LP Gas, April 2014

GUEST COLUMNIST RICHARD GOLDBERG Minimize customer losses Dont take negative sentiment from winters propane price spikes lightly I magine you come home from work early one day walk into your bedroom and find your spouse in bed with someone else The other man or woman flees and your spouse apologizes Thats the end of it right Things just return to normal Of course not Yet from talking with some propane dealers recently that seems to be their take on the aftermath of this winters extraordinary price surge When I ask about their strategy for communicating with customers in the next six months I often hear that calls are starting to die down the media is doing a good job getting the word out or Im afraid if I raise this issue Ill just open a wound Unfortunately history tells us these dealers are wrong Whether its justified or not a large number of propane customers feel theyve been taken advantage of this winter And theyre not going to forget the pain of the highest bills in recent history anytime soon regardless of whether prices drop in a week in a month or in three months The real question is How badly will you the propane dealer get hurt from this mess And conversely How much can you benefit by playing it smart Learn from others mistakes Weve learned an extraordinary amount about price spikes and their impact on energy consumers over the last 20 years Weve interviewed thousands of propane and oil customers and have orchestrated recovery strategies for many industry leaders Based on what weve seen in the past there are two things that are crystal clear First this kind of price spike is serious for customers Its an experience that can severely erode their trust in you and their confidence in your product More than any other marketing challenge youre likely to face it puts more of your customers at risk of leaving you and at risk of leaving you within a very short time frame Second most of you hurt yourselves badly either by underestimating your need to communicate or by doing a poor job when you do Here are some mistakes dealers commonly make as well as some of the steps you can take to minimize your damage and maximize your gain Mistake 1 Thinking that as long as they dont blame you for the spike youre out of the woods Have you ever had a friend tell you Wow you must be doing great with propane prices so high The research shows that even if customers dont blame you for rising prices many think you make more money as a result You dont pull the trigger But you drive the getaway car Is that fair No but fair doesnt enter into it Heres how this often plays out Your reality You struggle every time you have to raise prices to keep up with surging wholesale costs Customers perception You raise prices fast but lower them slowly Your reality You time deliveries to make sure you dont run out on anyone and always have fuel for your customers Customers perception You time deliveries for when it suits you best Your reality You short fill tanks because prices could go down and you want to protect customers Customers perception You wait to make deliveries until prices are highest You know better than anyone that these perceptions are wrong But the perception of your customers is the reality of your business Heres another reality You have a powerful story to tell that can build trust and appreciation among your customer base For starters you hate price spikes You also dont raise your prices as much or as fast as wholesale prices rise Your delivery efficiency plummets in times like these You suffer extraordinary cash flow and operational challenges especially when high prices are coupled with supply allocations and severe weather conditions And yet you still manage to keep your customers safe and warm But guess what Most of your customers dont have a clue about this Because you dont do a good enough job of telling them All they know is that they are paying a lot of money it hurts and there must be someone to blame Mistake 2 Ignoring the wake up call In a large research study conducted by one of our clients customers were asked What is the one thing that would cause you to leave your propane company High prices was a predictable answer but surprisingly not the most common answer The No 1 reason customers would leave was If I thought they were cheating me And when prices are this volatile that conclusion is much easier for customers to reach This raises the prospect of a dangerous spring summer and fall 22 LPGas April 2014 www LPGasmagazine com