How to implement technology into your propane business

February 7, 2018 By    

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In the September issue of LP Gas magazine, I suggested that propane retailers ought to consider an “internet of things” approach to their businesses. While I didn’t directly say so, I held up Amazon as a company that had the best practices in the internet of things business model.

It’s easy to dismiss the internet of things model for the propane industry. After all, Amazon is mostly selling items like books, toilet paper, electronics and groceries. Purveyors of these goods do not have to visit the customer’s home to conduct gas checks, install tanks and regulators or educate customers on the use of the product (well, at least one would hope given my highlighted product list). They just leave the box full of goods at the door and move on to their next delivery.

If this logic sounds appealing to you, you may be leaving operating profit on the table, reducing the purchase price when you sell your business or both. In any case, unless you develop and implement a technology strategy, you are giving away value that could have been yours.

The good news is that developing and implementing a successful technology strategy is not as hard as you think, even if you (like me) don’t know much about technology. Here’s how we went about it at Caywood Propane:

■ First, figure out your basic business. We decided that our business focus, and therefore our technology, centers on the customer. Once we decided to be customer focused, we drew it out on an electronic napkin.

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Our customer focus, and therefore our diagram, may not work for you. Many retailers choose not to be customer focused. For example, low-price retailers may have a “one size fits all” model that focuses on keeping costs low and the delivery model as simple and easy to execute as possible. These retailers may have a very different diagram in which the customer might not even be in a circle.

■ Next, working with our simple, customer-focused diagram, we figured out which technologies were most important based on our strategic goals – to be reliable, transparent and value priced. Not all retailers can or want to pursue all three of these strategies. Sadly, there are some who don’t achieve any of them. In any case, we came up with a basic technology checklist, at left here, based on our strategic goals.

■ What we are left with, based on the diagram and our technology list, are our technology strategies. We have embarked on a generally (but not always) sequential implementation of our technology strategies, not to mention some ideas on how to tie it all together, which are ongoing, even today.

In future columns, I’ll describe in greater detail how we figured out which technologies to implement. I’ll even regale you with stories about some of the mistakes we made along the way and how we learned from them. In the meantime, get out your napkin and start drawing your own strategy.


Christopher Caywood is a co-owner of Caywood Propane Gas Inc. Contact him at chris@caywoodpropane.com.

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