Connecting with Residential Propane Customers

By Roy Willis

RoyWillis 250The Propane Education & Research Council's $6.1 million Consumer Safety Preparedness Campaign will launch soon and, in essence, is about connecting with residential propane consumers.

The residential market is vitally important to the economic viability of the U.S. propane business. It is the core of our business. It is where the first installation of propane was made over a century ago, and it is the foundation on which we must build the future, even as we accelerate the transition to a more diverse and stronger U.S. propane market.

The decision to undertake this campaign at this time has a context beyond last winter's lingering polar vortex. Residential propane use has declined for several years for several reasons, including the steady improvement in appliance and structural efficiency, growing consumer conservation, expansion of electric heat pumps and natural gas utilities, and the collapse of new home construction. In fact, the housing decline hit propane sales even earlier because of the 85 percent decline in manufactured housing, where propane at its peak had nearly a 70 percent market share for heating and cooking. Those economic forces were beyond the industry's control.

What the industry can control is how we present propane to the people who make energy decisions. Since 2009 the industry's ability through PERC to directly market the general benefits of propane to people buying, building, and renovating homes was effectively shut down by the restriction of PERC's public education function under the Propane Education and Research Act of 1996. Yet PERC was able through its unrestricted training authority to provide information and tools that key energy decision makers -- construction professionals -- need to have when they consider using propane in their residential building projects. That effort has helped, and as housing generally is recovering from its lows, propane's share of nationwide residential space heating is slowly growing again, although propane businesses in many states are experiencing a net decline in propane heated homes.

The challenges that propane businesses face in the residential market were compounded only a few months ago by a surge in crop drying and space heating demand that drew down inventories, strained the transportation infrastructure, drove up costs, caused a price spike, and generated unprecedented negative news coverage that together undermine consumer confidence. America is not running out of propane, yet consumers' perception of propane's reliability has been shaken. No business can ignore such threats without suffering permanent demand destruction and customer losses.

To help address these challenges, PERC is preparing once again to launch a multimedia campaign focused on residential propane consumers. This time, PERC is relying on its authority "to inform and educate the public about safety ... related to the use of propane." To comply with the restriction, the campaign must carry a safety message.

Safety communications are always delicate because the message, if not carefully crafted, can be unsettling to the very audience one seeks to reassure. The creative collaboration between PERC's communication firm, Swanson Russell, the Advisory Committee’s project team led by Brandon Wade, and PERC's staff, led by Director of Communications Gregg Walker, has struck the right balance. The campaign uses multimedia elements online, on television, and in print to illustrate propane's benefits in the home, while subtly urging consumers to fill tanks early. The essential safety message is clearly there, yet the images of the comfort and convenience of propane being used in the home are powerful reminders of the benefits of propane as clean American energy. Indeed, a picture is worth a thousand words.

We should have realistic expectations about what this campaign can achieve. Funded at $6.1 million, the new campaign in total effort and spending is less than a third the size of the award-winning Energy Guys campaigns of 2004-2008 that featured Propane and Electricity characters illustrating the benefits of propane in the home.

While substantial, the resources available for this year’s campaign do not enable buying television time in every locale and will be aimed at some of the hardest hit states in the Midwest and Atlantic regions. Of course, online elements will reach the nationwide audience and will include a dedicated website that will go live soon. Additionally, radio ads and several print pieces will be available for use in local markets by state organizations and individual companies, if they choose.

The TV ads launch on September 8 and will run during a 12-week period. Obviously, the timing is not the same as traditional summer fill programs. Most propane companies carry on the conversation about early fills and payment plans directly with their own customers throughout the summer. And that's important to maintaining and strengthening the business-customer relationship that is the most valuable asset of any business.
The PERC campaign neither duplicates nor substitutes for the outreach that propane companies are doing with their consumers. It is meant to support their messages of being prepared and, at the same time, reach a broader audience with information about the benefits of using propane in the home.  For existing customers, the campaign will confirm that they made a smart choice to use propane in their homes. It will prompt will-call customers who haven't filled their tanks to do so. For nonusers, it will present propane in a positive, informative way that we hope will lead them to seek more information and consider using propane in their homes.
PERC will measure the effort, setting a baseline of consumer sentiment prior to launch and measuring awareness, favorability, and online activity once the media plan is completed. The data will tell us more about how consumers feel about using propane in their homes and, optimally, steps we can take in the future to grow residential use.

Ultimately, the goal of the PERC Consumer Safety Preparedness Campaign is connecting with residential propane customers. That's always a good idea.

Roy Willis is president and CEO of the Propane Education & Research Council (PERC).