Prepare for heating season

October 9, 2023 By Christopher Caywood

Photo: BrendanHunter/iStock / Getty Images Plus/Getty Images

Winter in the propane industry is a lot like a train schedule. It may be scheduled to begin Oct. 1 and end on March 31, but its actual arrival or departure is entirely up to its locomotive engineer, also known as nature.

Propane marketers increasingly turn to technology to make sure they, and their customers, are ready in the event winter or grain drying season make an on-time arrival.

Here are some examples of what we do at Caywood Propane:

Customer communication

We use a combination of social media, our website and digital communication. Our digital communication currently consists of email only – a sore point we have with our software provider:

⦁ Gas checks and maintenance: Over 95 percent of our customers have a gas check that is less than 7 years old. Of course, all of them have gas checks on file. And we use software features to more efficiently schedule regulator replacement, power washing, painting and other routine tank maintenance.

⦁ Price protection: Our customers do this online or over the phone, and we use digital confirmations at the time of purchase and in the fall before winter begins to make sure there are no misunderstandings about what the customer is signing up for. Digital communication enables us to provide reminders early and often about the beginning and end of enrollment periods, which help drive price protection sales.

⦁ Winter season reminder: We use Labor Day as a time to reach out to customers before winter begins to confirm whether they are on auto-fill or will-call and provide reminders about the importance of keeping driveways and a pathway to the tank clear once the snow comes.

⦁ Last mass pitch: We also use the confirmations as an opportunity to make one last pitch about the benefits of auto-fill and budget plans to our will-call customers. Die-hard will-call customers are reminded of the financial benefits of online and app orders.

⦁ Winter phone call performance: Our 75 percent auto-fill rate and 33 percent will-call digital order rate free up valuable phone capacity. We answered over 80 percent of our calls in less than 20 seconds last winter, even during the peak of delivery season. And our average hold time of less than one minute gave us an abandon rate of less than 3 percent. It also gave us plenty of time to answer calls from our competitors’ customers when they were unable to answer the phone, leading to new customer applications throughout the winter.

Delivery management

Past columns have highlighted the benefits of customer software, route planning software and tank monitors. Only will-call, customer-owned tanks and non-residential customers do not have monitors. At this point, we have monitors on over 93 percent of our active customer tanks, which, combined with our software tools, enable us to:

⦁ Use tanks in the field as storage: Our budget customers and pre-paid customers are financially indifferent to the timing of deliveries, and to the extent that your prices in early fall are lower than they are after October, your auto-fill customers in general may not mind an early delivery. Propane, for the time being, appears to be plentiful, so filling customer tanks to avoid price spikes and local supply shortages may be less of a concern this winter.

⦁ Reduce delivery spikes: We recently have started to think about trying to smooth out monthly delivery volume by shifting the timing of deliveries to low usage customers to the shoulder months and, in some cases, to the summer. The idea is simple, but the planning and execution is much more complicated.

Run-out management

We use digital communications and tank monitors to reach our leased tank will-call customers when their tank levels reach 30 percent, 20 percent and 10 percent. This pro-active management of our will-call customer base has dramatically reduced the run-out rate for will-call customers (less than 1 percent last winter). We also believe this has a strong influence on retention.

Our digital tools have made winter preparation and winter execution much easier than in the past. Now is the time to make sure your digital tools are ready to get you through the winter too.

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