinary savings account which the consumers held directly with their chosen home heating oil retailer in order to save up money for their future fuel purchases. However, heat accounts also failed to provide sufficient financial scope. Plus, the customers’ cash was in the hands of the respective retailer only. Price comparisons, ordering from cheaper competitors or changing retailers for good were therefore hardly realistic options at the point in time when they had to buy their home heating oil, of all times. The time had come for a solution that broke the tradition of such inflexible payment models.

To be more specific, what was needed was a one-click solution that gave consumers the option of placing a binding order for precisely the amount of home heating oil they wanted at the price applicable on that day, and to then also pay for it at precisely the point in time that was perfect for them. Without being uneconomically tied to one retailer, without lengthy financial situation checks, without artificial debit card limits and independent of their current bank account balance. With Ratepay, HeizOel24 was able to move forward into exactly this direction…

New payment solutions make buying home heating oil easier

Phase 1: The payment innovation in the domestic fuel industry

Ratepay came on board in 2014, initially with the aim of facilitating the technical processing of the monthly instalment payments, as an in-house developed solution for this payment type would have meant a far too high resource investment for HeizOel24.

This way, HeizOel24 managed to reduce the several days the lengthy credit score check usually took down to a few seconds for instalment payments, as Ratepay checked the shoppers’ credit scores in real time with the aid of artificial intelligence or also risk fraud engines at the checkout. With this option, consumers were able to complete their online order straight away, provided their credit score was positive. So far, so easy.

However, there have always been and still are some unusual aspects to the purchase of home heating oil. An off the shelf payment solution would have been forced to admit defeat at this point, at the latest. We, on the other hand, tailor-made our payment solution for a specific purchase process:

In the area of home heating oil, it has never been possible to work with fixed carts. If someone orders a specific amount of oil, they are unlikely to actually be supplied with precisely this amount on the day of delivery (usually 4-8 weeks after the order was placed). Depending on the actual level of fuel in the domestic oil tank, the originally ordered amount is often either exceeded or lower. Sometimes, the amount ordered is also inadvertently exceeded by one or two litres due to the fuel tanker’s strong pump output. In all of these cases, the fixed final price has to be corrected subsequently. If it exceeds the original final price by 10%, another credit score check is necessary. This check must also not be carried out at the same leisurely pace as a credit score check for an ordinary loan application.

All of these details had to be taken into account in technical and process terms during the implementation of the monthly instalment payment option. These special requirements could only be met and resolved with the aid of comprehensive customisation.

“Ratepay offers precisely the tailor-made solutions that we need, and is also willing to go the extra mile with us with regard to development.”

Oliver Klapschus
Geschäftsführer HeizOel24

Phase 2: Everything works a treat

The cooperation suddenly hit a stumbling block in the summer of 2020. Although Ratepay already dealt with the technical side of the monthly instalment payments for HeizOel24 at this point in time, the partner finance provider up to then had been the Wirecard Bank. Monthly instalment payments for the purchase of home heating oil had to be stopped at short notice and reorganised to allow the consumers to pay for their fuel in instalments again as soon as possible, and to ensure that HeizOel24 was able to provide its partners with their original security of reliably placed orders.

Due to the many years of cooperation with Ratepay, HeizOel24 soon came to the decision that we would be their new partner when it came to the finance aspect. In the course of this, we not only took over the entire monthly instalment payment process but also the payment on invoice and via direct debit processes. Thanks to the always secure payment flows and the open communication, the system change was completed in no time at all, and the companies were in a position to continue to offer their raw material on HeizOel24 with the payment in instalments option. The retailers were therefore able to carry on with their cooperation with HeizOel24 as usual – and they are continuing to do so to this day.

„Nach Wirecard mussten wir den Heizölkauf in monatlichen Raten komplett neu organisieren. Das ist uns dank Ratepay perfekt gelungen.“

Marc Lorbeer
Geschäftsführer HeizOel24

Even more growth

HeizOel24 even utilised the relaunch of this payment option to kick-start some new positive developments and has since then been on course towards even further growth: Marc Lorbeer and Oliver Klapschus have also run the comparison platform HeizPellets24 since 2010.

Again, the figures speak for themselves: Three hundred pellet retailers are listed with the portal, which now receives over 2 million price enquiries every year. In the course of more than 100,000 deliveries, 500,000 tons of wood pellets have already been delivered to 50,000 GERACH customers, fuelling over 400,000 pellet heating systems. This equals a market share of ten percent. HeizPellets24 has recorded an average annual growth of 25 percent, so far.

Of course, Ratepay is also involved – to ensure reliable and fast payment processing in an industry sector where consumers must be able to respond fast to price fluctuations with flexible carts and without finance limits in order to provide their families with a warm and cosy home.

 

Outlook

HeizOel24 is currently considering the introduction of a further payment option at its checkout: A buy now, pay later model that offers the option of paying up to 60 days later. The reason for this: Experience has shown that home owners tend to be forced to also raid their holiday savings account to have sufficient funds to spend at the right point in time.

With the option of paying 60 days later, HeizOel24 intends to give its customers more financial flexibility. They can therefore still go on their well-deserved family holiday even after a spontaneous home heating oil purchase. We think that’s a lovely idea, and of course, we would also like to be on board for this project.

 

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