LP Gas

100-year-old gas distributor launches residential propane division

ILMO Propane increased its propane focus in 2011 on the residential market.

100-year-old gas distributor growing after branching into residential side

ILMO Products Co., with nine locations in Illinois and a 10th in St. Louis, has a 100-year-old company history. ILMO has a lengthy history with propane as well, having supplied the region’s industries with 33-pound forklift cylinders for decades.

The residential market was one ILMO did not serve until recently, though, when the company launched a propane division. As ILMO anticipated, launching a division with a totally different consumer type took significant time and preparation.

“The rest of the company primarily serves a business-to-business market,” says Blair Austin, marketing director. “Now, we’re providing the utility in people’s homes. We’re on their property to make fills.

“We wanted to make sure we understood the transactional process – paying, making fills,” she adds. “We don’t want to shut somebody’s heat source off in the middle of winter because they’re two months late on a payment. We developed internal policies so we knew how to handle a situation should one arise.”

In addition to learning the market, ILMO needed to develop a value proposition that separated it from other retailers across Illinois. According to Austin, ILMO’s value proposition to customers is unique in a few ways.

“One thing we’ve branded [against] is stuffing – unauthorized fills to prevent [a retailer] from filling your tanks,” she says. “A lot of people would shop around, and before they could make a decision to switch their supplier, the supplier would make an unannounced fill. We really want to simplify switching and not make it as complicated as some competitors do.”

Pricing is another angle ILMO promotes, but not in the way most retailers might think.

“We wanted to focus on promotional pricing,” Austin says. “We kind of base some things on what we all hate about the cable company. We don’t want to have a loyal customer at one price and offer a better price to someone who hasn’t done business with us before. We want to stay away from any kind of gimmick pricing.”

Emphasizing these areas has been beneficial for ILMO so far. The launch into residential has also been beneficial for ILMO’s 100 employees, Austin says.

“Now, the people in the company get to work with their neighbors,” she says. “They get to share our propane division with friends and family. We have an employee referral program, and for every 500-gallon-or-more customer who joins us that was referred by an employee, our employee gets $50. There’s no limit on that.”

Austin says some employees have earned nearly $1,000 this way helping ILMO promote the division, which has grown steady since forming in 2011.

“We want to grow profitably but also ensure that our customers are loyal and staying with us,” Austin says.

HEADQUARTERS: Jacksonville, Ill.

OTHER LOCATIONS: Decatur, Granite City, Litchfield, Mattoon, Mt. Vernon, Peoria, Quincy and Springfield, Ill., and St. Louis

FOUNDED: 1913

EMPLOYEES: 95, including four in propane operations

PROPANE SALES: 575,000 annual gallons

ONLINE: www.ilmopropane.com