Author: Brett Knox
April 4, 2024 - 5 MIN. READ
Most commercial electrical contractors face fierce competition. A great way to differentiate your company and reduce competition is to specialize in market segments. Yes, it may require specialized training, but the financial rewards can be significant.
1. Specialize in Market Segments or Niches
Commercial electrical contractors have many market niches to choose from because electricity is the “fuel” for the majority of new technologies. Your options include:
- Automation and control systems. These tech-inclined contractors deal with the increasing demand for building automation. Installation and maintenance of control systems is definitely growing in demand.
- Energy efficiency. With society’s increasing emphasis on sustainability, this is another strong growth area. Partnering opportunities with HVAC contractors should be pursued as reducing energy consumption gains momentum.
- Electrical safety compliance. This could be a good choice for a contractor with a head for regulations such as NFPA 70E for safety in the workplace.
- Emergency and backup power. As the weather becomes wilder and power more unpredictable, there are many companies for which devices like uninterruptable power supplies and generators are a lifeline. This field offers a lot of opportunities.
- Maintenance and repairs. NFPA 70B and NFPA 70E both offer opportunities for electrical maintenance opportunities that often lead to upsell opportunities for additional revenue. Consider installing generators because they require annual maintenance, which provides additional face time with customers.
- Bi-directional charging and Solar-to-battery integration. This is a nascent opportunity that will be steadily growing in the years ahead and people start understanding how battery storage can not only service as backup power but a cost-effective way to reduce electricity bills in time-of-use (TOU) market areas.
- Hazardous environments. These contractors may work at oil refineries and other sites, requiring a deep understanding of the hazards posed when dealing with electrical systems.
- Specialty services. These are rendered to various industries, such as hospitals, pharmaceutical plants, and even cannabis facilities. Learn about the cannabis industry and the unique opportunities for HVAC companies that electrical contractors can take part in.
- Technology integration. This is where a lot of excitement lies. As a contractor, you would help a facility adopt technologies that operate off the Internet of Things (IoT) and integrate them into new or existing building automations systems.
Finding the right fit will require you to do considerable market research but a number of these specialty segments provide very profitable work.
2. Join a Purchasing Program
Whatever market segments you pursue, win more jobs and increase your profits by paying less for electrical equipment, materials, and supplies.
How? Join a purchasing program like Raiven. Companies like Raiven combine the buying power of all their members and negotiate deep discounts, service terms, and supply chain priorities so you pay less on automation controls, EV charging stations, lighting, wire, panels, conduit, and more. Since Raiven does all the supplier negotiations, you don’t have to spend time negotiating with suppliers.
Gain access to pre-negotiated discounts of 7%-30% from industry-leading manufacturers and distributors like ABB, alpscontrols, ChargePoint, Ferguson, Grainger, Graybar, Home Depot, HD Supply, Lowe’s, Schneider Electric, Sunbelt Rentals, United Rentals, and more. This extensive network of suppliers can help you reduce out-of-stock situations and save money.
Raiven is dedicated to serving electrical contractors, offering special pricing agreements on electrical equipment, parts, and maintenance supplies, along with a streamlined purchasing platform for swift and efficient purchasing. Other key benefits:
- Stay informed with supply chain alerts that notify you of price fluctuations and changes in product availability for the supplies that matter most to your operations.
- Simplify your purchasing process by accessing all your preferred suppliers in one private marketplace, providing you with easy access to your negotiated discounts. Say goodbye to the hassle of navigating multiple websites to compare prices.
- Utilize AI-powered purchasing tools, which automatically locate the lowest prices, ensuring cost savings even when your employees shop outside of your preferred supplier network.
3. Build a Strong Reputation and Marketing Portfolio
You must build a strong reputation and marketing portfolio to establish yourself as a highly sought after commercial electrical contractor. Specializing in market niches helps you deliver both.
Your marketing portfolio should make clear the types of services you offer. It should feature past projects that illustrate the quality of your work. Relevant project pictures and enthusiastic client testimonials will clarify your qualifications.
You will also want to highlight your certifications and safety record. Compliance and safety are critical in the electrical industry. A strong safety record can be a competitive advantage. No commercial client wants production interrupted or the liability for accidents on their job site.
You and your employees can take training in regulatory compliance. To secure jobs, you will need to make sure your training and certifications stay current. These are vital for your bids, especially if you are working in a highly regulated industry or in a hazardous environment.
Networking and Relationship Building
The availability of commercial opportunities is often shared by word of mouth. That makes face-to-face networking indispensable to your success.
Enhance your credibility by becoming a member of an electrical contractors organization. The National Electrical Contractors Association, NECA, is one possibility.
To become known to potential clients, attend industry events. These include conferences, trade shows, and seminars specific to the market segments you are focusing on. These are also good venues to meet general contractors.
Trade shows invite interaction with end customers as well as professionals in the trades, such as facility managers, architects, and engineers.
These sessions are a great place to make connections. Put on your sales hat, strike up conversations, and exchange business cards with those who may be able to refer you to their existing clients. Follow up with calls or other communication even if your colleagues don’t have meaningful opportunities for you just yet.
Join a professional organization to extend your reach even further. You may even find groups that are specific to the niche or niches you’re most interested in specializing in. Whenever possible, attend the organization’s meetings and events.
Finally, be sure to leverage social media platforms. LinkedIn is excellent for professional purposes. Using X (formerly Twitter) also works. Whichever platform you choose, set aside time every day to post or interact. Simply posting a profile won’t likely to generate results.
4. Leverage Technology and Innovation
New Products
Automation and Control Systems, Electrification solutions, and Technology Integration are all expanding in functionality. Using innovative tech ensures your business will be cutting-edge, efficient, and cost-effective. You'll want to keep up with industry trends, especially with these three technologies. As the usage of the IoT and AI grows, so does the variety of equipment that uses or requires it.
Internal Operations
As your business grows, you will cope with increased demand. To map out a plan, you'll need to make sure you'll be able to sustain and repeat your internal operations. If not, they won’t efficiently scale up. Your three most important things to consider are:
- Create a solid strategy.
- Work with the right people.
- Use the right scalable technology.
AI technologies will change the way electricians operate. AI-based software will improve troubleshooting, automate load calcs, detect faulty wiring, and more. Augmented reality will increase the effectiveness of training for you and your employees. Online learning platforms allow you and your employees to stay up-to-date anywhere and anytime that fits into the work schedule.
Financial management software designed for a small shop may not adequately serve the needs of a larger one. Ensure that your digital tools can handle business growth. You will also want them to integrate with your field service management software system.
Whichever market segments you specialize in, you want to leverage software and technology to drive efficiencies and higher profits. These are wise investments over the long-term.
5. Focus on Marketing and Branding
Effective copy and other tools tailored to your audience are essential for selling your services. Whichever market segments you pursue, you need to showcase your expertise and experience. A strong web presence with targeted SEO is essential to gaining business from potential clients online.
In the scant seconds it may be viewed, your website must communicate your professionalism, reputation, and capabilities. There are plenty of website builders that can help you design a professional-looking site, but you may also wish to hire a professional to create and update what may be your most important marketing tool.
You may also be considering social media marketing, content marketing, and pay-per-click advertising. These methods are more consumer-oriented and may not reach or convince the commercial clients you seek. Again, your success will depend on your niche and finding the right messages to appeal to it.
About Raiven
Raiven is the leading group purchasing program and procurement software platform for contractors and enterprises, enabling them to digitally transform their procurement process and obtain significant discounts on equipment, materials, and business essentials. Raiven's cloud-based procurement platform helps businesses purchase smarter and more efficiently through patent-pending AI algorithms that find in-stock products at the lowest prices. Learn more at Raiven.com and on LinkedIn.
