Increasing residential propane sales may mean adjusting your approach
Does your present business model fully support residential propane growth by maximizing the number of burner tips in existing homes and in new homes being built? Don’t let your energy competitors, mainly electricity, continue to gain market share because you have turned your back on the challenge. You should feel responsible for the shrinking residential market and not wait around for your propane competitors to solve the problem for you. Here are some ideas that can turn energy switching in your favor.
Review your business plan to make sure it supports all residential uses of propane. You should be actively looking for ways to stop energy switching in your current customer base and working to make sure that homes being efficiency upgraded or newly built are using propane in all available applications. One or a combination of the 3 following burner tip business models will help you accomplish this.
Sell, install, and service residential propane burner tips. The residential propane burner tips inside the home are the big 5: heating, water heating, cooking, clothes drying, and fireplaces. Rough estimates are that only10-15% of propane marketers fall into this category of sales, service, and installation. Marketers offer various excuses why they aren’t into this level of commitment, including lack of trained employees, licensing issues, liability, and service issues, and the list goes on. Yet, I can name many propane marketers who sell, install, and service propane appliances and heating equipment and do it well. Some of the marketers only sell zone heating equipment, such as wall furnaces and smaller space heaters, while others have a complete HVAC department that installs forced air furnaces and air conditioners, boilers, and other types of heating and air conditioning systems. Sometimes this business is under a separate corporate or LLC umbrella so the business can be more closely monitored. The hearth shop concept is also popular with some marketers where they deal mostly in gas fireplace projects and higher end outdoor cooking equipment. Many propane marketers abandoned appliance sales when big box stores came on the scene. Big box stores have some of this business, but not every consumer wants Chinese cheap products and service and installation from someone they don’t know. Your propane customers trust you and the services you offer or they wouldn’t be buying propane from you. Selling, installing, and servicing residential propane burner tips is the best way to control the controllable and add more burner tips and related usage to the residential tanks you have in the field. Finance plans and other promotions can increase your customer loyalty and referrals.
Partner with contractors to sell, install, and service residential propane burner tips. There are various levels of commitment in this model depending on the relationship you have with installation and service contractors in your area. It allows you to be in the sales, installation, and service business with a hand-picked partner you and your propane customers can trust. A popular arrangement is to have more complicated and lengthy installations handled by the contractor partner, while the original sale and service after the sale is handled by the propane company service personnel. This arrangement can take advantage of the strengths of both companies and bring added referrals.
Promote consumer awareness, favorability, and purchase of residential propane burner tips. This is the easiest business model to implement but very few marketers are as active as they should be. In fact, most marketers, big and small, are sitting by the sidelines while their energy competitors, especially electric, are eating their lunches and lowering their per customer usage rate. Yet there are more effective, low cost ways to promote increased burner tips than ever before. Some propane companies don’t go inside a customer’s home because of liability fears but that shouldn’t stop them from promoting consumer awareness, favorability, and purchase of residential appliances and other burner tips from qualified contractors in the area. Propane companies have web sites, social media, email, PERC marketing materials, and good old fashioned statement stuffers they can use to promote the value of more propane burner tips in the home even if they don’t sell, install, and service.
The NPGA Benchmarking Council has committed to an internal benchmarking study of the service business at each of their member companies in 2013. Member company service business involvement follows the general pattern, ranging from near zero to some very sophisticated sales, installation, and service operations. Members are looking for ideas on making their service a more profitable part of their business and maybe they will be able to add some burner tips too.
Tom Jaenicke is the owner and principal advisor at ATomiK Creative Solutions, LLC, a company that provides marketing services, technical advice, continuing education solutions, and business development assistance to energy companies and support organizations. He can be reached at 810 252‑7855 or email@example.com.