Cultivate ‘customer intimacy’

“Customer intimacy” is not about knowing favorite colors or sports teams.

It’s about moving beyond good customer service to continually customize products and services to meet customer needs.

It’s one of three elements of the value disciplines model developed in the 1990s. “Operational excellence,” providing good products at a competitive cost, and “product leadership,” innovating leading products and services, are the other two elements.

Propane marketers who look at their business through the prism of the value disciplines model will quickly realize that product leadership, narrowly defined as propane, is not a strategic option (although renewable propane is an option that is available to the industry).

Many propane marketers pursue operational excellence and focus on keeping their costs as low as possible. The principal risk of this approach is that your profit margin already may be so small that you can’t really reduce your prices any further. It was that risk, along with changes in customers and their needs, that drove us to pursue customer intimacy.

Customer needs

How did the customer and her needs change? (That’s right – her. Almost two-thirds of our web traffic is female, and women control or influence more than 85 percent of household purchase decisions.)

There was a time when propane retailers had offices that were crowded with customers signing up for service, placing orders or making payments. These old-school customers are still around, as are classic customers who prefer to call you to conduct business. But they are a vanishing breed.

In 2011, about 30 percent of Americans preferred to be contacted by text instead of a phone call. By 2015, that number was over 70 percent, and it’s over 75 percent today.

Your customer doesn’t want you to call them, they don’t want to call you, and they especially don’t want to make a trip to your office. In fact, a recent study shows that almost two-thirds of customers would switch to a company that offers text messaging as a communication tool – unless, of course, your customer has a question. In that case, over 90 percent of them want to talk to you, and they don’t want to wait on hold long to do it.

Technology meets those needs

We have used technology and technology-enabled data, along with these unmistakable consumer trends, to move beyond good customer service. Here are a few examples:

1. We put a monitor on every company-owned tank, regardless of forecast method. This represented a tremendous cost, but our will-call customers can check their tank levels using our smartphone app, while competitors’ customers trek through snow up to their fanny, usually at night and in the cold, to check their tank gauges. Guess which of these images the 21st century customer prefers.

2. We use email to let will-call customers know it’s time to order gas. Our customers are busy, and maybe even distracted by jobs, family, friends and leisure. It’s hard to imagine a distraction from propane and propane-powered appliances, but trust me, you can reduce will-call runout rates if you remind your customers they need to order propane before it’s too late.

3. We use text messaging to confirm appointments and send reminders when we are on our way. Using a waitlist, your dentist keeps chairs full even when patients cancel at the last minute. We have stolen your dentist’s idea.

4. We prepare budget proposals for all of our active customers based on their specific usage history and trends. They also get to choose the day of the month for their budget payments. Their pricing includes a price cap, and we put them on auto-fill. We spend only a few hours preparing these custom proposals, and we don’t use the word “budget.” Participation has increased from a few dozen to hundreds of customers, and far fewer customers run out of propane because they wait too long to place an order because they couldn’t afford the large payment.

5. Our app and web portal make us available 24/7. We have seen a noticeable increase in after-hours ordering and payments. We also have noticed a significant increase in customer-executed phone number, forecast method and payment method changes. And they didn’t have to talk to us. Customers also sign up for our price protection programs on their own.

The combined impact of these examples is fewer runouts. We make thousands of deliveries each winter, and so far this winter can count our runouts on one hand. So far this winter, nearly 80 percent of our orders are either auto-fill or placed online or with our app. A much higher percentage of payments are made digitally.

The more than 60 percent drop in phone calls driven by this digital shift gives us plenty of time to answer over 80 percent of our phone calls in 20 seconds or less and keep average hold times under one minute, which makes our classic customers very happy. And there are no lines for the old-school customers who still want to come in and place their order.

The best part about customer intimacy is it has reenergized all of us. We already have a long list of potential improvements, including online service scheduling, to make the customer experience better.

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Christopher Caywood is a co-owner of Caywood Propane Gas Inc.