Young homebuyers are gravitating toward propane country

November 18, 2019 By    

According to the National Association of Home Builders, Zillow, the U.S. Census Bureau and other sources, there is pent-up demand for affordable housing among young adult first-time homebuyers.

Propane marketers should learn to embrace and prepare for the young homebuyer generation. Photo: Bradbury

Propane marketers should learn to embrace and prepare for the young homebuyer generation. Photo: Bradbury

Many young adults still live with relatives or are waiting to make the transition from rental to home ownership. Even first-time homeowners are reluctant to upgrade to a larger home that would better suit their family needs and lifestyles.

Let’s take a look at some of the reasons for this pent-up demand.

⦁ Many young adults today have saddled themselves with a crushing load of student debt. According to the Federal Reserve, the class of 2018 graduated from college with an average debt balance of $29,800. That could be a nice down payment on a starter home.

⦁ The housing market is hot in most parts of the country, with soaring prices driven by high consumer confidence and favorable interest rates, especially in more urban areas. Young homebuyers who want to live in a walkable urban neighborhood are being priced out of the market or are being forced to consider less desirable urban neighborhoods, making propane country a viable alternative.

⦁ Young adults leaving rentals for their first homes look for affordable move-in ready homes and turn away when finding out more about the hidden or not-so-hidden costs of upkeep, repairs, utilities, taxes and fees. Propane is an affordable energy choice, and the younger generations need to know more about it.

For several decades, the propane industry generally has ignored each emerging generation long before we started labeling them as Generation Z, millennials and Generation X. We seemed to have an endless supply of the silent generation and baby boomers to whom we sold propane and related products.

Propane retailers preferred to target builders of large, expensive custom homes built beyond the natural gas mains. That seemed to be the aspirational housing for successful baby boomers and members of the silent generation. Now that those generations are aging out, propane retailers need to broaden their focus to include the previously ignored generations that are following.

Preparing for the future

Learning how to transact with younger generations can be key to the future of your propane business. Here are a couple of considerations that will prepare you for the younger generations of buyers heading your way.

⦁ Embrace digital marketing – Restack your marketing efforts to emphasize a more digital approach. This doesn’t mean you have to stop doing conventional advertising that you know is working for you, but marketing and advertising efforts that can’t be measured are suspect. Remember how many years and dollars you wasted on Yellow Pages advertising before you finally kicked it to the curb? Budget money (4 to 6 percent of your gross profit revenue) to marketing, and make digital marketing the foundation of your efforts to reach new customers. An integrated website and social media platform can help reach younger generations.

⦁ Transact through technology – Your young generation propane prospect needs to be able to search and find your propane business online, contact you and become your customer without ever having to come to your office. After becoming a customer, that young generation propane user needs to be able to sign up for special payment plans, arrange for deliveries, pay bills, have access to usage and supply data, and do all of the above on a smartphone. Are you ready for all of this?

It has been my experience that if your website is more than 3 years old, it is out of date and beyond the “patch it up to get by” approach. There is no excuse for poor web design.

Older folks are sometimes referred to as the unwired and now unwireless generations. Make sure your propane business is geared to reach out to the newer generations of homebuyers who live, work and play in the wireless world.

Tom Jaenicke is vice president of propane marketing services for Warm Thoughts Communications.

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