RE:RE:RE:Thoughts on SPBOne part of their new business strategoy on the propane side is to raise prices on seasonal/low volume customers. If the client is not purchasing enough propane, their tank rental jumps from $100 to $300 annually. These customers have been a loss to the company. So either charging more for the tank rental, or getting them to use more propane are the only solutions. If SPB loses 20% of these clients but 80% keep their tanks and pay the higher rates, SPB will be much better off and able to service those 80% clients left better as well.
Everything costs more from the tank costs, recertification, and labor. This is helping to drive focus to where the profits are actually being recognised. Clients who are not profitable are being charged more for tank rentals to compensate or if they do not want to pay the higher rental rates, we pickup their tanks and someone else can lose money on them.
Experienced wrote: Specific....,interesting question
I guess the problem with this is that it was a June statementand so they didn't have the info from the July PR and hence their price forecast/recommendation didn't work out which is not a criticism of them.
In my view, the July PR raises a question about the recurring revenue when they are going to change their business strategy. Some of their other points still hold in terms of execurtion and risk.