Propane Plus

The propane industry loves to give services away, but it can’t afford to anymore. That’s Tim Johnson’s belief.

Team: From left, Nicholas Johnson, Daniel Johnson, Richard Lacroix, Jennifer Ornella, Samantha Lawson, Paul Duphily, Chris LaBreche, Gilbert Silcox, Peter Macisac and Timothy Johnson.

Owner of Massachusetts-based Propane Plus, Johnson instituted a flat rate, upfront pricing program about four years ago to increase revenue from his service department. Johnson began studying other non-propane service companies to see how they made money and then applied those results to the propane industry.

“The key is, before you fix something, you need to give the customer the price,” says Johnson, 42. “That enables you to get more per hour. We’ve doubled revenue in our service department just by switching to a different method of billing and providing a higher level of service.”

Johnson says the idea is standard in other industries servicing residential customers, such as plumbing and electrical work, but propane remains behind the times.

“I’d like to see everybody do it. A rising tide flows to all boats,” says Johnson, who owns Propane Plus with his brother, Andrew. “I would show anybody what we’re doing, even our competitors, just so we are in the same ballpark.

“The cost of running a business today is so high that you’ve got to be profitable in every aspect of the business,” he adds.

According to Johnson, other propane companies are reluctant to follow this system for fear of customer backlash. Johnson says Propane Plus incorporated the program out of necessity, so it could retain quality service technicians.

“The truth of the matter is, if a service department is not profitable, you can’t hire good people,” he adds. “If you can’t hire good people, you can’t provide good service.”

Propane Plus has three licensed service technicians who repair and install heating and air-conditioning equipment as well as set tanks and perform other propane-related jobs.

“If someone’s heat isn’t working, the technician is concentrating on getting that fixed, but he should be looking at other factors which caused it to break,” Johnson says. “We provide a lot of options. We just don’t go in there, change a part and say, ‘See ya later.’

“We use the opportunity to upsell as well.”

The company charges $125 to diagnose the problem. If the customer chooses to have the service performed, the $125 is credited and Propane Plus bills for the task listed in a flat-rate book.

“The customer knows the price before you actually do the work,” Johnson says. “The key is letting the customer know up front and not breaking out parts and labor.”