Increasing residential propane sales may mean adjusting your approach

February 8, 2013 By    

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.

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 three 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 five: heating, water heating, cooking, clothes drying and fireplaces.

Rough estimates are that only 10-15 percent 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. Yet, I can name many propane marketers who sell, install and service propane appliances and heating equipment, and do it well.

Some 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.

The hearth shop concept is also popular with some marketers where they deal mostly in gas fireplace projects and higher-end outdoor cooking equipment. Big box stores have some of this business, but not every consumer wants cheap Chinese products, or service and installation from someone they don’t know. Your propane customers trust you and the services you offer.

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. It allows you to be in the sales, installation and service business with a handpicked partner you and your customers can trust.

A popular arrangement is to have more complicated and lengthy installations handled by the contractor, while the propane company service personnel handles the original sale and service after the sale. 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 websites, social media, email, Propane Education & Research Council 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 its 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 adviser at ATomiK Creative Solutions LLC. He can be reached at 810-252-7855 or tom@atomikenergysolutions.com.

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