How propane stands next to the Diffusion of Innovation Theory

December 16, 2015 By    
Click to enlarge.

Click to enlarge.

E.M. Rogers developed the Diffusion of Innovation Theory in 1962 to explain how ideas and products gain momentum and spread over time. Rogers’ theory classifies adopters into five categories: innovators, early adopters, early majority, late majority and laggards.

According to the theory, only 2.5 percent of all adopters are defined as “innovators.” “Early adopters” are the next to adopt ideas and products, and Rogers includes 13.5 percent of all adopters in this category. The “early majority” (34 percent) and “late majority” (34 percent) are the third and fourth groups to adopt innovation, respectively. Rogers classifies the last group to adopt ideas and products as “laggards,” and they represent 16 percent of the whole.

Propane Education & Research Council (PERC) representatives have cited the Diffusion of Innovation Theory in discussions about new propane markets that are underway, including autogas. Intrigued by the model and curious to learn how propane retailers categorize themselves as innovation adopters, LP Gas posed a question to them in its annual State of the Industry survey. The question: How would you characterize your retail propane company in terms of incorporating new opportunities that can grow gallons?

LP Gas’ survey results offered several takeaways. For starters, the percentage of retailers who classify themselves as part of the early majority (33.3 percent) is nearly identical to the percentage Rogers uses to define his early majority (34 percent).

The similarities stop there, though. About 15 percent of retailers consider themselves innovators, compared with Rogers’ 2.5 percent standard. Also, about 25 percent of retailers consider themselves early adopters, compared with Rogers’ 13.5 percent standard.

Data LP Gas collected regarding the late majority and laggards doesn’t mesh with the Diffusion of Innovation Theory, either.

So, what does all of this analysis reveal? The takeaways are arbitrary, really.

Maybe retailers who consider themselves innovative aren’t really innovative at all. Maybe retailers give themselves too much credit as propane technology adopters. Maybe retailers should be more aggressive about incorporating new ideas and products into their businesses.

Another thought: Maybe the Diffusion of Innovation Theory is flawed. Or, perhaps the theory is correct, the data retailers shared is accurate and the industry simply adopts technology differently than others.

Kevin Yanik

About the Author:

Kevin Yanik is the senior editor of LP Gas Magazine. Contact him at kyanik@northcoastmedia.net or 216-706-3724.

1 Comment on "How propane stands next to the Diffusion of Innovation Theory"

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  1. Alex Spataru says:

    Excellent article. After close to three decades of work w/propane dealers I would agree that most are risk-takers and optimists. The propensity for risk-taking is one reason why the industry performs so poorly vs. the natural gas distribution industry in terms of safety – while providing essentially the same portfolio of services. That self-perception can also account for why they perceive themselves as “early adopters” in greater numbers than the Rogers percentage. They are optimists because they keep hoping that next year will bring more gallons sold (which BTW, is the wrong metric). They are optimists because those who run the industry’s R&D keep thinking that autogas has a future. It doesn’t. PERC has already spent way too much for minimal results. By any form of investment metrics – the returns vs. the money invested in auto gas has been a failure. How does the industry justify that after all the money spent there are now less LP Gas powered vehicles than 10 years ago? The natural gas industry has spent much more money on autogas than the LP Gas industry ever could – and they are still losing the battle vs. electric vehicles. And CNG auto fuel contains significantly less contaminants than auto LP Gas – so only an uncurable optimist would continue pushing autogas. Conclusion: Your survey makes sense. Keep up the good work!