Electrical Testing
Chasing Growth vs. Nurturing Growth

Chasing Growth vs. Nurturing Growth

A track record of professionalism and competence will help grow a business more effectively than aggressive discounting.

You probably agree that, in general, businesses do better when they are growing. If so, you’ve probably been trying to grow your business.

The typical strategy is based on chasing growth. Tactics include:

Aggressive bidding. By underbidding the other guy, you win the contract and thus add more revenue to your books.

Discount pricing sales. For example, get 20 percent off any electrical project. This month only!

Service bundling. For example, engage our thermography services and get 25 percent off insulation resistance testing.

Photo credit: Medioimages/Photodisc/Thinkstock

Did you notice the common factor here? Working for less money! Yes, these tactics may work to grow your business. But chasing growth by working for less means what you’re offering is cheapness. You aren’t going to grow net unit profits this way.

Overuse of underpricing tactics weakens your business. One unforeseen incident of any size, and you’re toast. This scenario plays out again and again in the electrical industry. It’s the main reason that small electrical shops fail rather than grow.

Discounting tools can aid growth. But you must use them with great skill. Maybe you’ve seen one of those YouTube videos of the guys with nunchucks whacking themselves in the head and falling over unconscious? That’s pretty much how discounting tools work for most small shops.

You might bid aggressively on a particular job because of unusual circumstances; for example, it’s potentially a big client, and you just want to “get inside.” But you can’t bid aggressively as a regular practice and expect to stay in business long-term. The same dynamic applies to other discount tools. Use them judiciously.

What works much better than chasing growth is to nurture it. Instead of positioning yourself as Bargain Bob, you position yourself as the contractor of choice. A key element here is to think about what customers really want.

Although there may be some price pressure for a plant engineer, his main concern isn’t the price of the work. He will try hard to get his company to pay more for the right work. How does the plant engineer define that?

Expertise. In many cases, a plant engineer doesn’t understand all of the technical aspects of the particular job. A firm that shows expertise has a huge edge in winning the bid. Rather than price aggressively, be assertive about showing your expertise.

Professionalism. How do you communicate professionalism? Start by looking at the shoes your people wear: scuffed or shiny? Clean clothes, clean tools, clean service vans, clean language; all of these are part of a professional image.

Equipment. Tools, test equipment, portable lights, safety gear, and other kinds of equipment project an image. The right equipment projects an image of expertise.

Communication. A busy plant engineer doesn’t want to play phone tag. Follow up with in-person visits, and be prepared to stand around waiting, if this customer’s continued business is important.

Reliability. Always do what you promise to do. If you say you’ll call back at 1 o’clock, what happens if you get tied up and miss that by 15 minutes? This makes you look unreliable. To avoid conflicts, add a qualifier. For example, “I’ll call you back between 1 and 1:30.” Or “Our people will be there shortly after seven tomorrow morning” rather than an exact time.

Integrity. A plant engineer wants to hire contractors he can trust. Even if you have to choose between your integrity and your profit on a given job, choose integrity every time. Own up to mistakes; never cover them up.

Thoroughness. Use checklists and procedures to ensure a job is performed completely and thoroughly.

Safety. Don’t keep employees who don’t have a safety mindset. You can’t afford to send them on jobs if growth is your goal.

If you give customers what they really want, your business will grow. The list above covers the basics. Get these right, then focus on the specific needs of specific customers. You’ll get referrals and repeat business instead of rework.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish