The revenue of an electrical contracting business can be boosted via an action plan and excellent customer relations. Brian Seymour explains.

After a couple of decades of training and mentoring new electrical contractors, I’m still astounded by a certain aspect of these aspiring people.

Many of our smartest and brightest electricians have no concept of marketing their wares. They don’t understand the need to develop an action plan and practise the art of ‘up-selling’.

Experts tell us that the probability of selling to an existing customer is 60-70%, whereas to a new prospect it is just 5-20%.

In recent training courses I asked participants to explain why they would want to start their own business.

Did they want to make lots of money, be able to spend more time with the family or be their own boss?

If trainees gave any of these reasons I told them: better think again, as nothing is achieved without putting in time and effort.

It is a senseless to think that rivals win profitable jobs due to good fortune. In most instances this is the result of having a good action plan. A business needs a prioritised plan designed to achieve its stated mission and goals.

An action plan determines what you want to achieve and the strategy for doing so.

The strategy will include timeframe, roles and responsibilities, performance indicators and alternative ways of reaching the objectives and establishing best practice.

It is also a good idea to perform a ‘mini audit’ on the business to identify its strengths and weaknesses.

The steps for achieving business goals are set out below.

Research objective

What do you want to know about your customers or your market?

For example, you may need to decide whether to launch a new product or service. Your research process would be to assess whether the market would accept your innovation and how much customers would be willing to pay for it.

Once you have established an objective, develop a list of research questions relating to your customers and competitors. Here are some examples:

• What are the key demographics of your market (residential, commercial, industrial, etc.)?
• How will your entry affect the market?
• Does your region have a stable economy?
• Where are customers located?
• What’s the profile of an ideal customer?
• What’s the profile of a typical competitor?
• What are your competitors’ main strengths?
• What are your competitors’ main weaknesses?

Conclusions and decisions

Examine the major trends or problems in the industry, analyse strengths, weaknesses, opportunities and threats, then use your research to make decisions about your marketing mix.

Location

Although location is important for a retail outlet or manufacturer, is not really a consideration for an itinerant industry.

Businesses such as electrical contracting, which involves going out to the customer, don’t even put their address in advertisements, as customers may be concerned about travel costs.

Increased opportunities

One of the best ways of boosting revenue is to sell more to existing customers,

and there are many such opportunities for the small electrical contractor.

New contractors should be reading industry magazines and following up on new services. They can sell these services to existing customers in the same way as fast food outlets ask whether people want other products with the initial order. It really is a case of “Do you want fries with that?”

When electrical contractors call at a residence to install a power outlet in the kitchen, they should look for other opportunities. Rather than just installing the power outlet and leaving, they should advise the customer regarding an upgraded electrical installation or a reduction of fire hazards.

Potential areas of improvement include:

• additional lighting in poorly lit areas;
• task lighting above kitchen benches and make-up tabletops;
• motion detectors to control external security lighting;
• double power outlets to reduce the number of double adaptors and trailing leads;
• remote lighting controls;
• re-lamping with LEDs;
• replacement appliances; and
• C-Bus installation, home automation and lighting control.

Commercial or small industrial customers should be enlightened about services that would make their business more streamlined or safer with information on:

• switchboard maintenance;
• thermographic testing;
• automatic security lighting;
• security systems;
• power-saving devices;
• emergency and exit lighting;
• testing and tagging;
• power-operated doors; and
• data cabling.

Many customers don’t know what is available until the contractor puts the questions.

Let’s look at a few opportunities for additional sales that were gleaned from recent industry publications.

There is growing uptake of heat recovery variable refrigerant flow (VRF) air-conditioning, which offers long-term savings. This is suitable for installation in existing and new commercial and high-rise residential projects (team up with an air-conditioning contractor).

There are opportunities for dealing with harmonics in commercial installations stemming from computers, electronic ballasts, etc. Due to the high proportion of single-phase circuits feeding all the loads in shopping malls, hospitals and commercial buildings the neutral is carrying enormous current..

Australian Standard AS1731 has shown up a lot of non-complying refrigeration equipment in commercial installations that will have to be brought up to scratch.

Retrofitting offers a huge amount of work. There are still thousands of installations with plain (split) conduit encasing VIR cables. Over the years the fittings work loose, the conduit parts company and then drops onto the wire. The insulation disintegrates, resulting in live conduits and the potential for fire.

Since alterations to the Building Code (2011), which allows only 5W per square metre of lighting in residential properties, thousands of properties are in need of an upgrade.

Advertising

Request reviews from your customers, because word-of-mouth is one of the best ways of advertising your services.

This kind of recommendation carries far more weight than any commercial advertisement.

For small contractors working in their own district, letter box drops are an inexpensive method of advertising services. They are an extremely cost-effective marketing tool for 1,000 or 10,000 homes.

Flyers can be distributed by family members, a commercial printer or Australia Post.

Many electrical contractors complete their contract with a builder or developer then have no further contact with the site after the warranty period.

Customer relations

However, try introducing yourself to the building owner and offering advice for add-on services and facilities that may not have been considered in the initial plans.

Companies that take customer service seriously have a consolidated contact management system which the gurus of the marketing industry call the 3Cs (cost efficiency, compliance, and customer satisfaction). Microsoft Exchange is often used for customer relationship management.

If you want to attract quality customers, you need to look like a well-organised, productive business. Don’t drive around your neighbourhood in a van with dents and scrapes all over it. Keep the vehicle clean and repair dents and scrapes immediately.

Also, keep your own appearance neat and clean. Carry a change of professional-looking clothing in the vehicle for when you have a dirty job earlier in the day. Always carry business cards and hand them out whenever you get the chance.

Above all, good customer service is doing what you say you will do. If you are running late to the job or appointment, call the customer and let them know.