There’s no denying that propane companies across the country face headwinds when trying to add new customers. Inflation and a challenging regulatory environment are squeezing the margins of many businesses. The marketing landscape has changed dramatically, too. When potential customers look for a propane provider, they have nearly endless resources to glean information and compare prices and reviews. In this environment, it is crucial to communicate your company’s value to potential customers.
What does this mean in practice? It necessitates that you and your staff thoroughly understand what makes your services better than those of your competitors. This brand differentiator is the driving force to not only attract prospects to your website but also compel them to call you or submit an inquiry, ultimately converting them into long-term customers. To give an idea of how winning campaigns — which build brands and grow revenue — are developed, here is an overview of the process.
Where Do You Start & Where Are You Going?
They say that every journey begins with a single step, but that’s not exactly true. You can’t take the first step without knowing your destination. That is true of marketing your propane business, too. You may have fantastic resources — eye-catching search ads, sharply designed emails and a robust budget — but it’s all too easy to squander them if you don’t set clear, measurable objectives.
Growth can mean different things to different companies. For some, it means growing gallons and attracting more customers. For others, it means expanding into other revenue streams like commercial accounts, forklift cylinders and equipment sales.
Let’s say a propane retailer wants to add 100,000 gallons to their annual sales. If their average customer uses about 500 gallons a year, it means they need to attract 200 new customers through various marketing streams.
With this destination set, we can figure out the most effective way to get there.
What Is a New Customer Worth?
When mapping out the route to those 200 new customers, the process starts by looking at the company’s conversion rate. How many viable leads are likely to become paying customers?
If the company’s conversion rate is 20%, 1,000 leads would need to be generated. Of course, not every person who visits your site will submit an online inquiry or click a button to call you. We have seen that about 10% to 30% of online visits result in a lead. So, this hypothetical company would need about 10,000 website visits to be confident they’ll generate 1,000 leads.
Many tools can drive high-value traffic to your site, including display advertising, pay-per-click campaigns, targeted emails, social media campaigns and more. Each of these tactics has different strengths and comes at a different cost. A marketing campaign that adds real value to your business will determine how much each new customer is worth to your bottom line.
If a company’s margin on each gallon of propane is one dollar, the net revenue of a customer using 500 gallons annually would be $1,500 over three years. What are you willing to invest up front to add that revenue to your books?
Why You & Not the Competition?
The essential factor in formulating a successful marketing strategy is understanding how to demonstrate your value to potential customers. It is the North Star in your journey to convince consumers to choose you. Ask yourself, “Why would someone pick my company over the competition?”
When a customer realizes their tank is nearly empty, can you show up on the same day? Do you have on-site storage that keeps your trucks on the road when other companies run out? Do you offer pricing programs or monitoring services that competitors don’t?
This differentiator should be front and center in your marketing material, website content and digital campaigns, telling people who are looking for a propane provider that you can give them a unique level of service and responsiveness that other folks can’t. You’re giving them a compelling reason to call you or send you a message through your website.
Every person in your company should be able to answer what makes you different. If they can effectively relate this differentiator when speaking to a prospect, it will positively impact your conversion rate. However, if your employees aren’t selling this to people every day, you won’t see as many leads turning into customers.
What Are You Doing to Define Your Brand?
If you want to successfully develop a winning message that resonates with people, you need a marketing partner who can help you create and deploy it at every stage of the process. This partner can help you:
- Refine and sharpen your unique messaging, so people understand the value you bring as a propane provider.
- Develop your website so it ranks consistently high in organic search traffic. It’s also key to have a site that’s organized to encourage visitors to take action and reach out to your team.
- Identify marketing tactics that best suit your goals, then craft eye-catching campaigns and direct them to the highest-value targets.
- Boost your conversion rate with sales training for your staff. Our firm sees conversion rates anywhere from 20% all the way up to 50%. Best-in-class companies tend to have a rate of 30% or higher.
Your marketing partner should be an ongoing collaborator, taking you through your marketing results and leveraging insight to further hone your message and your tactics.
What We’ll Be Discussing in the Coming Year
This will be the first part of our ongoing series on “Marketing & Branding Your Company From the Ground Up.” We intend to provide a primer on tried and tested methods for building and managing your brand and developing marketing strategies that will grow your customer base and revenue.
The topics we’ll discuss in the coming year are:
- Developing powerful creative and branding strategies
- Understanding various different marketing tactics
- Analyzing results to optimize your marketing spend
I’m excited to go on this journey with you. That said, if you can’t wait to dig into these topics and explore how your business can thrive with a winning marketing plan, please don’t hesitate to reach out to me. I’ll be happy to give you a “sneak preview.”
