Steve Relyea, Butane-Propane News, June 2019
Propane marketers expect much quicker turnaround on orders of propane equipment than they did only four years ago. In response, wholesale propane equipment distributor Bergquist Inc. has launched a subscription-based two-day shipping program.
Called Bergquist Select Ship, the new program was launched April 15. It is available for all customer deliveries in the 48 contiguous United States. Those who enroll in this yearly subscription plan will be guaranteed two-business-day delivery on more than 60 Guaranteed Stock Equipment items. Customers can enroll in the Select Ship plan for $499 per year per "ship to" location.
"The 60+ guaranteed inventory items are our most popular 'tank set' items," explained Don Montroy, director of marketing at Bergquist Inc. "One of our of main segments of customers is propane marketers, and residential gallons are still the largest portion of their business. So, we wanted to provide a service they will get a lot of value from."
If Bergquist does not have the Guaranteed Stock Equipment items in stock at the time of a purchase or does not deliver items within two business days, the customer will receive a 10% credit on those items. Bergquist customers enrolled in Select Ship also receive free freight on all standard equipment, vent-free heater, and tankless water heater orders with no minimum. (Other regular exceptions apply.)
"We've heard people say how convenient a one-time freight charge at the beginning of the annual subscription is, especially since they currently spend more than the $499 Select Ship subscription with multiple equipment distributors throughout a year," Montroy said. "They don't have to worry about meeting minimum freight thresholds, with multiple vendors and with each order, going forward."
The changing expectations of propane marketers were the impetus for the launch of Bergquist Select Ship. When the wholesale distributor asked a marketing consultant company to survey propane marketers in 2015, it found that 29% of Bergquist customers expected delivery the next day and 12% in two days. None looked for delivery the same day. When the company conducted a similar survey three years later, in 2018, it found that customers were anticipating quicker turnaround. By then, 13% of customers expected delivery the same day, 25% the next day, and 33% in two days.
The firm found a similar trend when it surveyed other propane marketers who are not Bergquist customers. In 2015, 10% of non-customers expected delivery the same day, 19% the next day, and 39% in two days. In 2018, 18% looked for same-day delivery, 46% next-day, and 32% two-day.
"We were sort of surprised by these findings until we sat back and analyzed them," Montroy said. "In their personal lives, with personal purchases, people have come to expect that kind of service and quick delivery. That's especially true with e-commerce. Between the first survey and the second, over those three years, people have come to expect better service in their personal lives and other areas of life as well. Now they expect it in their work life, too."
Expectation of quicker turnaround was just one of the findings of the survey conducted for Bergquist by marketing consultant company Winsby Inc. The survey also found that propane marketers are most interested in quality and availability when shopping for propane equipment. Price is ranked only fourth or fifth in importance. That's true when choosing both a brand and a distributor.
When selecting a brand of propane equipment, propane marketers are most interested in reliability, performance, and availability of parts. In the survey, propane marketers were asked to divide 100 points among several different brand characteristics to indicate how important those characteristics are, relative to each other. Bergquist customers gave a total of 64 points to reliability, performance, and availability of parts. Non-customers gave 62 points to those same three characteristics. Delivery time was ranked fourth in importance, assigned 10 points by Bergquist customers and 11 points by non-customers. Price was ranked fifth, with 10 points from customers and nine points from non-customers. Five other brand characteristics included in the survey were ranked lower in importance.
When selecting a distributor of propane equipment, marketers want equipment availability and quality of equipment. Here, too, propane marketers were asked to divide 100 points among several characteristics. Equipment availability and quality of equipment were assigned a total of 50 points by Bergquist customers and 51 points by non-customers. Three other distributor characteristics were awarded a double-digit amount of points by customers and/or non-customers. Knowledgeable representatives were given 15 points by both groups; quick delivery was given 12 points by both; and price was given 10 points by customers and six points by non-customers. Eight other distributor characteristics were given only single-digit amounts of points.
"We were not surprised at all about price being less important to customers when choosing a brand or distributor," Montroy said. "I think as our customers receive great experiences through some of their personal purchases, whether it's two-day shipping, ample inventory when they order, quality products, or outstanding service from sales representatives, they expect it at work, too. Many people demand that kind of service. Time and convenience are just as important as anything else."
The survey also found that most propane marketers prefer to order propane equipment by phone. Last year, 71% of Bergquist customers and 86% of non-customers said they prefer ordering by phone. Ordering online is the second most-preferred method, selected by 13% of customers and 11% of non-customers. Ordering by email, fax, or in person are preferred by only single-digit percentages of marketers. Between the 2015 survey and the 2018 survey, the percentages of customers and non-customers preferring to order by phone or online increased.
"I think many marketers still prefer to order by phone because they have questions that accompany their orders," Montroy said. "We take tremendous pride in understanding propane equipment and the applications different equipment are used for, whether it is vapor or liquid transfer."
"We definitely see a trend toward increased online ordering for more of the transactional items, or items that are typically more straightforward," he added. "As more people become comfortable with e-commerce, we only expect that trend to grow."
Another finding was that propane marketers expect to be contacted by a propane equipment salesperson monthly, but do not want to be contacted weekly. Last year, 54% of Bergquist customers and 38% of non-customers said monthly contact is what they expect. In addition, 63% of customers and 44% of non-customers said they consider weekly contact by a salesperson to be too frequent.
"We were excited to see that many propane marketers still like to have regular contact with sales representatives," Montroy said. "We took that information as validation that us maintaining the availability of our staff to customers, whether in person, via email or phone, is important to their businesses and ours."
The survey also noted that word of mouth is very important. In last year's survey, 65% of Bergquist customers and 57% of non-customers said they prefer to find a propane equipment distributor through word of mouth.
"We were surprised, but delighted, to see how much word of mouth continues to play a role in propane marketers locating a distributor to partner with," Montroy said. "We think good old-fashioned customer service is still the best way to do business and treat people."