Article

Planning for the future

Most propane companies align their marketing plans with their business fiscal years for budgeting purposes.

If you operate your business on a calendar fiscal year, it is time to review your performance and renew your marketing plan for next year. For companies that have had a successful business year-to-date, this will not take much effort. For others, it may be a major undertaking.

Here are a few things you can do to prepare for that 2010 propane marketing plan:

• Review your key performance indicators (KPI) against goals. This may be a diverse list, depending on what you consider important enough to measure. You have probably heard the saying: “What doesn’t get measured doesn’t get done.”

Some of the important marketing measurements are usually gallons, profitability, customer gain and loss, and individual marketing program success such as number of customers on a budgeted billing plan. These KPI results are more useful if you can break them down by customer segment and profitability ranking. You also may want to combine these year-to-date measurements with a year-end forecast so you have an accurate estimate for the full year.

• Review your business plan results. Does your propane business performance meet or exceed expectations? Look for areas where better marketing could have helped business performance. In other words, is your marketing plan supporting your business plan expectations? If not, putting more emphasis on marketing to some current and prospective customer segments may be part of the solution to your business shortfall.

• Review and update your SWOT analysis (SWOT = strengths, weaknesses, opportunities and threats). Performing this analysis of your business is a fundamental part of strategic planning. It is an effective way to measure the internal environment of your company against the external environment in which you compete. If you have performed a periodic SWOT analysis, you can look for trends associated with each part and consider how marketing strategy and tactics should be adjusted. If you go online and Google “SWOT analysis,” you can find many examples from which to learn.

• Review your strategic plan and adjust as necessary. Your strategic plan defines your direction and helps you to make decisions on allocating marketing resources to pursue this strategy. After you have reviewed KPI results and business plan results against goals and updated your SWOT analysis, you should be able to determine if your strategic plan needs to be adjusted to match with trends and next year’s business plan. An example of an adjustment to your strategy could be to market an all-gas home approach to your current residential customers and the builders with whom you work.

• Review your marketing tactics currently employed and adjust as needed. Marketing tactics are specific, measurable actions that should keep you moving toward fulfillment of your strategic plan. An example could be the offering of price protection to each new residential customer.

Was each of the marketing tactics successful and did it support your KPI performance goals and overall strategic plan? Did you allocate your resources properly between the tactics? This is the time to weed out the tactics that weren’t successful or strengthen and improve the tactics that were not as successful as they should have been. Also look for new tactics that may need to be employed. Developing a promotional plan for tankless propane water heaters with all current residential customers is an example of a new tactic you may want to consider that would support that all-gas home strategy change.

• Review your advertising plan and adjust as needed. What worked and what didn’t? The only way you know is to measure the results of each of your advertising promotions. A good rule of thumb is that, if you can’t measure the effectiveness of a specific advertising promotion, you shouldn’t be spending the money. The days of “whoever has the biggest yellow pages ad wins” are over! Your advertising budget has its limits, and you need to target your advertising efforts as much as possible to get full value from your advertising dollars.

Perhaps this is the time to spend a little less on newspaper advertising and finally get around to developing a simple Web site. Maybe it’s time to check out this newfangled Twitter and Facebook stuff you have been hearing about to see how it may apply to your business. Some propane companies are already experimenting with these social networking tools.

It may be time to set up an advertising calendar to schedule all of your promotions and advertising support and actually follow the calendar for peak results. The most common advertising mistake that propane marketers make is late planning and execution.

The marketing planning steps I have just reviewed apply to your propane business, no matter how big or small it is. A new propane business can survive for a while using those guerrilla marketing tactics of low-ball price and installation giveaways, but that is not an affordable path on which to stay. Your lost margin opportunity will far surpass the cost of a well-executed marketing plan. It is a different energy world out there, and you need a good marketing plan and proper execution to be successful.