Outdoor living an opportunity to boost residential propane sales

August 21, 2014 By    

The residential propane market’s decline is alarming.

According to the American Petroleum Institute, residential propane sales fell 35 percent between 2000 and 2012. The fact that the Propane Education & Research Council (PERC) recently dedicated $6 million to a single consumer safety preparedness campaign that will ultimately encourage residential propane sales speaks to the gravity of the market’s decline, as well.

Propane suppliers, retailers and allied trade representatives face challenges to grow gallons within the residential market. Home heating is obviously where the industry can grow gallons the fastest.

But other residential opportunities exist that can help grow that market. One such opportunity is outdoor living.

According to the Texas Association of Realtors’ 2014 Texas Remodel Valuation Report, creating a livable outdoor space is one of the most popular and profitable home renovation projects among Texas homeowners – recouping almost 112 percent of the total project costs in added home values. Likewise, homeowners want more comfortable and attractive outdoor spaces, according to a 2014 American Society of Landscape Architects study.

Sharp Propane, a propane retailer covering several Texas markets, including Austin, College Station and Fort Worth, has experience in this area. Sharp works with homeowners and landscape contractors to incorporate outdoor appliances into customers’ primary propane system. Sharp’s role includes every step of the propane installation process, from a site plan review to coordinating with the city on permitting and working with the contractor.

One project Sharp helped to recently complete is a backyard renovation for Jenn and Joe Washam in Austin, Texas. Sharp worked alongside Pearson Landscaping, which spent six months renovating the family’s backyard.

Pearson Landscaping’s Mark Bichler says his team essentially built the family a second house in the backyard for visitors. An outdoor kitchen that features burners, a grill, a crawfish boiling pot and a fireplace are all included. Propane fuels all of the appliances. In addition, propane fuels the family’s new pool and spa.

“Because the Washams’ project incorporated so much propane into the design, we coordinated and met with Sharp eight or nine times over the course of the project,” Bichler says. “When we ran propane lines through the trenches below the kitchen, Sharp ran an extra line of pipe under the slab just in case they might want a fire pit over to the side or some other propane-related product there in the future.”

Landscape contractors aren’t Sharp’s only outdoor living partners. According to Sharp CEO Steve McKay, Sharp has worked with pool contractors for decades.

“We have a very good reputation with the pool people as a go-to provider to get the work done,” McKay says. “Some pool contractors do both the pool and the outdoor living [market]. The way we market to those people is primarily through word of mouth, but we also do an e-newsletter to influencers.”

The more propane appliances incorporated into such projects, the more gallon sales propane retailers will make. The key is taking the initiative to work with landscape contractors or similar partners to create opportunities that can return residential propane sales to previous heights.

“A homeowner may heat the pool for a New Year’s Eve party or a child’s February birthday party,” McKay says. “Depending on the size of the pool, you can easily be talking about 300 to 600 gallons of propane. For us, that one use may be 50 percent of that customer’s annual volume.”

Perhaps the best source to grow in the outdoor living segment is a propane retailer’s existing customer base. Yes, existing customers are an obvious growth source. But some retailers overlook existing customers because they’re focused on landing the next customer – or they’re too focused on delivering for home-heating purposes only.

“I would say the absolute first partnership for us is with the customer,” McKay says. “The customer has to know that these options are available – and sometimes it’s our fault when they don’t.

“I can’t tell you how many homes we go to that have 20-pound cylinders on the back porch,” he continues. “We tell them they don’t have to do that, and they’re like, ‘What?’ Making the customer the top partnership and making them aware of what you do is a commitment.”

Editor’s note: Ferrellgas recently acquired Sharp Propane

About the Author:

Kevin Yanik was a senior editor at LP Gas Magazine.

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