Ring In The New, Starting With Your Old Customers

I’d like to tell you that 2013 will be the year the economy comes roaring back, with prosperity for all and customers lining up to acquire our services without any effort on our part. I can’t do that (but don’t let that worry you too much).

When the challenge is to remain competitive, success-driven electrical contractors find a way. They keep abreast of developments in our industry—new market opportunities, changes in technologies and techniques, changes in the business environment, new codes and standards, changing regulations, etc. (No doubt, they faithfully read each issue of this magazine!) Maintaining an up-to-date core of industry knowledge is what enables us to re-evaluate our businesses effectively. It also allows us to take on new and different roles and business models when moved by necessity or by the desire to increase profitability and grow.

The majority of electrical contractors—95 percent—still perform traditional electrical/power distribution work that provides a big chunk of our revenue. But the chunk has been eroding steadily since 2004, when it accounted for 69 percent of annual revenue. The “2012 Profile of the Electrical Contractor” found that, on average, contractors derived only 39 percent of their revenue from providing traditional power and lighting services. The rest came from work involving power quality, communications systems, automation and controls, and green, sustainable building or alternative energy. It’s also worth noting that, compared to 2010, a significantly higher percentage of ECs reported having worked on fire/life safety (including installing alarms and detectors) across the residential and commercial/industrial/institutional (CII) sectors as integrated systems markets continue to expand.

As “Master of All Trades,” an article by Susan Bloom in the August 2012 Electrical Contractor, points out: “There’s no shortage of new roles that ECs can fill or additional services they can provide to strengthen their competitive advantage and add greater value within the retrofit and new construction markets. Industry experts have identified some roles that are reshaping the traditional contracting business—building information modeling (BIM) expert/modeler, energy management solutions (EMS) provider, master systems integrator (MSI), building energy modeling expert, commissioning agent, energy solutions provider or auditor, and energy service companies (ESCOs).”

In other words, there’s a lot of work out there, but it might not be the type of work you’re accustomed to. The next challenge is learning how to get started.

If you’re thinking of providing new services of the value-added variety, the logical starting point is with your existing customers. The 2012 Profile reported that electrical contractors got 42 percent of revenue from providing maintenance/service/repair on a combined basis. Not surprisingly, maintenance and repair work tends to increase when new construction slumps, but, even in good times, maintenance income is a staple to many contractors. You shouldn’t have much trouble persuading customers who are impressed with your installation services to sign onto a maintenance contract.

Providing lamp recycling on a regular basis, as recommended at www.lamprecycle.org, is another viable side business for many ECs. You might also consider providing ongoing metering and monitoring for customers who want to keep energy consumption under control, especially for those who have invested in any of your other energy management services. As I’ve previously mentioned, some contractors add value by offering consultation (and possibly even providing education for customers’ employees) on maintaining their facilities in an electrically safe work condition in accordance with NFPA 70E. The possibilities for new value-added services are as varied as your customer base!

Whether you’re considering providing new services to old customers or acquiring new ones, one rule remains constant: If you want to sell more and bid less, you must make customers and prospects fully aware of your company’s capabilities and promote long-term benefits rather than low contract price.

Of course, if you want to pursue new customers or expand your service repertoire substantially, you’ll have to think about many things you may never have considered before. For instance, should you hire your own salesperson or business development specialist? Should you act as the middleman in helping customers obtain financing for alternative/sustainable energy projects? Should you team up with a mechanical contractor to break into other energy management business?

There are many, many other questions that do not come with easy answers. However, education and strategic thinking can point you in the right direction. If you’re interested in growing your business, now is a great time to take the first step.

Good luck! And best wishes for a happy, healthy and prosperous 2013.

About the Author

Dennis F. Quebe

President, NECA

Dennis Quebe is a former president of the National Electrical Contractors Association (NECA) and contributed the President's Desk column monthly. He took office in January 2012 and served a three-year term.

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