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Dealing with developers and building owners, to quote one electrical contractor, has never been a day at the beach. And if they were demanding to begin with, their requirements can be exasperating and exacting in the current economic environment. So electrical contractors have to be more innovative and imaginative than ever in getting their foot in the door and then being invited back for follow-up business, whether it is future projects or maintenance of a current one. The logical question to ask is how do you start?
It’s personal … then it’s business
“If this is the first approach to a developer or building owner, the initial contact should be at the highest level,” said Dan Fitzgibbons, president of Gibson Electric & Technology Solutions, Downers Grove, Ill. “The contractor CEO should call the president, or perhaps the top marketing executive, at the developer or owner firm and ask for a meeting. And the contractor should come with professional literature including a capabilities brochure, a documented list of similar projects successfully completed, and perhaps even personal profiles of outstanding members of the firm’s team. One of the major points we make has to do with our commitment of continuity: our project managers and their people start the job and stay until they finish it.”
In Fitzgibbons’ opinion, visual recognition is critical. The developer or owner has to have a face to go with the name when the contractor calls to ask about an upcoming project. And, to borrow a proverb from the carpenter’s trade, you never know which tooth of the buzz saw makes the final cut. Opportunities can come in the middle of the night from unexpected sources and, with the right personal touch, can result in profitable connections.
“A factory owner called our offices late one night from his home with an emergency,” said John McDaniel of Dollar Electric Inc., in Lake Charles, La. “A ceiling fan had shorted out and he felt it was a fire hazard. I sent an electrician to fix it and he left our card. The owner called me the next day and asked me to come by his factory because he needed some work done. Turned out, he needed four electricians for 40 hours a week for renovation, and the job lasted for four years. And all that came out of establishing a personal relationship by going out at night to fix one ceiling fan.”
The next step in establishing a relationship is a little more complex because it has to do with getting inside the client’s head and becoming part of his team.
“The first thing you have to do is figure out what the developer’s or owner’s objective is,” said Pat McMillan, president of McMillan Electric in San Francisco. “Do they intend to be in for the long- or short-term? Some developers want to turn the building over in a couple of years, while others intend to maintain it and keep it as an investment. And there are owners who decide to upgrade an existing property’s infrastructure by enhancing and updating various systems and then sell it. You have to understand the individual client’s needs and then align your services with his motivation, objective and timetable.”
One of the most important strategies to employ in the early stages of establishing a relationship is for the electrical contractor to determine how he can most effectively interact with other members of the builder’s team—most importantly, the architects and the engineers. This requires considerable diplomatic savvy, especially if the contractor is just working for the first time with the developer.
“If you’re dealing for the first time with an owner developing a new property, one way to get in his good graces is to offer him services that complement those of his existing engineering and architectural team,” said Philip Altheim, senior vice president for building development at Five Star Electric Corp., Ozone Park, N.Y. “If you can add value to what they’re designing by offering practical suggestions that save costs, then you’ve got the developer’s attention.”
On ensuing jobs, Altheim said, the developer will automatically think of you as having enabled him to get the kind of pricing he was hoping for. In turn, he will suggest that his architects and engineers contact you, and this gives you a distinct competitive edge.
However, there will be cases in which the electrical contractor has to take the risk of respectfully disagreeing with specifications he feels would contribute to unnecessary cost overruns.
“On a half-million-dollar job, there may be a certain amount of ‘gold-plating’ by the engineer, like very expensive fixtures, or there may be redundant wiring,” said Sal Anelli, president of Inner City Electrical Contractors Inc., Brooklyn, N.Y. “If you know this business, you can look at most jobs and see there’s a lot of money that you can save the developer. So you have to present yourself confidently and as a professional who knows from experience what can be done.
“Most developers like innovation and re-engineering, especially when it saves them money, and this is even more so the case these days. Of course, you run the risk of giving them ideas and then they give the job to someone else. But an honorable developer will bring you back to the table for a last look.”
And getting the electrical work installed on time is a crucial cost factor, Anelli said. If a job is slated to be done in three months and it goes into another month, the owner stands to lose a lot in terms of rental income, so staying with the schedule is critical for being included in future project bidding.
And the more established the contractor’s track record is in engineering, the more likely he is to get the developer’s ear.
“A lot of our work is design/build,” said Skeeter Holt, president of Apollo Electric Inc., Brea, Calif. “So, in addition to installation, we offer engineering capabilities at what I consider to be a reduced rate. A number of electrical engineers tend to over-design a job and make it more expensive than it needs to be, but we look at that same project differently. The cost savings we can offer is an important added value. But of course, to maintain a relationship based on this ability, it’s mandatory that you perform as promised and honor your commitments.”
The consensus is that in these tight economic times, this kind of “value-engineering” has become more and more of a factor in dealing with builders. To form and retain a connection with developers and owners today, the electrical contractor has to have a reputation for knowing how to keep the integrity of the design while keeping the costs down.
And many contractors agree that with the market slow and the public consciousness of all things green continuing at a high level, developers and owners are open to virtually any proposal that will save them both energy and money. And, as one shrewdly observes, the prospect of ongoing cost savings lessens the chance of owners or developers haggling over installation pricing.
Energy-saving lamps and ballasts, time and motion clocks, and photovoltaic solar options all offer builders and owners proven opportunities for them to increase their return on investment.
But the contractor has to be completely knowledgeable about these products and technologies and deliver on his cost-related promises. Because the issue is not just making a sale, but rather providing an alternative solution that serves as an ongoing economic reminder for the customer to want to do business with the contractor again.
Service and maintenance
Once the building is completed, service and maintenance contracts are the obvious—and lucrative—next considerations.
“In the case of design/build high-rises and some other structures, it’s to the owner’s advantage to keep the contractor in the loop so he can call for one-stop maintenance,” Fitzgibbons said. “So by the time the tenants start to move in, make sure you’re on the recommended list for maintenance work. And to make yourself even more valuable, learn what kind of tenants are coming in and what their particular needs may be.”
Service translates into instant availability, and this has to be part of any maintenance agreement today.
“We set up a 24-hour hotline with our building owner clients,” Altheim said. “Owners have major stress at different times of the day and of the year, so when they know your people will respond, that becomes your most important bond with them. If a 4,000-amp switch blows out on Christmas Eve and they need the system back on in frigid weather, and they also know they can depend on you, then you’ve just defined what ‘service’ means.”
Knowing when to walk away
Electrical contractors bear a unique responsibility on any project, because the products and materials they install are inherently more hazardous than anything being put in place by any other tradesmen.
Essential to their work is thorough knowledge of the local codes and any changes or revisions in them so that they can advise the developer or owner accordingly.
And this commitment can’t be diluted in today’s cost-cutting environment.
“You can’t compromise on electrical work to come up with the right price,” Altheim said. “The consequences are too enormous for you and the developer or owner. You have to do the right job, so in this tight-budget, cost-cutting period, there will definitely be times when you have to walk away.”
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 [email protected].