BPN Seminar Shares Retail Propane Success Stories

Retail propane success stories were shared in a seminar presented by BPN at the 2019 NPGA Southeastern Convention in Atlanta. In three 20-minute segments, representatives of a trio of retail propane companies of different sizes and from different geographies shared unique ways their companies have found success. Their stories took into account market conditions as well as new opportunities presented by improved technology.

“Gadgets are the great equalizer,” said Chris Caywood, president of Caywood Propane Gas, Inc. (Albion, Coldwater, and Hudson, Mich.). “Technology and information make smaller retailers more competitive with larger retailers.” He noted that smartphones were only used by about 15% of his market 10 years ago, but now almost 99% of his market has them. “This certainly changes the way retail propane marketers can interact with customers,” he said. “We’re trying to get ahead of the competitive curve by offering web-based and smartphone tools to our customers.” Something must be working. Caywood noted that over the past 10 years, propane-heated homes in his market declined by 11.8%, but his business grew by 300%.

With a background in law, retail, pharmaceutical, and online universities, Caywood has been a co-owner of his family’s propane business since 1997, but did not to begin overseeing it on a daily basis until late 2014. “The business was dying a slow death by a thousand paper cuts,” he said. “I talked to the staff about what sets us apart from our competition and many said, ‘Great service at great prices.’ After I shared my market research, which concluded that there were no retailers in our market promoting crappy service at high prices, we all agreed that we needed to find a better way to differentiate the business.”

Caywood has shifted to digital technology and marketing to attract and retain customers. “We publish our prices online, and we are restructuring our discount program to encourage customers to order and pay for gas using our website and smartphone app. Turns out that a lot of customers don’t need a lot of encouragement. We found that many were happy to sign on to a new propane company [that required] little human interaction,” he said. “The Gas Check is the only human interaction we require to get started with our company.”

Mark Denton, vice president of business development of Blossman Gas (Ocean Springs, Miss.), said much of Blossman’s success has been due to its aggressive move into the autogas market. “Many remember the industry’s first exposure to propane as a motor fuel with some bad stories,” Denton said. “Now, the old carbureted systems of the ’70s and ’80s have been replaced with new technology, like the port fuel injected and direct fuel injected systems that we see on modern gasoline engines. The old systems became obsolete when the engine control units (or computers) became more sophisticated, and our old propane systems were not able to keep up. With today’s engineered autogas systems, we have complete engine control unit (ECU) laptop diagnostics on both gasoline and autogas.” He encouraged participants to take a second look at autogas for running their vehicles and as a product to sell to fleet owners. “Propane for autogas can be a year-round business.”

Denton also pointed out that propane is a very reliable energy source. “We have a very resilient fuel in propane,” he said. “When hurricanes strike and power goes out, everyone turns to propane when other energy sources can’t come through. When Verizon and AT&T went down with recent hurricanes, propane was fueling those returning the other power sources to service.”

As the technology for propane engines has improved, costs of vehicles have come down. “We have more choices now for propane engines… Ford, ROUSH, Freightliner, Blue Bird, and Thomas, to name some of the major options, not to mention aftermarket such as the Prins system,” he said. “Vehicle diagnostics now can tell you what is wrong with a down vehicle, to improve maintenance. Propane is 20% cleaner in tailpipe emissions. All major benefits to using our own fuel.”

School districts are switching rapidly to propane, Denton pointed out. “With savings of $2000 a year for bus maintenance and $1000 a year on fuel, we have a great offering even before you consider the lower emissions that helps our young students’ lungs.” He also shared a story about Groome Transportation, which serves the Atlanta Airport and many towns outside of Atlanta. “The company is using a million gallons of autogas a year and saving a dollar per gallon.”

The right people make all the difference, according to Dan Richardson, president and CEO of Conger LP Gas (Tifton, Ga.). He told the story of an employee who was asked about tankless water heaters while at a convenience store on her own time. “She spent 20 minutes talking about the benefits of tankless water heaters,” Richardson said. “It would have been easier to just tell the person to call the office, but that’s not always what brings the business. Employees excited about their company make the company grow.”

Richardson and his staff decided a few years ago that everyone needed to be able to sell the company’s products and services. “In February of 2016, gallons were down and I had an ‘aha’ moment in short sleeves on an 80-degree day,” he said. “We were in a winter that never got into the teens and had only 12 days below 30 degrees. We are 60 miles north of the Florida line and the reality is annual retail gallons were down nationwide from 11 billion gallons to 8.5 billion gallons. We used to just come in, turn on the lights, and wait for the phone to ring. We had someone from outside the industry come in and review the business from a consumer standpoint. We had to start doing things differently.”

The result was a plan whereby all employees became trained and empowered to speak about all aspects of what the company sells. “Employees started feeling like, ‘this is my company,’” Richardson said. “When we moved recently to a much larger facility and had an open house, with the staff inviting all of their friends and neighbors, 500 people came on the first day and 300 came on the second day.”

While many companies have gotten out of the business of selling water heaters and other appliances, Richardson believes this has been shortsighted. He said, “When I looked at our company, I knew we had to find ways to increase residential gallons which would add value and long-term stability. In the residential market we put a strong emphasis on water heaters, both tank and tankless, and now offer a full range of gas appliances in our showroom.” Richardson and his team have also included tying in other gas appliances with the sale of gas water heaters. As a part of the program the customer agrees to buy gas exclusively from Conger LP Gas for five years. Richardson has not had a problem with customers honoring the five-year commitment. “If, as a marketer, I can’t keep a customer for five years, shame on me.”

Richardson also stated that the organic growth from this program has been a bonus. He said of the 206 water heaters sold and installed in 2018 38% were customers who were previously not using propane gas in their home and 31% came from new construction and home renovation projects. Richardson said, “If we, as an industry, are waiting on big box stores to sell more gas appliances to our customers, we will be waiting a long time. It’s important for us to take the initiative.” — Pat Thornton