Illustrative case study · Private Equity

Gas buyers stay through a rise when cylinders are managed.

Regional gas distribution is fragmented, so a private equity investor saw a case for buying one distributor and lifting prices. How many buyers would stay through a rise, and what holds them? We interviewed 160 contractors and manufacturers who choose their gas distributor, and the deal team had the report in 14 days.

Illustrative scenario

Samplen = 160

Illustrative report

Industrial Gas Distribution Buyer Study

If a new owner raises prices, how many buyers stay, and what keeps the ones who do?

Study architecture

Map loyaltyWhat keeps buyers with their distributor, indexed

Test the priceA four-step price ladder shown in dollars on each buyer’s own bill

Size the bypassWho already buys gas direct from producers, and which gas

Scope

Buyers who rank price high may still stay through a rise if leaving means swapping every cylinder on site.

Sample

160

Purchasing leads at welding and mechanical contractors and at manufacturing plants.

Research by

Study typePricing study

ScenarioIllustrative

Industrial gas buyers · Executive reportExecutive summary

Executive summary

Gas buyers would stay through a 6% rise where their distributor manages the cylinders

The 160 contractors and manufacturers describe what keeps them with their gas distributor. They name on-time delivery and price first, and 64% would stay through a 6% increase. Who keeps the cylinders stocked separates the buyers who hold: 89% of managed accounts would stay, against 43% of buyers who order their own. 24% already buy some gas direct, including 61% of buyers with an on-site bulk tank.

64%n = 160

would stay through a 6% increase

89%n = 74

of managed accounts would stay at 6%

43%n = 86

of self-stocking buyers would stay at 6%

24%n = 160

buy some gas direct from producers

Figures rounded. Base n = 160 buyers unless stated.

Top lines

1Delivery and price come first, and managed stock ranks fourthLoyalty driver index03

2Most buyers stay through a 6% increase, and a third through 9%The price ladder and the last price rise04

3Managed cylinder stock separates who holds through 6%Price tolerance by account trait05

4Direct buying follows the bulk tank, and few would buy cylinders directBuying from producers06

5Sample, screener and quality controlWho we interviewed and how07

AAppendixQuestion flow and data tables09

Sample

160 gas buyers

Segments

90 contractors, 70 manufacturers

Method

AI-moderated interviews with a price ladder

Markets

US regional gas distribution

Illustrative report. The company, scenario, and all figures are fictional.

Illustrative report02

Illustrative reportExecutive summary

Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.

The engagement

Delivered in

days, with the report, the data file and a live readout.

Interviews

160

Purchasing leads at contractors and manufacturing plants.

Audiences

90 contractors and 70 manufacturers.

Method

Price ladder

Four rises shown in dollars on each buyer’s own monthly gas bill.

The brief

Client

A private equity investor

Decision

Whether buyers would stay through a price rise

Stage

Commercial diligence, before a bid

How we ran it

Approach

AI-moderated interviews with a four-step price ladder

Measured

Loyalty drivers, price thresholds, cylinder service, direct buying

Sample

Contractors and manufacturers who order gas and pick the distributor

Headline figures

Price ladder64%

of all buyers would stay through a 6% increase without seeking quotes

Managed stock89%

of buyers whose distributor manages their cylinders would stay at 6%, against 43% of the rest

Going direct24%

already buy some gas direct from producers, led by buyers with an on-site bulk tank

The question

If a new owner raises prices, how many buyers stay?

The case funded growth with higher prices after the purchase, so it turned on the buyers: the people who order the gas and pick the distributor, with contractors compared against manufacturers.

What keeps buyers with the distributor they use today?

How big a price increase would send them to another distributor?

How many buyers already buy gas direct from the producers?

What we did

How the study ran, start to finish.

1Kickoff
A price rise, and who stays.
If we buy a regional gas distributor and raise prices, how many of its buyers stay? The kickoff turned it into three questions: what keeps buyers loyal, how big a rise sends them to rivals and how many already buy direct.
2Design
Two buyer types, rises in dollars.
The screener let through only people who order the gas and pick the distributor: 90 contractors and 70 manufacturers. A four-step price ladder put each increase in dollars on the buyer’s own monthly gas bill, and one question asked who keeps their cylinders stocked.
3Fielding
Would-be switchers, on the last rise.
Buyers spoke by voice or text for a median 32 minutes, quant and qual in one conversation, and would-be switchers said what they did at the last rise. The researcher read all 184 and removed 24 for duplicates or roles outside the screener, leaving 160.
4Analysis
Cylinder service splits who stays.
The researcher crossed price tolerance with contract length, spend and service, and who keeps the cylinders stocked mattered most. Through a 6% increase, 89% of buyers whose distributor manages their cylinders would stay, against 43% of those who order their own.
5Readout
Managed accounts hold through 6%.
The researcher presented the 36-page report, built on the price ladder and loyalty driver index, at a live readout for the deal team, along with the data file. The first-year plan now pays to move self-stocking accounts onto managed service before any price change.

What we found

Four findings from the report.

Summary

Buyers rank on-time delivery and price first when asked what keeps them, and 64% would stay through a 6% increase. Who keeps the cylinders stocked separates who stays: 89% of buyers whose distributor manages their stock would stay, against 43% of those who order their own. Direct buying follows the bulk tank: 24% buy some gas from producers, 61% of those with an on-site tank against 3% of the rest.

Industrial gas buyers · Executive reportTop line 1

Top line 1 of 4

Delivery and price come first, and managed stock ranks fourth

¹ Q12. How important is each of these in keeping you with your current gas distributor? Rated and indexed, n = 160.

² Driver ranks by segment are directional; see the appendix tables.

Asked what keeps them with their distributor, buyers put on-time cylinder delivery first and price a close second, at 100 and 87¹. Emergency delivery follows at 66. Having the distributor manage cylinder stock on site ranks fourth, at 55, yet top line 3 shows it predicts who stays through a price rise better than contract length or spend.

100index

on-time cylinder delivery, the top driver

87index

price, a close second

55index

cylinder stock managed on site, fourth

46%n = 160

have their distributor manage cylinder stock

What keeps buyers with their gas distributor

Loyalty driver index, top driver = 100 (n = 160)

How cylinders are supplied (n = 160)

Managed on siteDelivered on orderBuyer collects

Distributor manages the stock, by segment

Drivers rated on importance and indexed so the top driver = 100; scores are relative and do not sum to 100. Base n = 160 buyers: 90 contractors and 70 manufacturers.

Supporting evidence

Manufacturers are twice as likely as contractors to have managed stock: a plant keeps a fixed cylinder cage, a crew moves between sites. § 3.2
Price ranks higher among contractors, who buy cylinders job by job and compare quotes more often. § 3.3²

Illustrative report03

Industrial gas buyers · Executive reportTop line 2

Top line 2 of 4

Most buyers stay through a 6% increase, and a third through 9%

¹ Q18. If your distributor raised prices by each step, shown in dollars on your bill, would you stay without seeking quotes? Four steps, n = 160.

² Q22. What did you do the last time your distributor raised prices? Asked of the 57 who would not stay at 6%.

Each buyer saw every step as dollars on their own monthly gas bill. 83% would stay through a 3% increase and 64% through 6%¹, with no new quotes sought. Past 6% the share falls fast: 34% would stay at 9% and 14% at 12%. Manufacturers hold longer than contractors at 6%, 74% against 57%.

83%n = 160

would stay through a 3% increase

64%n = 160

would stay through a 6% increase

34%n = 160

would stay through a 9% increase

14%n = 160

would stay through a 12% increase

Share of buyers who would stay at each step of the price ladder

Would stay without seeking quotes, by increase (n = 160)

Would stay through 6%, by segment

What would-be switchers did at the last rise (n = 57)

Got quotes, then stayedStayed, no quotesSwitched distributor

Each step shown in dollars on the buyer’s own monthly bill; share who would stay without seeking new quotes. The last-rise question went to the 57 buyers who would not stay at 6%.

Supporting evidence

Of the 57 who would seek quotes at 6%, 14% switched at the last price rise; the rest stayed, most after getting quotes. § 4.2²
The segment gap at 6% tracks managed stock, which manufacturers have far more often (top line 1). § 4.3

Illustrative report04

Industrial gas buyers · Executive reportTop line 3

Top line 3 of 4

Managed cylinder stock separates who holds through 6%

¹ Q14. Who keeps your cylinder stock topped up: your distributor on site, or your own team ordering as needed? Single select, n = 160.

² Coded open-ended reasons for staying, managed accounts, n = 74.

One account trait separates the buyers who hold through 6%. Among the 74 buyers whose distributor manages their cylinder stock, 89% would stay through a 6% increase, against 43% of the 86 who order their own¹. The gap is statistically significant. Contract length and spend moved the share by far less.

89%n = 74

of managed accounts would stay at 6%

43%n = 86

of self-stocking buyers would stay at 6%

74of 160

buyers have their cylinder stock managed

2xratio

managed accounts against self-stocking buyers

Would stay through a 6% increase, by account trait

Would stay through a 6% increase

Would stay through 6%, by annual gas spend

Why managed accounts would stay (n = 74)

1Swapping every cylinder on site
2Cylinder rental terms
3A driver who knows the site

Two-proportion test at 95% confidence. Managed stock means the distributor counts and replaces cylinders on site; self-stocking buyers order cylinders as needed. Spend halves split at the median annual gas spend.

Supporting evidence

Managed manufacturers and managed contractors stay at similar rates; manufacturers have managed stock twice as often (top line 1). § 5.2
Managed accounts name the work of swapping every cylinder as the reason they would stay. § 5.3²

Illustrative report05

Industrial gas buyers · Executive reportTop line 4

Top line 4 of 4

Direct buying follows the bulk tank, and few would buy cylinders direct

¹ Q24. In the past year, has your business bought any gas directly from a gas producer? Single select, n = 160.

² Q26. Which supply types do you buy direct? Multi-select, asked of buyers who buy direct.

24% of buyers already buy some gas direct from producers¹, and manufacturers do so more than three times as often as contractors, 39% against 12%. Direct buying follows the bulk tank: 61% of the 57 buyers with an on-site tank buy some gas direct, against 3% of the rest. Only 9% would consider buying cylinders direct.

24%n = 160

buy some gas direct from producers

39%n = 70

of manufacturers buy some gas direct

12%n = 90

of contractors buy some gas direct

9%n = 160

would consider buying cylinders direct

Buying gas direct from producers

Buy some gas direct from producers

Would consider buying cylinders direct (n = 160)

YesMaybeNo

Would consider buying cylinders direct, by segment

Direct buying asked as any gas bought from a producer in the past year. Bulk means liquid or gas delivered to an on-site tank. Cylinder consideration asked of all 160.

Supporting evidence

Only 9% would consider buying cylinders direct, so the producer channel competes for bulk volume. § 6.2
Buyers with bulk tanks still order cylinders from their distributor for welding and specialty gas. § 6.3²

Illustrative report06

Top line 1 of 4 · page 03Illustrative report · top line 1 of 4 · swipeIllustrative report

Question 1 · Loyalty

Buyers say delivery and price keep them.

Asked what keeps them with their distributor, buyers put on-time cylinder delivery first and price a close second, at 100 and 87. Having cylinder stock managed on site ranks fourth, at 55.

On-time cylinder delivery100

Price87

Emergency delivery66

Managed cylinder stock55

Loyalty driver index, top driver = 100 · top 4 of 6 · n = 160

Question 2 · The price ladder

Most buyers would stay at 6%, and a third at 9%.

Shown in dollars on their own monthly bill, 83% would stay through a 3% increase and 64% through 6%. At 9% the share falls to 34%, and at 12% to 14%.

3% increase83%

6% increase64%

9% increase34%

12% increase14%

Would stay without seeking quotes · n = 160

Question 2 · Cylinder service

Managed stock separates who holds through 6%.

Among the 74 buyers whose distributor manages their cylinder stock on site, 89% would stay through a 6% increase, against 43% of the 86 who order their own. Contract length and spend moved the share far less.

89%managed accounts

43%self-stocking buyers

Would stay through a 6% increase · n = 74 vs n = 86

Question 3 · Going direct

Direct buying follows the bulk tank.

24% buy some gas direct from producers, and manufacturers do so more than three times as often as contractors, 39% against 12%. Among the 57 buyers with an on-site bulk tank, 61% buy direct, against 3% of the rest.

On-site bulk tank (n = 57)61%

Manufacturers (n = 70)39%

All buyers24%

Contractors (n = 90)12%

Buy some gas direct from producers · n = 160

“They swap our cylinders before we know we’re low. Moving that to someone new would cost me more than any price rise.”

Plant purchasing manager · Illustrative quote

Illustrative quotes

Three themes behind the numbers.

Managed stock

“Their driver checks the cage every Tuesday and swaps what we used. I haven’t placed a cylinder order since the program started.”

Maintenance manager

Last price rise

“When they raised prices last spring I got two quotes, then stayed. The savings didn’t cover pulling every cylinder off three job sites.”

Welding contractor

Going direct

“Our bulk nitrogen comes straight from the producer. Cylinders still come from the local distributor because they show up.”

Operations director

What the investor did

Three moves made with the report.

1The plan · from finding 3

Put cylinder service ahead of price.

The first-year plan pays to move self-stocking accounts onto managed cylinder service, where 89% would stay through a 6% increase, before any price change reaches them.

2The price · from finding 2

Capped price changes at the 6% step.

The model stops at 6%, which 64% of buyers would accept without seeking quotes; at 9% that share falls to 34%.

3The risk · from finding 4

Discounted bulk volume.

With 61% of buyers who have a bulk tank already buying some gas direct, and 9% open to buying cylinders that way, the model values cylinder volume in full and discounts bulk.

Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.

Bring us your next diligence question.

A senior researcher designs and presents every study.

Talk to our team

More private equity studies

Two-sided pricing study

Gas buyers stay through a rise when cylinders are managed.

How the study ran, start to finish.

1Kickoff

A price rise, and who stays.

If we buy a regional gas distributor and raise prices, how many of its buyers stay? The kickoff turned it into three questions: what keeps buyers loyal, how big a rise sends them to rivals and how many already buy direct.

2Design

Two buyer types, rises in dollars.

The screener let through only people who order the gas and pick the distributor: 90 contractors and 70 manufacturers. A four-step price ladder put each increase in dollars on the buyer’s own monthly gas bill, and one question asked who keeps their cylinders stocked.

3Fielding

Would-be switchers, on the last rise.

Buyers spoke by voice or text for a median 32 minutes, quant and qual in one conversation, and would-be switchers said what they did at the last rise. The researcher read all 184 and removed 24 for duplicates or roles outside the screener, leaving 160.

4Analysis

Cylinder service splits who stays.

The researcher crossed price tolerance with contract length, spend and service, and who keeps the cylinders stocked mattered most. Through a 6% increase, 89% of buyers whose distributor manages their cylinders would stay, against 43% of those who order their own.

5Readout

Managed accounts hold through 6%.

The researcher presented the 36-page report, built on the price ladder and loyalty driver index, at a live readout for the deal team, along with the data file. The first-year plan now pays to move self-stocking accounts onto managed service before any price change.

Four findings from the report.

Summary

Industrial gas buyers · Executive reportTop line 1

Top line 1 of 4

Delivery and price come first, and managed stock ranks fourth

¹ Q12. How important is each of these in keeping you with your current gas distributor? Rated and indexed, n = 160.

² Driver ranks by segment are directional; see the appendix tables.

100index

on-time cylinder delivery, the top driver

87index

price, a close second

55index

cylinder stock managed on site, fourth

46%n = 160

have their distributor manage cylinder stock

What keeps buyers with their gas distributor

Loyalty driver index, top driver = 100 (n = 160)

How cylinders are supplied (n = 160)

Managed on siteDelivered on orderBuyer collects

Distributor manages the stock, by segment

Drivers rated on importance and indexed so the top driver = 100; scores are relative and do not sum to 100. Base n = 160 buyers: 90 contractors and 70 manufacturers.

Supporting evidence

Manufacturers are twice as likely as contractors to have managed stock: a plant keeps a fixed cylinder cage, a crew moves between sites. § 3.2
Price ranks higher among contractors, who buy cylinders job by job and compare quotes more often. § 3.3²

Illustrative report03

Industrial gas buyers · Executive reportTop line 2

Top line 2 of 4

Most buyers stay through a 6% increase, and a third through 9%

¹ Q18. If your distributor raised prices by each step, shown in dollars on your bill, would you stay without seeking quotes? Four steps, n = 160.

² Q22. What did you do the last time your distributor raised prices? Asked of the 57 who would not stay at 6%.

83%n = 160

would stay through a 3% increase

64%n = 160

would stay through a 6% increase

34%n = 160

would stay through a 9% increase

14%n = 160

would stay through a 12% increase

Share of buyers who would stay at each step of the price ladder

Would stay without seeking quotes, by increase (n = 160)

Would stay through 6%, by segment

What would-be switchers did at the last rise (n = 57)

Got quotes, then stayedStayed, no quotesSwitched distributor

Each step shown in dollars on the buyer’s own monthly bill; share who would stay without seeking new quotes. The last-rise question went to the 57 buyers who would not stay at 6%.

Supporting evidence

Of the 57 who would seek quotes at 6%, 14% switched at the last price rise; the rest stayed, most after getting quotes. § 4.2²
The segment gap at 6% tracks managed stock, which manufacturers have far more often (top line 1). § 4.3

Illustrative report04

Industrial gas buyers · Executive reportTop line 3

Top line 3 of 4

Managed cylinder stock separates who holds through 6%

¹ Q14. Who keeps your cylinder stock topped up: your distributor on site, or your own team ordering as needed? Single select, n = 160.

² Coded open-ended reasons for staying, managed accounts, n = 74.

89%n = 74

of managed accounts would stay at 6%

43%n = 86

of self-stocking buyers would stay at 6%

74of 160

buyers have their cylinder stock managed

2xratio

managed accounts against self-stocking buyers

Would stay through a 6% increase, by account trait

Would stay through a 6% increase

Would stay through 6%, by annual gas spend

Why managed accounts would stay (n = 74)

1Swapping every cylinder on site
2Cylinder rental terms
3A driver who knows the site

Supporting evidence

Managed manufacturers and managed contractors stay at similar rates; manufacturers have managed stock twice as often (top line 1). § 5.2
Managed accounts name the work of swapping every cylinder as the reason they would stay. § 5.3²

Illustrative report05

Industrial gas buyers · Executive reportTop line 4

Top line 4 of 4

Direct buying follows the bulk tank, and few would buy cylinders direct

¹ Q24. In the past year, has your business bought any gas directly from a gas producer? Single select, n = 160.

² Q26. Which supply types do you buy direct? Multi-select, asked of buyers who buy direct.

24%n = 160

buy some gas direct from producers

39%n = 70

of manufacturers buy some gas direct

12%n = 90

of contractors buy some gas direct

9%n = 160

would consider buying cylinders direct

Buying gas direct from producers

Buy some gas direct from producers

Would consider buying cylinders direct (n = 160)

YesMaybeNo

Would consider buying cylinders direct, by segment

Direct buying asked as any gas bought from a producer in the past year. Bulk means liquid or gas delivered to an on-site tank. Cylinder consideration asked of all 160.

Supporting evidence

Only 9% would consider buying cylinders direct, so the producer channel competes for bulk volume. § 6.2
Buyers with bulk tanks still order cylinders from their distributor for welding and specialty gas. § 6.3²

Illustrative report06

Top line 1 of 4 · page 03Illustrative report · top line 1 of 4 · swipeIllustrative report

Question 1 · Loyalty

Buyers say delivery and price keep them.

Asked what keeps them with their distributor, buyers put on-time cylinder delivery first and price a close second, at 100 and 87. Having cylinder stock managed on site ranks fourth, at 55.

On-time cylinder delivery100

Price87

Emergency delivery66

Managed cylinder stock55

Loyalty driver index, top driver = 100 · top 4 of 6 · n = 160

Question 2 · The price ladder

Most buyers would stay at 6%, and a third at 9%.

Shown in dollars on their own monthly bill, 83% would stay through a 3% increase and 64% through 6%. At 9% the share falls to 34%, and at 12% to 14%.

3% increase83%

6% increase64%

9% increase34%

12% increase14%

Would stay without seeking quotes · n = 160

Question 2 · Cylinder service

Managed stock separates who holds through 6%.

89%managed accounts

43%self-stocking buyers

Would stay through a 6% increase · n = 74 vs n = 86

Question 3 · Going direct

Direct buying follows the bulk tank.

On-site bulk tank (n = 57)61%

Manufacturers (n = 70)39%

All buyers24%

Contractors (n = 90)12%

Buy some gas direct from producers · n = 160

Three themes behind the numbers.

Managed stock

“Their driver checks the cage every Tuesday and swaps what we used. I haven’t placed a cylinder order since the program started.”

Maintenance manager

Last price rise

“When they raised prices last spring I got two quotes, then stayed. The savings didn’t cover pulling every cylinder off three job sites.”

Welding contractor

Going direct

“Our bulk nitrogen comes straight from the producer. Cylinders still come from the local distributor because they show up.”

Operations director

Three moves made with the report.

1The plan · from finding 3

Put cylinder service ahead of price.

The first-year plan pays to move self-stocking accounts onto managed cylinder service, where 89% would stay through a 6% increase, before any price change reaches them.

2The price · from finding 2

Capped price changes at the 6% step.

The model stops at 6%, which 64% of buyers would accept without seeking quotes; at 9% that share falls to 34%.

3The risk · from finding 4

Discounted bulk volume.

With 61% of buyers who have a bulk tank already buying some gas direct, and 9% open to buying cylinders that way, the model values cylinder volume in full and discounts bulk.

Illustrative example. The company, scenario, and all figures are fictional. They show UserCue’s method and deliverable format. They do not come from any client study.

If a new owner raises prices, how many buyers stay?

What keeps buyers with the distributor they use today?

How big a price increase would send them to another distributor?

How many buyers already buy gas direct from the producers?

How the study ran, start to finish.

A price rise, and who stays.

Two buyer types, rises in dollars.

Would-be switchers, on the last rise.

Cylinder service splits who stays.

Managed accounts hold through 6%.

Four findings from the report.

Buyers say delivery and price keep them.

Most buyers would stay at 6%, and a third at 9%.

Managed stock separates who holds through 6%.

Direct buying follows the bulk tank.

Three themes behind the numbers.

Three moves made with the report.

Put cylinder service ahead of price.

Capped price changes at the 6% step.

Discounted bulk volume.

Bring us your next diligence question.

Industrial Fastener Market Dynamics

Commercial HVAC Installer Market

Accounting Firm Client Loyalty

If a new owner raises prices, how many buyers stay?

What keeps buyers with the distributor they use today?

How big a price increase would send them to another distributor?

How many buyers already buy gas direct from the producers?

How the study ran, start to finish.

A price rise, and who stays.

Two buyer types, rises in dollars.

Would-be switchers, on the last rise.

Cylinder service splits who stays.

Managed accounts hold through 6%.

Four findings from the report.

Buyers say delivery and price keep them.

Most buyers would stay at 6%, and a third at 9%.

Managed stock separates who holds through 6%.

Direct buying follows the bulk tank.

Three themes behind the numbers.

Three moves made with the report.

Put cylinder service ahead of price.

Capped price changes at the 6% step.

Discounted bulk volume.

Bring us your next diligence question.

Industrial Fastener Market Dynamics

Commercial HVAC Installer Market

Accounting Firm Client Loyalty