Propane Shortage 2014!

 

Breakdown:

While our great nation faces many crises of different types, it seems that none of them come on as fast and furious as those caused by Mother Nature. The most recent example of this has been a combination of a wet corn crop that required more fuel to dry and the horrible cold snap that has gripped the winter of 2013/2014 ; both of which have become major causes of an unprecedented propane shortage in the Midwest. Propane, which typically hovers at just above $2 per gallon, has gone up as high as above $5 in certain areas, making it extremely difficult for customers who heat their homes or cook with the gas to pay for it. Even those who can currently afford propane are facing another problem as the shortage is making it hard to even get the fuel, high priced or not.

Wholesale propane prices are 50% higher than they were one year ago which is making it difficult for dealers to bring their prices down. To drive costs even higher, a major pipeline into the Midwest was shut down in December which has forced companies to rely on truckers to bring in a much larger portion of their propane reserves. The shift has proved to be both costly and less reliable, especially because of the amount of storms the country has been bombarded with this winter.

Sadly, many customers who fill their propane tanks and opt to be billed later will be in for a rude awakening as what would have been a $4-500 bill before could now be closer to $1500. Of course, it’s either deal with the consequences of high prices later or face temperatures that are dipping as low as -50 degrees in some areas without the benefits of heat. It’s no wonder the amount of complaints that propane companies are receiving this winter is up by 100s of percent. By stark contrast, propane stocks are down 44%.

Opportunity!

The messages that propane companies communicate to their customers today will ultimately impact the way these same customers value the relationship with their suppliers tomorrow (and everyday thereafter). This is never truer than in times of turmoil, such as during the shortage and price increases that the propane industry in the Midwest face today. There are few things that customers remember more than how a company they have affiliated themselves with treats them during times of trouble. This means that taking the right steps could solidify long-term customer loyalty in a way that ‘business as usual’ could never accomplish. Embracing a few simple concepts can help to turn most any customer breakdown into an opportunity with lasting positive repercussions.

Honor your contracts. The propane shortage will eventually end, but if you lose your customers, you will have no one to deliver it too. While it may be more difficult to offer lower prices to new customers, those who prepaid or made a promissory contract before the shortage began will be expecting your end of the deal to be honored. To do otherwise would mean breaking your word and during the rough spots, sometimes your word is all you have.

Absorb as much of the higher fuel costs as possible. The less you pass onto your customers, the more grateful they will be. Remember that this is a temporary crisis and one that can be used as a learning tool for how to better prepare for possible propane shortages in future years. However, your customers are the only current resource more important than the propane itself. By not finding a compromise that allows you to both share the burden, you are sending a message that says their loyalty is worth nothing. This will ultimately drive them to take their business elsewhere. Possibly another form of energy altogether!

Communicate to your customers. Don’t wait for them to call you frustrated and bewildered. Send out letters and emails as well as publish blog and website content to let them know that you are doing the best you can to work through the shortage of gas and high prices. Make it known that their concerns, complaints, and frustrations are justified and that you are suffering right along with them. Use language as a tool to diffuse their anger and reinforce their commitment rather than encouraging their frustrations

Let customers know where they can go to receive aid. Several state governments and non-profit organizations are stepping in to provide relief. There are emergency numbers to call for aid and other organizations that can be contacted online. In Missouri, some of the most prominent organizations include:

LIHEAP-Low Income Home Energy Assistance Program – 573-751-6789

Salvation Army  – 573-634-8357

Pathways   – 1-800-833-3915

Missouri residents can also visit LIHEAP Clearinghouse to learn more about local programs and charities in their specific county or city. Anytime customers are communicated to, whether via direct mail, phone conversation, or blog post, this vital relief information should be included. The more propane companies do to communicate where their customers can go to receive additional aid, the more loyal they will become knowing their provider is looking out for their safety on a very ‘human’ level.

Here’s the bottom line. While there is no way to snap a finger that causes propane stores go up and prices to go down, there is plenty that we can do to let customers know that we are working for them and not against them. Communication is the key because the right language will help each customer to feel vindicated. More importantly, it will help them find the best resolution for their particular circumstance while we all wait for Mother Nature to start cooperating again.