Set a technology strategy

June 17, 2021 By    

What do strategy and the number 168 have in common? Let’s begin with 168. You should know that it’s the number of hours in a week. How you spend those 168 hours is up to you and reflects your values.

If, over the course of time, you consistently spend 168 hours working, sleeping and eating, you’re going to be thought of as a workaholic, even if you claim to be dedicated to your family and talk about work-life balance. What you say and what you do aren’t matching up. Too many of us don’t even think about how we want to spend our 168 hours.

Strategy is like 168 for many businesses, especially small businesses. Many small businesses say they don’t have a strategy: “It’s for big businesses with lots of employees and lots of customers.” Well, they have a strategy; they’re just backing into it based on how they operate and spend their time. Businesses that do that often wind up with conflicting activities and, worse, conflicting goals.

Technology is a key component of strategy, and you ought to have a technology strategy that fits into your overall business strategy. We like to think that our technology choices reflect our strategy. We begin by observing that propane is a commodity. Getting it to the customer’s tank is a service. Our strategic goal is to optimize the long-term, sustainable value of our business by providing reliable, transparent and value-priced service. Here’s how we use technology to achieve our strategic goal:

Reliable service: We have tank monitors integrated into our back-office routing and customer management software, and they also are integrated into our customer-facing website. There’s a monitor on every company-owned tank and every auto-fill tank, regardless of who owns the tank. We use the software to reach out to will-call customers when it’s time for them to place an order, and they often use our website or app to respond and place an order. Our customer management software also enables us to efficiently implement a budget program for customers to give them more predictable payments. The result is that we have very few runouts. And the phones? We answered 99.9 percent of our calls within eight seconds, put only 4.2 percent of customers on hold for an average of 45 seconds, and had zero customers on hold abandon the call by hanging up. We had time to answer our phones because over 73 percent of our deliveries last winter were either auto-fill or online will-call orders, which reduced our call volume by 39 percent compared to the prior winter.

Transparent service: Our propane prices, contracts and standard terms and conditions are all on our website. This April, we launched a new website that makes it easier for customers to navigate and find this information. We have a series of why and how-to videos available on both YouTube and our website that explain our value proposition to customers in plain language that they can understand. The website is mobile friendly and now loads in less than one second.

Value-priced: Maintaining competitive prices and achieving an appropriate return on capital is a never-ending challenge because it’s not easy to convince a customer that the product is a commodity, but the service is not. That’s where operating efficiencies come into play. We have come up with a technology ecosystem that is interconnected, which, in turn, reduces the labor and equipment required to do something. Our operating expense as a percent of revenue has declined despite the addition of software licensing fees and monthly monitor expenses. These savings help us maintain an appropriate return on capital while remaining price competitive – all while delivering better service than the propane retailer next door.

Summer is on the horizon. Maybe it’s time to think about how you spend your 168 hours and what it says about your values. Then maybe spend some of that time thinking about how your business operates and the strategy it represents.

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

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