The economic recovery, almost without exception, has been coming slower than snail’s pace for the construction industry. The stimulus strongbox still has project cash in it, but much of it is for massive jobs the average contractor isn’t in place to handle, and by some estimates, a quarter of the nation’s electricians are out of work. Whoever has business now has less of it, and it is mostly smaller jobs than they are used to. By all indications, most jobs will stay that way for the foreseeable future.
If these times have taught us anything, it is that there is no quick fix for lingering economic malaise, and bailouts cannot be counted on to instantly boost construction. While thinking outside the fuse box has a certain adventurous appeal, many industry veterans seem inclined to refocus on traditional resources, capabilities and relationships as the best means of finding work.
Priming the pump
One thing about a recession and the ensuing recovery is that it frees up a lot of the boss’s time.
“The critical issue for contractors to understand if they’re going to be successful, is that their business is not in the office but in the field,” said Fred Sargent, former CEO of Sargent Electric Co., Pittsburgh. “Unfortunately, when times are good, they tend to spend too much time behind the desk on clerical management issues. But slow times like these, when business doesn’t come walking in the door, give contractors the opportunity to get back out in the field and talk to two very important groups of people: their own electricians and the customers.”
Sargent reasoned that a busy schedule, in many ways, demands more top-down than bottom-up communications, and opportunities can be lost in the process because, after all, business is good.
“The best source of intelligence has always been the combat infantryman,” he said. “Now is the time to take advantage of that. If you want to find new work today, not a few years from now, you should be out walking the jobs and talking with your foremen and electricians.
“These aren’t guys who read a magazine article about some potential future development in the industry—they can tell you about something they’ve actually seen on the customer’s premises that can be turned into the next job. It’s amazing how much more forthcoming the customer’s people will be with your people than the customer will be with you in a manager-to-manager environment. You get some information, but your foreman on the site will get the complete story.
“The problem is that field people by nature aren’t inclined to volunteer information. They assume that whatever it was they heard that is not directly related to the work immediately at hand is somebody else’s job to worry about. You have to prime the pump. Ask them what they’ve seen and heard. Get them used to reporting back anything, no matter how small, that might lead to new business. Then it’s your responsibility to make judgments about how you can make some business out of it right now,” Sargent said.
Showing up on-site
The other group of people to whom the contractor should be talking more is the customers/owners, in Sargent’s opinion. According to him, people with limited capital still need affordable solutions today, and contractors need this business.
“If you get out in the field and see what people want right now and what they can spend in this economy, you’ll have a much better handle on what kinds of business you should be pursuing today,” he said.
"Once you complete one of these jobs, you can take this concept to other potential customers. This creates an incredible dynamic because the first customer becomes a third-party reference, and you can show other customers the finished job.”
While initial discussions between contractor and customer/owner are generally across-the-desk formal office meetings, Sargent believes there are some dress code considerations for subsequent visits to the job site.
George Carlin, business visionary
A number of years ago at an industry function, an older contractor who had exponentially expanded his residential business was asked how he did it.
“In residential work, it’s all about references,” he said. “You have to impress the right person if you want to get more new business.”
But who’s the right person? he was asked.
“Did you ever see George Carlin’s routine about the difference between men and women?” he asked. “It goes like this: To a woman, a house is a home that has to be kept clean and constantly improved. To a guy, a house is the place he keeps his stuff while he goes out to get more stuff.
“So if you understand this, then you know who you have to take down to the distributor’s lighting showroom and have the salesperson there show her models and catalogs and find out exactly what she wants. Then comes the easy part where you install everything just the way she wants it.
“And then, after she invites her friends over for coffee, your phone starts to ring.
“And don’t worry about the guy. He’s glad to pay the bill because she’s happy. Besides, he’s busy getting more stuff.”
“In one of Woody Allen’s films, he says, ‘80 percent of life is just showing up.’ If you show up later on the job while work is in progress, there are a number of collateral benefits,” he said. “The customer is appreciative because he’s paying you a fair amount of money. Also, there will be an effect on productivity when your people see the boss walking the job.
“If you want to present yourself with credibility to suggest some logical, common-sense additions that your field people say can be done immediately, and you come in to the owner’s office wearing your coat and tie, he sees a high-pressure salesman. But if you come in wearing your Carhartts to make your suggestion, the owner thinks you’re Socrates. There’s a powerful advantage in coming in looking like a tradesman and not somebody from the home office.”
Sargent also believes that many contractors do not make enough use of a very influential prospective partner in the supply chain: the electrical distributor.
“Distributors are salesmen; contractors are bidders,” he said. “Most of the time, contractors are simply responding to an opportunity to bid and are not good at sales, nor should they necessarily try to be. Distributors have salespeople dedicated to owners and OEMs. The contractor should be spending a lot more time cultivating the relationship he has with a distributor so that he becomes the go-to guy for installation of the products the distributor sells.”
Typically, the customers/owners want to have the least complicated arrangements on a project and not have to be functioning as mission control as work progresses. Therefore, they are usually quite amenable to having the contractor and the distributor communicating directly and working together on a job.
“Rather than thinking of the distributor as somebody to come to for price and availability, the contractor should think of him as someone constantly seeking opportunities that require installation and who can help the contractor secure new business,” said Cory Szatkiewicz, national sales account manager at distributorship Turtle & Hughes Inc., Linden, N.J.
The contractor and distributor can work together to sell the concept of the project. They can offer to do the engineering, the layout, the product array required, demonstrate the bottom-line energy savings over the existing situation, and the estimated return on investment. In the case of green installations, the distributor and contractor can offer guidance on the rebate process in states where this is applicable.
“When contractor and distributor work together like this, we’re offering a total turnkey solution and the end-user customer likes this because he has less involvement in the process,” Szatkiewicz said.
Distributorship Turtle & Hughes conducts seminars geared not only to introduce the latest products but also to encourage contractors to constantly think proactively in terms of suggesting ancillary installations on-site when they see a potential application.
Again, slow times allow field people as well as management the opportunity to take a closer look at what else could be done right now at a given job site.
“Contractors are so used to the pressure of getting it done yesterday that they’re still not taking a good, hard look at the site and bringing back suggestions for add-ons like energy-efficient upgrades,” said Steve Bellwoar, president of distributorship Colonial Electric Supply Co., King of Prussia, Pa. “But those who do usually are successful. It’s not too difficult. Like suggesting a lightning surge arrester for a residential panelbox that costs $40. But crank that approach up at an industrial or commercial site, and there could be extensive wiring issues that need to be addressed.”
Bellwoar sees the independent distributor and the smaller contractor as kindred spirits with a great deal to gain by working closer together, especially now when new work is hard to find.
“The distributor can be a matchmaker,” he said. “Especially one with a diverse industrial/commercial/government clientele who can provide various types of leads to contractors, based on mutual understanding and confidence. Distributors are not interested in providing leads to bid-happy contractors who auction off their business.
“Contractors should look for distributors with the best reputation and try to develop a meaningful relationship with them. This can be forged between owners or between electricians and countermen and inside salespeople. The distributor can be the conduit to a lot of new business, but trust is key to partnering,” Bellwoar said.
QUINN reports on a broad range of business and industry issues for journals in the United States and Europe. He can be reached at 203.323.9850 and firstname.lastname@example.org.