By Matthew Wall on May 4, 2017 12:54:00 PM
At SafetySync, we're in a unique position of having a pulse on the current activity of the oil & gas industry. Our pricing model is a per user/per month cost, so as companies lay workers off we see the decreases in their worker counts which in turn affects our recurring revenue. When times are good, we see our existing customers increase their worker counts. The oil & gas industry currently makes up 50% of our customer base and that is trending down as our software becomes more and more prevalent in other industries. That's not to say that our software was built for oil & gas, but more that our software has the best adoption rates where there are government regulations on safety being pushed down on an industry.
We now believe that the oil & gas industry is picking up again substantially. Normally March and April are slower months for us, yet, we've seen some fantastic growth in those months. Our oil & gas companies have increased their worker counts upwards of 40% in the past 8 months. We might not be seeing the whole picture behind this, perhaps companies that use SafetySync have a much higher rate of getting new contracts ;-) Afterall, oil is still at a low of $50.
We did have a wonderful insight through this downturn and that was that while companies reduced their workforce they did not cancel their SafetySync subscriptions. A big selling point of our software is that when worker counts drop so does your SafetySync subscription costs. This ensures that companies no longer have to abandon safety software that has become too costly. Can you imagine if you had paid upfront for safety software then found your workforce had been substantially cut only to continue to pay exorbitant costs because of multi-year contracts? Our approach to cost ensured that we only had a few cases of customers closing their SafetySync accounts during the entire 2 year downtown. SafetySync continued to remain an integral part of our customer's businesses.
With our customers shrinking in size we did feel many times that we were swimming against the current. We sign up two dozen new customers and our revenues would still shrink as our existing customers shed workers.
Even if oil continues at this price(which we internally think it will), companies that can keep their operations lean and efficient will continue to succeed with this price point. EHS software that empowers your safety team to spend more time on the important things rather than in spreadsheets and file folders is key to that.