Gassing up your propane sales

February 1, 2008 By    

With today’s heated competitive climate over ever-tightening American energy dollars, being an “order-taker” and sitting back waiting for the telephone to ring has gone the way of the malt shop, bell-bottoms and mullets.

As identified by their industry peers, those who excel at marketing propane are persistent while avoiding an aggressive, smarmy hard-sell. They avoid price-based pitches and negative commentary about the competition, stressing instead the stellar customer service their own company can deliver.

Rather than relying on bobtail drivers to bring in the business, successful propane retailers are proactively reaching out to the surrounding community, setting up a staff dedicated solely to sales along with joining local chambers of commerce, builders’ associations and various civic and charitable organizations offering a chance to assist the public while presenting positive networking opportunities.

Crackerjack propane sales personnel talk of “building relationships” among key prospects, recognizing the benefits of personal visits versus phone calls to inspire a crucial sense of trust and value that comes with being known as a straight shooter.

“The very best salesmen (and women) always know their product or service inside and out. They know all the pros and cons; they know the shortcomings as well as the strengths,” observes Daryl McClendon, director of acquisitions for Ferrellgas and a member of LP Gas Magazine’s Editorial Advisory Board. “Obviously, they try to emphasize the pros, but don’t shy away from the weaknesses either,

For example, a great salesman may recognize the current high prices of propane but is able to put more focus on its overall value and comfort.

Mike George, general manager George Propane
Mike George, general manager George Propane

A proactive approach

Being proactive and building relationships is a key element for reaching Boulden Propane‘s service area throughout Delaware, Maryland and Pennsylvania. The company’s line of heating, ventilation and air conditioning equipment covers several energy sources; sales of the propane-based units are directed toward developers and contractors adding new neighborhoods to growing communities.

“We’re trying to get a propane tank in the ground at the beginning with the builders,” says Tim Boulden, company president.

His sales force has been established for years, backed by consumer-awareness efforts such as direct mail, radio spots and newspaper advertising.

“We do a lot of good planning and preparation. We focus on the details of the business,” says Boulden, noting that “you can really market, sell and be proactive” when soliciting new business with these aspects in place.

Henry Sharpe is senior director of strategic account for Blue Rhino.
Henry Sharpe is senior director of strategic account for Blue Rhino.

Industry veteran Tom Jaenicke, owner of aTomiK Creative Solutions and also member of LP Gas Magazine’s Editorial Advisory Board, says a sales program aimed at new neighborhoods could be a better approach than the standard cold-calling methods.

A questionnaire sent to a portion of your existing clientele can assist in formulating your marketing materials. “It can be as simple as taking a customer survey of 200 people,” he notes.

Although Danny Alexander insists “I’m not a sales guy,” the manager of administration and accounting at Dixie Gas & Oil in Virginia has nonetheless garnered praise for his marketing acumen among others in the propane industry. The company’s 6,000 to 7,000 propane accounts are situated within a 200-mile radius served by a main office and two branch offices spaced about 50 miles apart.

In the past, he would informally attend to sales calls, but burgeoning opportunity has brought about an important shift in strategy.

“We’ve added true salespeople to our staff,” he notes, referring to efforts aimed at selling propane to new construction sites and existing residents willing to convert from fuel oil or electricity. “We’ve done a pretty good job of capitalizing on that.”

The company’s standing operating procedure is predicated on visiting potential propane customers.

“We try to build a relationship and give that personal touch,” says Alexander. “They know Dixie by our salespeople.”

Spreading the word

“Word of mouth is the best advertising,” says Mike George, general manager at George Propane, in Goshen, Mass. “If you have good word of mouth you don’t have to advertise as much.”

Having a fleet of attractive trucks and up-to-date equipment is another factor in the company’s favor.

“The keys to effectively selling propane is to develop a good name for your company by providing good service and a good product,” he says, noting how the Rinnai line of instant hot water heaters has been a big plus.

In keeping with the attitude that price is not the main driver, his company doesn’t do introductory offers to lure new accounts.

“They’re getting the best price the first time they ask,” says George. “I would never offer anything to a new customer that I don’t offer to a long-term customer.”

Getting in sync

Ownership must be fully on board before embarking upon a sales program. “For a company to be successful marketers they need to have the marketing mentality from top to bottom,” says Darren Engle, director of marketing for the Blue Star Gas Co., based in Santa Rosa, Calif., with 10 operations covering 45,000 square miles throughout the Pacific Northwest.

Management, drivers, tank setters and office personnel must all be in sync.

“It has to be the same message from top to bottom,” Engle reports, adding that obtaining a grasp on what your company does better than the others provides an effective baseline. “As management, we need to be able to supply the tools for that differential. Don’t just give (incoming callers) to a robot who does the spiel.”

A critical point in differentiating your company from the competition includes a strict avoidance to trashing other propane providers.

“The easiest way to compete is to sling mud and point out others’ deficiencies, but all that does is slam the industry as a whole. It makes all of us look really poor. I’d rather be out there setting the trend and setting the pace” for good service and customer value,” Engle warns.

“We have to be very careful as an industry when we start slinging mud at each other. People are skittish about propane anyway, and they won’t want to put that tank in their yard if they think the industry is inept.”

As with the others, Engle sees little payback in pitching your product based on cost.

“Too often as an industry we focus too much on price,” he says, citing all the money spent on facility upgrades and operational improvements, only to have that investment value dissipated in the public’s eye via the prospect of propane on the cheap: “So, now let us discount it and sell it to you for nothing…”

Nationwide, Engle points to an ongoing – and necessary – shift in the industry’s attitude as the traditional “order-taking” mentality is on the decline.

“I see a shift in the climate. We’re having to become better competitors; our competition is the other energy sources” rather than neighboring propane dealers. “Our industry needs to remember that our competition isn’t ourselves; we don’t want to shoot ourselves in the foot and lose market share.”

Although growing your company is best accomplished through a dedicated sales staff, such a move may not be as important if your service area is exceptionally small, rural or otherwise geographically isolated, according to Engle. Sales follow-up can most likely be handled by drivers and office staff. Of course, each employee needs to be on the lookout for new construction coming in and other possible sales leads, passing those tips along to the proper individual charged with contacting the prospects.

Meeting the potential client in-person is the best way to go, in Engle’s view.

“There’s a lot to be said about a personal visit. I want to match a name with a face, and there’s nothing like a handshake” to further a burgeoning business relationship. “As an industry or a company we want to sell ourselves, and it’s hard to do that over the phone.”

Leading to leads

Obtaining leads for your sales effort requires some homework, and to be effective you have to pursue them with a certain amount of vigor.

“There are many avenues to get leads, but unless they’re followed up on and ‘worked’ you’re just throwing your money away,” Engle says. A team approach throughout the company ensures an accurate view of the better prospects.

Engle makes several suggestions, the foremost being keeping your eyes open for new construction and simply driving around gathering names and addresses.

Searching building-permit listings is another idea, as is mining ZIP codes to determine a target area. However, Engle issues a caution about large-scale direct mailings or a sweeping attack of cold-calling. “The broad approach is not the best way to do it,” he maintains.

Instead, conduct a review of census data to determine where your efforts can be the most redeeming. Which areas are growing? What are their preferred heating sources and how do the household incomes rate? Are they rentals, tract houses or luxury getaways and second homes?

Census data can be gleaned to learn which heating source existing homeowners are utilizing; for example, pinpointing a neighborhood heavily leaning toward fuel oil can be a great assist.

“If I know that a certain region is kerosene I know my marketing materials will have a different look,” Engle reports.

‘Sundown Rule’

When Henry Sharpe started selling propane door-to-door in 1972, he made his rounds in a ’69 Chevrolet Biscayne; the trunk lid had been removed to hold a propane-powered dryer for sales demonstration purposes. His salary was $250 a month, and he had to buy his own gasoline for the car – the fuel was provided free when the fleet was later converted to propane.

Currently, Sharpe is senior director of strategic account for Blue Rhino. His single client is Lowe’s.

“I’m almost like a Lowe’s employee. The buyer doesn’t have to worry day-to-day because I’m taking care of him.” Sharpe has access to the customer service center and is thus able to head off small problems before they become big ones. He checks in seven days a week, making sure “the buyer doesn’t need to deal with those things.”

Sharpe makes a point to be proactive if bad news is in the offing. “I let the buyer be aware of a problem before he hears about it from someone else – and some of those calls can be painful,” he admits.

Throughout his career, Sharpe has followed what he calls the “Sundown Rule,” which is returning every phone call the same day, even if it involves just leaving a voice-mail message. “They might not be there at 9 o’clock in the evening, but I want them to know I care about them.”

When Sharpe was selling directly to consumers, “We’d try to convert fuel oil customers over to propane. We’d try to put a gas-burning appliance in there – maybe not a furnace, but a range or dryer to get propane in the house,” he says. LP space heaters are another introductory line to consider.

“Let them see what gas will do for them,” says Sharpe, referring, as an example, to a pitch that may be appropriate in an area prone to power failures: “If you had a propane space heater in there you could still stay warm.”

An effective salesperson has to have a keen attitude toward helping people and a strong belief that someone will make a purchase if enough prospects are approached. “Any time I try to sell something to someone, I believe that I can; they have to prove to me that I can’t. I’ve had bad weeks and months, but I still felt I could sell someone tomorrow. If I could sell something last month, I can still sell,” he reveals.

“What it takes to be successful is that you want to be successful. You have to understand the customer and their needs,” Sharpe explains.

Staying on point

Sharpe resists negative talk about the competition. “You don’t want to beat up the propane dealer you’re selling against. Talk about the benefits your company has. Talk about the length of time your drivers have been there or talk about a budget plan or some other things you can do to help them. With high energy costs, these are some of the things I’d promote more than ever before,” he advises.

And even if a sale falls through, ask the prospect for a referral to someone else who may be more inclined to need the benefits propane can offer, Sharpe suggests: “Who do you know that I can help?” You may get a reply such as, “My brother has a mountain cabin.”

Having a designated sales staff is key amid today’s competitive market, he believes. Your bobtail operator, paid by the hour, is not likely able to apply the required effort. “How much time does a driver have to sit around talking to customers? There’s a different mindset with a driver vs. a go-getter salesperson.”

If your company provides good service you’re probably going to have people calling in, and you can initiate a phone solicitation program. “Telemarketers can start the dialogue and weed out people to at least give the salesperson something to start with,” Sharpe says.

And, Sharpe continues, with the impact of the PERC ad campaign, now may be the time to implement a dedicated marketing program to strike while the iron is hot.

“People are much more aware of propane, and that’s when you need to be out there approaching those folks,” Sharpe says. “You also have to work closely with the builders and contractors to have those new houses rolling out with propane appliances.”

Jaenicke also sees “a growing trend toward concentrating on the builder market. They are a big influence on people’s energy choices.”

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