Get Up And Go

The energy services market is constantly changing. Every day, a new product comes on the market that is better and more efficient than yesterday’s. However, technological change and innovation is only part of the ongoing evolution that electrical contractors (ECs) are experiencing in the energy services market. This market is equally affected by social, economic and political change, which is more fickle and unpredictable than evolving products and technological advances. For example, government incentives and regulations intended to promote investment in energy efficiency and sustainability may be in place one day and gone the next, taking the EC’s market and market investment with it.

Uncertainty is inherent in the energy services market, and that uncertainty could drive ECs to abandon the prospect and refocus on traditional markets that are more predictable and stable. However, the volatility associated with the energy services market presents a great deal of opportunity for the EC that is agile and able to quickly respond to a changing landscape. The key to success in the energy services market is business development.

Business development required

It would be nice if new energy-saving and green products and technologies sold themselves. If they did, the EC would only need to wait for the phone to ring to start a new project. However, ECs need to get out there and sell because energy is typically not the customer’s business, and the customer probably does not know that recurring energy expenses can be reduced. As a result, customers often don’t realize that investment in energy conservation and efficiency is low-risk and often nets a more certain and higher return on investment (ROI) than a comparable investment in other parts of their business. Second, the customer does not know what products are available or have the technical expertise to understand why one technology is superior to another for a specific application. Third, the customer typically doesn’t understand that a new technology may not only be more energy-efficient than the customer’s existing system, but also may provide better quality. Take a retail store, for example. A new lighting system may improve merchandise display, increase visual comfort that boosts customer shopping time and sales, and reduce merchandise returns.

Energy and energy services is the EC’s business. Business development is about understanding the customer’s energy and sustainability needs and educating the customer about how these needs can be met through application of energy-saving products and technologies in its business. Therefore, the EC must know the products and technologies that are commercially available and understand the customer’s business to recommend the best product or technology. With energy services, these needs go beyond technological and include budget considerations, ability to take advantage of government and utility financial incentives, method of financing the project (which includes leasing as well as outright ownership), and capability to operate and maintain the system once it is installed. 

Business development is more than just offering traditional procurement and installation services to the customer for energy services projects. Business development is about finding out what the customer needs to proceed with the energy services project and addressing those needs through a unique, holistic project plan.

Business development 
is an opportunity

Having customers call with energy services projects already designed and ready for the EC to procure the necessary materials and start the project sounds a lot easier than the business development process described above. However, in this latter scenario, there is no easy way for the EC to differentiate itself from its competitors except on price, which leads to the customers viewing the EC’s services as a commodity. As a result, the EC loses the ability to use its knowledge and expertise to add value to its traditional project management services and provide the customer with the project it needs.

The EC should view business development as a business opportunity in the energy services market. Proper business development strategies will position the contractor as the expert in the customer’s eyes and as a partner in the project delivery process. The return on the time and effort invested by the EC in business development activities is more negotiated work with customers seeking its expertise and increased involvement in customers’ day-to-day operations, resulting in more project and service work opportunities. Business development in the rapidly changing energy services market will result in competitive advantage for the electrical contractor and increased market share.

About the Author

Thomas E. Glavinich

Freelance Writer
Thomas E. Glavinich was an associate professor in the Department of Civil, Environmental and Architectural Engineering at the University of Kansas. His tenure as one of Electrical Contractor's most trusted and reliable source of industry research end...

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