Energy consumers receive mixed messages when considering propane

August 17, 2015 By and    

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way.”

These famous lines opening Charles Dickens’ “A Tale of Two Cities” show oppositions that also exist in the retail propane industry. We should be in the best of times with our abundant long-term supply of domestically produced propane, significant propane price deflation expected to moderate prices well into the future and new technology bringing expanded uses of propane in traditional and newer markets such as autogas and commercial lawn mowing.

In the worst of times, we have been living with several years of Propane Education & Research Council (PERC) restrictions on consumer outreach, and we experienced other negative factors that have taken their toll on propane’s overall image.

Two winters ago, during a propane demand spike that should have matched up well with our increasing supply, the industry managed to work its way into an artificial shortage due to storage and transportation issues. The effects of the resulting propane price spike still linger, even though propane price deflation has dragged current wholesale prices to their lowest levels in decades. Our energy competitors, especially electricity and natural gas, have found propane to be easy prey, while we have struggled at times with reputation management. Even in the best of times, little things can drive perceptions about propane the wrong way.

For example, a recent unfortunate propane incident with a food truck in Philadelphia spawned a YouTube video by the natural gas industry titled, “Natural Gas: The Safest Cooking Fuel for Mobile Food Fleets.” As you might imagine, propane is the repeated target throughout the three-minute video. While you may think this is an obscure video, it has drawn almost 30,000 views. There has been only one response from our industry to debunk this video, thanks to Eric Sears from Auxier Gas in Ohio. The irony does not escape me that the natural gas industry points at propane as unsafe to use when the natural gas public utilities have billions of dollars of aging underground pipelines in need of replacement.

The natural gas industry, led by the American Gas Association, is transitioning to the best of times by mounting a nationwide effort to expand their residential and commercial customer base at the expense of propane and heating oil marketers. Natural gas public utilities have been successful in getting ratepayer subsidization plans passed in many states to divide the expansion costs among their current ratepayers. This classic corporate welfare tactic will prevent many propane marketers from ever experiencing the best of times.

The propane industry, led by PERC, is taking a more cautious approach to the best of times by weighing the options of what consumer outreach should look like in this post-restriction world.

In the meantime, your approach to the best of times as a propane marketer can accelerate by the development and execution of a marketing plan or by the adjustment of your existing marketing plan to give full consideration to the opportunities and threats in your marketplace. Ask yourself:

Do I have a company website that works?

Do I employ a search engine optimization program that ranks my business at or near the top?

Is it time to upgrade my content marketing through the use of social media, blogging and email marketing?

Do I need a more organized and effective approach to reputation management?

Should I try pay-per-click advertising to bring in new customers?

These questions reflect much of what propane marketers need to consider in the post-restriction consumer marketing world as part of an overall marketing plan. A lot has changed in the years that the propane industry has been off the air. Doing nothing is not an option if you expect your business to grow and prosper in the best of times. Tired old marketing plans may need much more than a simple makeover, or in the words of Charles Dickens:

“It is a far, far better thing that I do, than I have ever done.” 

Tom Jaenicke is vice president of propane marketing services for Warm Thoughts Communications. He can be reached at tjaenicke@warmthoughts.com or 810-252-7855.

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