How can I alleviate a painful heel induced blisters on my feet?

Blisters. Are from friction (rubbing). Instead of focusing on how to treat them, focus on preventing them. How your shoe fits and what rubbing is going on is best addressed by a podiatrist. Shoe modifications, certain pads, and using a sock liner to absorb the friction are some of the approaches to this.
See below. Cleanse the area with alcohol or betadine. The use a sterile needle(hold a needle over an open flame for a few seconds) and slowly puncture the blister at its highest point. The fluid should flow out. Apply dry dressing. Now if you are diabetic i would advise you to seek medical personel treatment.