The digital revolution and its impact on the propane industry

December 26, 2015 By    

LPG0116_digital-technologyIt’s everywhere – from our desktops at work, to the restaurants where we have lunch, to our own hands.

There’s no denying that digital technology has a power over our day-to-day lives, whether we’re working, eating, relaxing or even sleeping. It’s grown exponentially in the business world – and the propane industry is no exception.

“Historically, IT automated, integrated and re-engineered operational processes,” Mark McDonald and Andy Rowsell-Jones of Gartner Inc. write in an article on Forbes.com. “That reduced costs, increased scale and transformed operational practices, but it did little to drive growth.”

New technologies, however, are changing the way businesses perform, operate and function unlike ever before.

“Digital technologies such as mobile, social media, smartphones, big data, predictive analytics, and cloud, among others, are fundamentally different than the preceding IT-based technologies,” the authors write. “Newer technologies touch the customers directly and, in that interaction, create a source of digital difference that matters to value and revenue.”

So, how is digital technology propelling change for the propane industry, and how have some companies altered their growth and marketing strategies to incorporate these technologies?

Going digital

It isn’t a fast process, but the digital technology revolution is making headway into the propane industry.

Co-Alliance LLP, an Avon, Ind.-based agribusiness and energy marketing and supply cooperative, is one company increasing its presence in the digital realm.

“A year and a half ago, we decided we needed to make a real push to key in on our residential retail propane [business] and appearance in the cyber world,” says Mike Hayden, propane manager for Co-Alliance.

The company launched a new website that included online bill pay – a key driver for traffic, Hayden says. Co-Alliance spent more than a year securing its website’s online bill pay, but it’s paid off.

“We had some predicted numbers that we wanted to hit in the first few months, and we have surpassed that,” he says. “There’s a lot of desire for the customer to be able to sit at their coffee table at 8 o’clock at night and make a payment, and not be reliant on us having office hours.”

What digital marketing tools does your company manage?

Paraco Gas is another company advancing its website to improve customer satisfaction. For many years, the company had a static site. Over the last couple of years, it’s focused on advancing its website to answer questions and build customer relationships. The return on investment has been apparent for the company.

“We have seen a significant rise in the number of leads that we’ve gotten,” says Mike Gioffre, president of Paraco South. “The calls that are coming into our call centers have gradually reduced, and customers are using this digital tool to try to get information versus making the phone call. We’ve seen a return in terms of customer satisfaction and in terms of lead generation, and that’s resulted in a good increase in the number of sales that we’ve made, as well.”

Online bill pay and a live chat are two popular functions on Paraco’s site, Gioffre adds.

More often, companies are updating their websites to inform, educate and engage their customers. Maintaining a website is not a static job, though. Companies must have someone monitoring their websites to ensure the information is dated and respond to customer questions or concerns.

If they are used correctly, websites can benefit propane businesses, says David Lowe, sales consultant at Pro Image Communications.

This requires an investment and time, Lowe says. He suggests having a reputable outside company design the website. Once the website is complete, the propane company must monitor website analytics to determine the return on investment.

“You have to make it easier for the customers – not the propane company,” he says. “They [customers] should be able to order fuel, fill out a credit application and return it, make a payment, ask questions and receive a timely response [on a propane company’s website].”

Paraco uses both internal and external resources to keep its website updated on weather conditions, safety practices, traffic and delivery schedules.

“Our site is not a static site at all,” Gioffre says. “We try to keep it as relevant and as current as possible.”

 

What are some elements you should include in your website? Hover over the black circles to find out.

 

What’s trending?

Co-Alliance also recently started a Facebook page – a growing trend among propane businesses.

In an LP Gas magazine survey taken by more than 30 propane retailers, about 72 percent of respondents have a Facebook page, and a number of these companies utilize other social media platforms, including Twitter, Instagram, YouTube, LinkedIn and Google+.

 

What types of social media accounts does your business have?

Paraco works with an outside company to execute its social media strategy, but it also generates its own content.

“Social media is everywhere you look now, and you have to make sure you present something the customer can relate to,” Gioffre says.

Paraco has a presence on Facebook, Twitter, LinkedIn, Pinterest and Instagram. Facebook and Twitter are the largest platforms for the company. The company posts aggregated content from the Propane Education & Research Council, feel-good stories and more.

Although social media poses challenges, the benefits are innumerable, especially when the next generation of customers and workforce relies heavily on digital technology to make decisions.

“There is this current expectation in that generation that you should be able to research a company or get a sense of who they are by their social media presence,” says Ben Gutkin, vice president of marketing services for Warm Thoughts Communications. “People make decisions based on the sense they get from a social media page.”

One of the challenges of social media is determining the return on investment. A mistake many companies make is trying to measure how many new customers they get from Facebook.

It isn’t meant to work that way, though, Gutkin says.

“[Social media] is more about brand and relationship building than it is about actually making sales,” he says. “It is part of an overall communication strategy and not part of a direct customer acquisition strategy.”

Paraco takes a similar approach when using its social media platforms.

“You want to get new customers, but you want to retain the existing customers you have,” Gioffre says. “We are quite active in the communities in which we serve. Therefore, we lean on our social sites to share our initiatives and further engage our customers at the local level. There’s just no other way to do that.”

Holding back

marketer-infoThe transition to the digital side of business isn’t the solution for some companies, though.

According to the LP Gas magazine digital technology survey, 12 percent of respondents don’t have company websites, and about 22 percent don’t use social media.

Lowe says print media has been the most successful marketing strategy for propane companies, based on results he’s curated.

Although Lowe has noticed a higher success rate for print media, he’s seen more companies generating websites and opening social media accounts.

“I think every company should have a website and do some level of activity with it,” he says.

But, like anything else, a propane company has to determine what it wants to get out of a website.

“A webpage certainly has a place, but you have to be realistic about what your expectations are and what your investment is going to be,” he says. “That’s where the disconnect is.”

Pro Image’s clients are also expressing increased interest in social media – however, Lowe says, the return on investment hasn’t been high.

“There’s considerable interest in investing in social media,” Lowe says. “We find the companies fail to produce documentation as to the success or failure of the social media [campaign], whereas those that do the print advertising and marketing, from our experience, are much more capable and experienced at documenting the success or failure, which translates directly into the return on investment.”

Lowe attributes the lack of social media success to lack of measurement.

“Simply put: If you measure it, you can improve it,” Lowe says. “But when there’s a lack of measurement in social media, it’s difficult to improve it.”

Moving forward

Digital technology can’t be avoided. It offers countless opportunities for companies to connect with their customers, build relationships and expand their presence in the marketplace.

“I believe that customers want to communicate in real time,” Gioffre says. “They want answers quickly. They want to do it in the fashion they’re most comfortable with, whether it’s a phone call, an email, through a social site or through a website. I believe that we, as an industry, have to be able to respond to customers in a very different fashion than we did just a few years ago.”

Allison Barwacz

About the Author:

Allison Barwacz is the digital media content producer for LP Gas magazine. Contact her at abarwacz@northcoastmedia.net or 216-706-3796.

1 Comment on "The digital revolution and its impact on the propane industry"

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  1. Stan Larson says:

    You have to keep up or lose out !!!!