Won't you just be measuring the temperature of the outside of the tank? Presumably it's insulated, so it will only be warm.
If you want the temperature of the water, try attaching the sensor to the outlet. If it's a metal fitting there then heat will be conducted from the interior along the outlet pipe so you'll get a better idea of the water temperature. When someone opens a tap then the outlet pipe will even more accurately represent what's inside the tank.
Ideally you'd put the sensor inside the tank, but unless the tank already has a thermowell or some other means of getting it in there you probably don't want to do that.
If you insist on putting the sensor on the outside, what about a strap running around the tank and pulling the sensor against it?
My circuit's dead, there's something wrong.