Marketers Optimistic About Growth; Many On-Board With Appliance Sales

The propane industry is an optimistic one, with 25% of marketers expecting their business to grow more than 10% in the next two years, according to the final data that the Propane Education & Research Council (PERC) shared with BPN from a PERC marketers survey. The council plans to release complete results from the survey sometime this month.

PERC president and CEO Roy Willis provided some preliminary results of the survey at its Atlanta meeting in April, and PERC director of communications Gregg Walker expanded on some of those results in a phone interview with BPN soon after that meeting.

Walker noted that the propane industry has been through a great deal of change since PERC last conducted a marketer survey in 2010, including a sharp rise in propane production and a challenging winter of 2013-2014 that exposed some weaknesses in the nation’s energy transportation infrastructure. This year seemed like the right time to ask marketers about their expectations for business growth, their willingness to support new propane-fueled technology, the overall direction of PERC, and their opinions on other issues.

He noted that the final results of the survey were based on 784 completed marketer surveys. Out of the 784 responses, 53% said they expected their business to grow 1% to 10%. If you add the 53% to the 25% percent number that expect their business to grow more than 10%, that means 78% of the respondents expected their business to grow in the next two years.

When marketers were asked what factors would drive that growth, sales and marketing was the most common answer.

Respondents gave the propane industry a 7 out of 10 score when asked about their satisfaction with the propane industry’s marketing efforts overall. Walker said that seems about right, since PERC was under a U.S. Department of Commerce restriction on its public education activities for about six years. PERC announced this past April that the restriction had finally ended, allowing it to resume its public education.

Responding to the question of which activities PERC should increase, marketing was a common response. Nine out of 10 of those respondents said they felt a PERC public education program would benefit their businesses.

“There’s clearly a sense in our industry that a PERC public awareness program would be beneficial,” Walker said, adding that research company Mastio & Co. conducted the surveys by telephone, and that Mastio will report the survey results to PERC strictly in the aggregate, making the responses completely confidential. PERC learned about Mastio from one of the council’s advisory committee members who has hired the company for research projects in the past.

He thought another interesting aspect of the survey came from the question of whether marketers sell, install, or service appliances. Walker did not recall seeing that question in a survey before. Over half (55%) of the respondents sell at least one appliance; many sold various types of appliances, water heaters and hearth products being the most common. Fifty-four percent install appliances, and 56% said they service appliances.

“That doesn’t necessarily mean they install or service every conceivable type of appliance, but they do have at least some appliance installation and service program,” Walker noted.

Fifty-three percent of survey respondents said they have a business arrangement of some kind with one or more plumbers. About the same percentage (54%) said they also have some type of business partnership with heating, ventilation, and air conditioning (HVAC) professionals.

“We didn’t ask details about the nature of that business relationship, and I can imagine that’s a partnership that can take any number of forms, but I took that as an encouraging sign that propane marketers are working with local construction professionals like plumbers and HVAC pros to take care of their customers,” Walker stated.

Propane marketers are also getting more comfortable with technology. PERC wanted to know about the industry’s appetite for promoting newly arrived products that were just coming on the market, especially in emerging categories such as landscape equipment, work trucks, or new irrigation engines. Twenty percent answered that they want to be the first to get involved. Twenty-six percent answered that they don’t necessarily want to be the first, but they want to get in early. Both of those numbers are up from PERC’s last survey in 2010.

“We do see an increase in the number of companies that describe themselves as early adopters,” Walker said. “They want to get in first or get in early.

“We were pleased to see that based on the sample, the industry is clearly more interested in embracing new products than [it was] five years ago. This is one of the many components that the advisory committee and council will be taking into consideration as they plan the post-restriction PERC.”

On the subject of the consumer-education restriction that officially ended in April, Walker said the PERC advisory committee met in Austin, Texas the week after the National Propane Gas Association Southeastern Convention in April to discuss how to proceed with a “post-restriction” PERC. Any new PERC consumer education programs fall under the purview of the PERC advisory committee’s market outreach and training working group. Walker said the group did not reach any conclusions and would meet again soon. —Daryl Lubinsky