Tag Archives: PERC

New Year’s resolutions for propane marketers

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Cre­at­ing small mea­sur­able steps for propane mar­ket growth    

Accord­ing to the lat­est Wikipedia def­i­n­i­tion, a New Year’s Res­o­lu­tion is a promise that you make to your­self to start doing some­thing good or stop doing some­thing bad on the first day of the year.  New Year’s res­o­lu­tions date back to pre-Christian times with the Baby­lo­ni­ans and Romans and have had reli­gious and moral over­tones.  It is esti­mated that over 40% of Amer­i­cans now make New Year’s res­o­lu­tions on small mea­sur­able steps that can be as sim­ple as lose weight, quit smok­ing, and vol­un­teer to help others.

New Year’s res­o­lu­tions can be an impor­tant part of the plan­ning process for your propane busi­ness too.  Res­o­lu­tions are not meant to replace a busi­ness plan, an annual mar­ket­ing plan, or your bud­get process, but res­o­lu­tions can help you find your range and set the tone for those more for­mal plan­ning processes.

Here are a few New Year’s res­o­lu­tions for your propane busi­ness that can make a difference.

I Resolve to:

• Stop using the words “switch” and “switch out” in my adver­tis­ing, as it applies to steal­ing cus­tomers from your propane com­peti­tors.  There is noth­ing wrong with adding new cus­tomers to your base by tak­ing cus­tomers from your weak per­form­ing propane com­peti­tors but using those words show a total lack of cre­ativ­ity and cheapen your growth efforts and our propane indus­try rep­u­ta­tion.  Your mar­ket­ing and adver­tis­ing should give com­pelling rea­sons why you are the best propane com­pany with which to do busi­ness and con­sumers will respond.  If you still feel you must strengthen your adver­tis­ing close, try sub­sti­tut­ing “upgrade” for “switch out”.
• Start learn­ing more about propane and my energy com­peti­tors.  Attend the Propane Expo in Atlanta and other regional and state events that have a strong edu­ca­tion com­po­nent.  Study the elec­tric­ity, heat­ing oil, bio­mass, and renew­ables mar­kets in your area.  These energy mar­kets dif­fer across the coun­try.  I find that energy web­sites, blogs, other social media, and my elec­tric bill pro­vide an abun­dant amount of use­able energy infor­ma­tion.  Few propane mar­keters I talk with even know their own local elec­tric rates, but they can tell me the per gal­lon price of propane for every com­peti­tor within 50 miles.  That’s a good way to win small bat­tles but lose the war.
• Pro­vide more train­ing for my employ­ees.  If you want to cre­ate a healthy team spirit at your com­pany and have a safer and more suc­cess­ful propane busi­ness, keep your employ­ees well-trained in their core areas of work and other aspects of the propane busi­ness.  CETP or equiv­a­lent train­ing, propane sys­tem instal­la­tion and main­te­nance train­ing, and appli­ance instal­la­tion and ser­vice train­ing offered by man­u­fac­tur­ers or dis­trib­u­tors are a few of the cur­ricu­lum areas that can improve your employ­ees’ skills, ver­sa­til­ity, and over­all worth to your com­pany.  Look to NPGA, your State or Regional propane gas asso­ci­a­tion, and appli­ance and equip­ment man­u­fac­tur­ers and dis­trib­uters in your area for pri­mary employee train­ing oppor­tu­ni­ties.
• Add more burner tips to my res­i­den­tial and com­mer­cial cus­tomers.  Your mar­ket­ing plan strat­egy and tac­tics should include the addi­tion of burner tips and result­ing gal­lons to your cur­rent cus­tomer base.  You can start with small steps like improv­ing your data base on the propane usage of your res­i­den­tial and com­mer­cial cus­tomers.  Every one of your cus­tomers has 5 pri­mary oppor­tu­ni­ties for propane usage inside their homes or busi­nesses.  You should know what form of energy your cus­tomers use for space heat­ing, water heat­ing, cook­ing, clothes dry­ing, and fire­places.  It is also help­ful to know the age and con­di­tion of that equip­ment.  Then you can work toward ways to increase the num­ber of those usage points per cus­tomer.  You can iden­tify propane usage by cus­tomer and appli­ca­tion in a vari­ety of ways, includ­ing GAS Check, cus­tomer sur­veys, new cus­tomer check lists, and ser­vice orders. Also, con­sider join­ing the Res­i­den­tial and Com­mer­cial Mar­ket Growth Group, a newly formed work­ing group of NPGA mem­bers that includes propane mar­keters, appli­ance man­u­fac­tur­ers and dis­trib­u­tors, and State Exec­u­tives.  This still evolv­ing group’s efforts to increase res­i­den­tial and com­mer­cial gas load are also sup­ported by PERC.  Con­tact Randy Doyle at rdoyle@blossmangas.com or me for more details.  Increas­ing the num­ber of burner tips per cus­tomer will increase your gal­lon sales and the value and sus­tain­abil­ity of your business.

Now is the time to think about what your New Year’s res­o­lu­tions should be for your propane busi­ness.  Hope­fully you have been inspired by some of the above.  You may be sur­prised at how much these small steps can pos­i­tively influ­ence your over­all busi­ness strat­egy and for­mal plan­ning process.

May you have a Merry Christ­mas, Happy Hol­i­days, and a Pros­per­ous New Year!

 

What is your burner tip business model?

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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 tom@atomikenergysolutions.com.

 

PERC Training Courses Reach Construction Professionals

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The Same Train­ing is Start­ing to Catch on With Propane Mar­keters too

The Propane Edu­ca­tion & Research Coun­cil (PERC) is its 5th year of build­ing an arse­nal of train­ing courses for con­struc­tion pro­fes­sion­als.  Orig­i­nally the courses were designed to train archi­tects about propane and the ben­e­fits of related appli­ca­tions.  The propane indus­try had long felt that archi­tects were an impor­tant first step in the res­i­den­tial and com­mer­cial con­struc­tion process but had no way to reach this audi­ence.  The aver­age propane mar­keter can be intim­i­dated by the archi­tect com­mu­nity and unsure of the role they play in energy deci­sions.  PERC took the smart approach and did research to qual­ify the archi­tects as energy deci­sion mak­ers and find out the best ways to reach them.  The research showed that archi­tects need con­tin­u­ing edu­ca­tion to main­tain their State license and are espe­cially recep­tive to online train­ing.  It was also noted that no other energy provider was pro­vid­ing this type of energy related train­ing to archi­tects.  With the door wide open, PERC stepped in the first year with one course on under­ground propane tanks and over 300 archi­tects took the course.  The propane indus­try went from –0– out­reach to reach­ing over 300 archi­tects the first year.

What does the train­ing pro­gram look like now?  The Propane Train­ing Acad­emy has been estab­lished online and cur­rently houses 22 free online courses on a vari­ety of top­ics includ­ing new tech­nol­ogy that PERC grants helped develop.  Last year almost 5,000 con­struc­tion pro­fes­sion­als, includ­ing res­i­den­tial and com­mer­cial archi­tects and builders, remod­el­ers, engi­neers, and HVAC and plumb­ing pro­fes­sion­als signed up for the courses.  Included in those num­bers are 200 propane pro­fes­sion­als who found the train­ing a valu­able resource for con­nect­ing to the con­struc­tion mar­ket and propane end users.

PERC is able to cap­ture infor­ma­tion dur­ing the train­ing reg­is­tra­tion process and the amaz­ing results point out the true value that this train­ing is bring­ing to the propane indus­try.  An over­whelm­ing 70% of the con­struc­tion pro­fes­sion­als sign­ing up for the courses plan to build with propane in the next 12 months.  Of the builders with no pre­vi­ous expe­ri­ence in build­ing with propane, over half of them plan to build with propane in the next 12 months.  This points to the effi­ciency and effec­tive­ness of train­ing the con­struc­tion com­mu­nity and will result in incre­men­tal sales and gal­lons when you con­nect with those builders in the field.  All of the con­struc­tion pro­fes­sion­als train­ing with PERC at trade shows, through Buildwithpropane.com, and the Propane Train­ing Acad­emy are posted as leads on the Propane MaRC.  Find them and cre­ate new gallons.

Train­ing for your­self and your employ­ees can make a dif­fer­ence in the way you approach the chal­lenges before you.  Much of the coun­try had an unusu­ally warm win­ter that is now quickly turn­ing into sum­mer.  Warmer than nor­mal tem­per­a­tures, the con­tin­ued weak econ­omy, accom­pa­ny­ing con­ser­va­tion, and propane prices sig­nif­i­cantly higher than the pre­vi­ous win­ter have brought gal­lon sales down 20 to 40 per­cent for many propane retail­ers.  Some of those gal­lons are likely to come back with a nor­mal win­ter and an improved econ­omy but some gal­lons are gone for­ever.  For some retail­ers it may be time to face the real­ity that it is time to make a choice; down­size my busi­ness or cre­ate new gal­lons.  Cre­at­ing new gal­lons means cre­at­ing new users and increas­ing the num­ber of propane appli­ca­tions with cur­rent users.  That is true propane mar­ket expan­sion in the energy sec­tor, ver­sus steal­ing cus­tomers from your weaker propane com­peti­tor.  Cre­at­ing new propane users is a strat­egy while steal­ing cur­rent users is a tac­tic. While you may have oppor­tu­ni­ties in your mar­ket­place to use that tac­tic, it shouldn’t be your only one.  Add train­ing for your­self and your employ­ees to your tac­tics list.  The train­ing avail­able at the Propane Train­ing Acad­emy should be incor­po­rated into your slower deliv­ery sea­son, if cre­at­ing new and expanded res­i­den­tial propane users is part of your strategy.

Make spring­time learn­ing time, not down time at your propane busi­ness.  The train­ing avail­able at www.buildwithpropane.com/training will make propane retail­ers bet­ter pre­pared to sell to the con­struc­tion com­mu­nity and to end users.

 

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 tom@atomikenergysolutions.com.

Taking Propane to the House

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Time to con­nect with the res­i­den­tial con­struc­tion industry

Ignor­ing your res­i­den­tial propane busi­ness and pre­tend­ing it will get bet­ter some day with­out your help is no longer an option, unless you are only in your busi­ness for the short term.  Charg­ing higher mar­gins and other oner­ous penal­ties (in your customer’s eyes) like tank rent and deliv­ery fees to make up for short gal­lon through­put per cus­tomer will only carry you so far before you run out of excuses for your banker or your Board of Directors.

Let’s look at some other rea­sons why your res­i­den­tial cus­tomers are not using as much propane as you want them to use.  The res­i­den­tial propane busi­ness has been under down­ward pres­sure from sev­eral dif­fer­ent fronts includ­ing con­sumer con­ser­va­tion due in part to a weak econ­omy, energy switch­ing (to elec­tric­ity, renew­ables), adop­tion of stricter build­ing codes, higher effi­ciency heat­ing equip­ment and appli­ances, a weak home build­ing mar­ket, and a dis­tinct com­mu­ni­ca­tions gap between propane mar­keters and con­struc­tion professionals.

The future is not going to get any eas­ier as both energy codes and heat­ing sys­tem effi­ciency stan­dards undergo his­toric changes in 2012–13.  The spread­ing adop­tion of energy codes which are 30%+ more strin­gent than even 2006 codes and a new fed­eral reg­u­la­tion that will man­date high effi­ciency fur­naces and heat pumps in all US mixed and cold cli­mates will bring impli­ca­tions for propane that include:

• Smaller capac­ity heat­ing sys­tems
• Lower propane con­sump­tion rates for heat­ing due to equip­ment effi­ciency and enve­lope improve­ments
• Increased impor­tance of water heaters as an anchor appli­ca­tion in the home
• Increased impor­tance of smaller propane appli­ca­tions in the home
• Oppor­tu­ni­ties to gain mar­ket from heat­ing oil fur­naces, which also face effi­ciency hikes
• Increased chal­lenges from elec­tric heat pump sys­tems (air-source, ground source, mini-split), in both new and exist­ing applications

Add to these chal­lenges the fact that the aver­age home with propane as a pri­mary energy source is already down to less than 2 propane appli­ca­tions of the 5 indoor appli­ca­tions avail­able.  Over half of those homes have an elec­tric water heater.

This long list of chal­lenges sum­ma­rizes the need to re-energize your rela­tion­ship with con­struc­tion pro­fes­sion­als.  This means devel­op­ing or strength­en­ing rela­tion­ships with builders, remod­el­ers, heat­ing & cool­ing con­trac­tors, and plumbers serv­ing your propane mar­ket.  While it may be sev­eral more years before the hous­ing mar­ket and the econ­omy return to nor­mal lev­els, con­struc­tion activ­ity has started to come back in pock­ets across the coun­try. This is doc­u­mented by the NAHB/First Amer­i­can Improv­ing Hous­ing Index pub­lished monthly by the National Asso­ci­a­tion of Home Builders (NAHB) and other sources.

There is no bet­ter time to let con­struc­tion pro­fes­sion­als know all the rea­sons why propane should be their pre­ferred energy choice when build­ing, remod­el­ing, or per­form­ing effi­ciency upgrades for their clients.  The Propane Edu­ca­tion & Research Coun­cil (PERC) has pro­vided propane mar­keters with a great vari­ety of mar­ket­ing mate­ri­als and tools geared toward the build­ing com­mu­nity.  There are research reports, train­ing courses, fact sheets and more that can pro­vide energy answers for you and the con­struc­tion pro­fes­sion­als with whom you work.  Join and become active in your local Home Builders Asso­ci­a­tion and make sure your State or Regional propane asso­ci­a­tion is doing its part in clos­ing the com­mu­ni­ca­tion gap with the con­struc­tion com­mu­nity.  A good place to get the big pic­ture is by attend­ing the NAHB Inter­na­tional Builders Show in Orlando, FL on Feb­ru­ary 8–11, 2012.  Con­tact Aisha Parker at the PERC office and sign up to spend some time in the gas indus­tries booth that the propane indus­try shares with the Amer­i­can Gas Asso­ci­a­tion and gas prod­ucts man­u­fac­turer partners.

Expect PERC to put a big push on Tak­ing Propane to the House in 2012 to fos­ter direct engage­ment between you and your con­struc­tion pro­fes­sional clients.  With approx­i­mately 70% of all retail propane sales being used in build­ing struc­tures you could say that you are not in the propane busi­ness – you are in the build­ing busi­ness.  It is time to pay more atten­tion to it…..unless you are just in it for the short term.