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Higher energy prices hurt us all

February 22, 2022 By    
Photo: StudioMars/iStock/Getty Images

Photo: StudioMars/iStock/Getty Images

All energy prices have surged in recent months, and propane is no exception.

Your propane customers are reminded about it when they get their propane bills or when filling up at the gas pump. They hear about natural gas price spikes and history-making crude oil prices, and even electricity prices are increasing at a fast pace. When energy prices plateau a bit during renewed COVID-19 concerns, they seem to bounce right back.

The U.S. Energy Information Administration has confirmed that energy commodity prices ended 2021 59 percent higher than the beginning of the year. This compares to a 20 percent increase in the prices of other commodities measured. It has been years since the propane industry has had to deal with this kind of price fluctuation, so we may be out of practice when it comes to communicating with our customers.

Do your customers think you and your company are benefiting from increased propane prices, or are you letting them know you share their pain? Your customers may not realize that overall inflation is affecting the entire propane supply chain, and higher propane prices do not mean you are pocketing higher profits.

Key messages

Being declared an essential industry by the government does not protect you from inflated operating expenses. Your delivery truck fuel and equipment and supply costs are rising, and it is a challenge to keep healthy employees on the job during COVID-19 outbreaks.

Higher propane bills mean many customers try to cut back on propane usage, stretch out payments and consider alternate energy sources for the short or long term. For you, that means added challenges with accounts receivable, predictive demand and reaching overall business goals.

If you haven’t already done so, you need to communicate with your propane customers and empathize with them about propane prices and high energy costs in general. Let them know that the sooner energy prices drop, the better it will be for all of us. Depending on your individual company situation, your messaging points, in general, should cover:

  • Why all energy prices are going up.
  • How it is also negatively affecting you and your business.
  • Steps your propane customers can take to help control those energy costs.

Communication strategies

You may be in a position to encourage current or future participation in a budget billing plan, offer price protection plans such as pre-buy and price caps, and you can consider developing a fair price guarantee that can ease concerns about whether your propane price is competitive.

You want your customers to know you have deep roots in the community and they can trust you to have secure supply and delivery capabilities no matter what the challenges are. Thank them for their understanding.

Communication with your customers can happen in a variety of ways, but it is most important to educate your front-line employees about the price situation and the talking points needed as they deal with day-to-day customer inquiries. All of this should be backed up with special information on your website in the form of a blog or article in a current news section. You may consider sending out a special email about the price challenge to select customers and also address the price challenge in a newsletter, if you employ such a communication tool.

If you don’t have enough resources to do all of this in a timely manner, hire a specialist to do it right the first time. It is that important for your business.


Tom Jaenicke is vice president of propane marketing services for Warm Thoughts Communications. He can be reached at tjaenicke@warmthoughts.com or 810-252-7855.

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