Don’t tell anyone, but there is a burgeoning market out there that is overlooked and underserved. With advanced technologies interconnecting every layer of industrial plants from fiber optics to fire alarms, facility uptime is crucial, and businesses are scrambling to find qualified contractors to handle the upkeep of these sophisticated infrastructures. Traditional maintenance contracts have evolved from essential MRO to include infrared scans, motor surge tests and documented performance analyses. The electrical contracting firm that possesses the skills to integrate a team into this high tech environment may find a customer for life.
A sure thing
According to ELECTRICAL CONTRACTOR’s 2006 “Profile of the Electrical Contractor” Topline Report by Renaissance Research & Consulting, New York, maintenance/service/repair (MSR) work accounts for 30 percent of the revenue of electrical contracting firms. What the report doesn’t say is that there is a growing trend among industrials and manufacturers to outsource the MSR in the form of maintenance contracts. Traditionally, these contracts fall into one of two categories:
1. Routine inspection scheduled periodically for the length of the contract
2. Daily on-site presence of an electrical firm at the customer’s business
For a business owner to choose one over the other depends on the needs and capabilities of the physical plant. In deciding if your company is capable of handling this type of work, take a realistic look at the strengths of your team, and determine if your personnel can blend into the work force of a corporate culture. It’s one thing to have the knowledge and skills for the job. It’s another to have the proper mindset.
Once a contractor is awarded a maintenance contract, it can become a vital part of the cash flow and a key ingredient to dependable monthly income. In most cases, the contractor will want to hang on to this business. By following a few simple guidelines, you can improve your chances of renewing or renegotiating your maintenance contracts year after year.
After the wedding
Deliver unsatisfactory work performance during the contract period, and it is unlikely the customer will want to sign up again next year. So, the first step on the path to renewal begins on the first day of the initial contract. Bring your top performers to what could turn out to be your best customer. Don’t bring your worst employees. After all, they represent the face of your company.
“In a large part, your success is driven by the talent and skills of the people you have working for you,” said Mark Perry of MP Electric Inc., a Waco contracting firm that has crews embedded in three of the largest industrials in central Texas.
However, skills alone are not enough. Appearance and attitude counts, too. Sloppy appearance equals sloppy work in the eyes of the customer. Conversely, having your workers wear company shirts enables plant employees to identify them. As for the attitude part, any on-site technician needs to have the disposition to get along with a variety of personality types and a clear understanding of what the customer wants.
What customers want
One of the most valuable and overlooked areas of customer service involves learning what you don’t know. Until you know what the customer expects from your firm, you can’t hope to take care of him or her. Understanding customer requirements is the most effective way to put your firm in a position for contract renewal. A typical list of requirements might include the following:
- Reduce maintenance costs by outsourcing electrical work (rather than hiring full-time electricians).
- Simplify plant operations by focusing on core business.
- Rely on electricians to keep customers informed of potential problems.
- Depend on electricians to manage the electrical maintenance.
- Consolidate multiple tasks, such as machine maintenance and troubleshooting, under one service provider.
- Provide a disciplined process for preventive maintenance.
The best way to gather information about the customer’s needs is also one of the most often ignored: Ask. Then, don’t just listen; connect. Discuss the things that no one else would think to ask. “What objectives does your company have in the year ahead?” “What additional services do you think you might need from our company beyond the scope of work?”
Before a company will renew its maintenance contract, it has to feel the service received was worth the price. Often, it’s simply a matter of understanding the work performed. Sometimes we talk over the head of our customers without even knowing it. Most people are unfamiliar with the lexicon of the electrical trade, though most business owners will not admit when they don’t understand the work as explained by the electrician. It is important to take time to describe, in layman’s terms, the nature of the work provided. Some customers will want to know more details. Others will only want to know that the work was properly done. Be flexible. Present the information in different formats.
For example, keep accurate records of work performed, problems resolved and potential disasters prevented. Then, schedule short meetings with your client for periodical checkups. To get a discussion started, consider asking questions such as the following:
- Is everything meeting expectations?
- Are any of our employees providing exceptional work?
- Are any of our employees performing inadequately?
- What area do we need to improve, or what would like to see us do differently?
- What else can we do that we’re not doing?
By taking the time to check in with your customer, you can find out how your work performance is perceived. Your presence in these meetings also sends the message that you are involved in the daily management of the facility. Bringing the customer up-to-date on what you are working on in the plant is a way to show value that is measurable.
All things electrical have a life cycle. Customers need to know that not having a maintenance contract can end up costing far more than the investment in a contract. The possibility of the unexpected needs to be taken into consideration. A catastrophic failure can far exceed the cost of several years combined of a maintenance contract. Remind customers that, as equipment ages, the likelihood of an unforeseen problem increases. Some breakdowns and electrical overloads are unavoidable, but having an extensive maintenance contract in place offers a degree of insurance against preventable problems.
When it’s time to renew
It’s less expensive to keep a customer than it is to find a new one.
The best way to ensure a renewal of the maintenance contract is to ask before it expires. Be prepared to prove that having your firm involved is more efficient than doing the work with the customer’s own people. Point out that your familiarity with operational procedures, safety requirements and physical plant layout will allow for continual improvement of work performance. Bringing in someone new will mean starting the process all over again. During renegotiations, press for at least a two-year contract. Your customer benefits from a reduction in paperwork and administrative costs involved in implementing a new contract.
Finally, when renegotiating the contract, do your homework. Consider future needs, changes in plant conditions, operational changes, addition of new equipment, change in personnel and so on. Point out to the administration that you are both interested in the same thing: a year of trouble-free operation.
A report by the Board of Labor Statistics shows that the demand for electricians will increase throughout the next decade “as new technologies are expected to continue to stimulate the demand for these workers.”
As the shortage of skilled craftspeople increases, the need for manufacturers to outsource electrical maintenance will grow. Contractors who find a niche in this market will always have work.
The important thing is to deliver to the customer a contract that’s worth the price. Mainly, keep this question in the back of your mind: “Does the value to your customer equal the fee paid to you?” Striving to answer this question affirmatively will drive you to exceed the expectations of the customer. EC