That school down the road can provide more than an education for your town's children. For electrical contractors, schools offer a wealth of business-if you know how to work the system and how to get involved on the ground floor.
Several very good reasons now exist for electrical contractors to take a new interest in schools as potential customers for electrical products. For starters, there's more action in the school market these days because of a far-reaching demographic trend. Baby Boomers have produced offspring at a near-record pace, creating a surge in elementary school enrollment. To provide seats for these students, school districts in many areas of the U.S. are expanding older schools or building new schools in eye-popping numbers. Between 1999 and 2001, school districts will spend $46.4 billion on the new construction or renovation of schools, according to American School & University magazine.
While it's pretty clear that huge opportunities are ahead in new school construction, don't overlook the sales potential in the retrofit of existing schools. According to some government statistics, 75% of all public schools are at least 25 years old. Electrically speaking, this means a ton of potential sales in the upgrade of equipment, from load centers at the service entrance to the power wiring and various low-voltage systems throughout the entire building. The core distribution systems in schools require many of the same products used in the commercial or industrial facilities with which electrical distributors are more familiar. But the school market requires a slightly different package of products because of how schools operate and the electrical and electronic systems in these facilities must support.
The key products that electrical contractors can install in schools include:
Energy-efficient lighting systems;
Wireway, surface raceway and underfloor duct;
Upgraded grounding systems to protect computer equipment from interference from power wiring and other equipment;
Datacom and low-voltage wiring systems for computers, local-area networks (LANs), video, television, security, intercom, fire alarms, and telephones;
Surge suppressors and power conditioning equipment to protect electronic equipment; and
Vandal-proof lighting. The school market is seldom an area in which an electrical contractor develops a specialty because the day-to-day sales potential just isn't as high as with core residential, commercial or industrial work. But when a new school or a lighting or datacom upgrade for an old school is on the drawing board, electrical contractors should know what will be expected of them if they win the bid. Following are the key strategies that contractors should focus on.
Familiarize yourself with the bidding process. Because most major construction projects at public schools are financed by local or state funds, an open bidding process is used. Once the architect and engineering firm complete their plans and those plans are approved by the school district, general contractors bid the job. The general contractor that wins the bid then requests bid proposals from the various trades. If he or she believes the bids are realistic, the subcontracts are awarded; if not, the subcontractors bid again. The contractor that wins the bid for the electrical work then puts out the bid for materials to electrical distributors. Bob Fitzsimons, senior consultant at Information Transport Enterprises, New Canaan, Conn., a design and engineering firm that specializes in school construction, said the datacom work on a project is often treated as a separate bid. However, he said it's easier to coordinate a job if these bids are combined.
Performance clauses regarding maintenance of the power wiring or low-voltage wiring and other specific services are now often part of the contract, he said. "Maintenance of the system is very important, because it has to be working all the time," he said. "We have been adding it to the contractor's bid document, and the requirement is not to just pull in some cable and warrantee it for five years.
"What's being added are response time and performance criteria for fixing any downtime problem. This could be a 24-hour-emergency-service clause, a two-hour-response time for fixing a problem or a technical-support hotline."
These performance clauses are particularly important with datacom communication systems because of how much schools have come to rely on their computers, he said.
Treat a school system as you would any other key account. The school construction market may never represent a large portion of your business. But it's so close to the core customer groups for many contractors that it makes sense to service it just like you would other key accounts.
Tap into your community's grapevine for early news of a school project. Your network of local contacts in the community can also help you get an early lead on new school projects. The new construction or retrofit work at schools is often well publicized through town meetings and local newspapers' coverage of those meetings. Most of the time the community must vote to approve this work, so you will find out about an approved project far in advance of when the work starts.
"If contractors get in on the ground floor, they can not only help with the construction phase, but with the MRO," one manufacturer said. "For a contractor it should be a constant goldmine. A typical school room has a television monitor, fire and time systems, intercom, a computer for the teacher and more computers at work stations for the kids. And there are always renovations. For instance, with a wire management system in a school, the 'go-with' opportunities are tremendous. Not only are you installing a surface wiring system, but you have to have a proper grounding system and better separation between clean and dirty power."
Find out which manufacturers are calling on your market's buying influences. Lighting manufacturers, premises wiring companies and other manufacturers are focusing on the school market as one of the best sales opportunities in today's electrical industry. They often have field engineers calling on specifying engineers in your market to get their products specified. If you haven't met these field engineers, make it a point to do so.
Talk to the right people in the school district. For the big project work and retrofits, try to find out who calls the shots on equipment purchases.
The person with this purchasing power often reports to the superintendent and may be called the "business manager" or "energy manager," one lighting manufacturer said. "Don't just talk to the maintenance guy at the local high school who is working on a budget. You have to get to the business manager or the energy manager. Some schools are more sophisticated and have an engineer."
Find out which manufacturers' products are on the preferred vendor list and then contact the distributors that sell these products. If a school construction project is state-funded, a preferred or recommended vendor list may be set at the state level that the local school districts follow. In some product areas, notably lamps, getting on state contracts is a one-way ticket to low-margin business. However, the local municipalities or school districts often can still choose their own brands if they so desire, he said. "They may say, 'We want to bid locally. We don't want the state brand.' This gives the schools that option."
Distributors sometimes go for the lamp contract and service it at a relatively low margin, but they use that business as a door-opener to sell the schools other products, hopefully at higher margins, he said.
Sell the dollars-and-cents savings of energy-efficient lighting systems. Schools are particularly receptive to the concept of slashing operating costs by installing more efficient lighting systems. The more you know about these systems, the more effectively you can bid these jobs. Contractors often deal with the specifying engineers designing a school project or the school administrators that approve it. Lighting retrofits are one of the very top facility improvements in which schools invest. These retrofits include T-8 lighting systems, big-time dimming systems, vandal-resistant lighting, theater and sports lighting and energy-efficient exit signs.
Don't be surprised if you find yourselves competing with energy-service companies (ESCOs) on lighting bids. ESCOs bid jobs by offering a one-stop solution to the design, installation and supply of products for not only the electrical portion of the job, but the HVAC segment as well.
Think low-voltage. Computer learning is as big a part of the curriculum as reading, writing and arithmetic. This is great news for any electrical contractor considering a move into the low-voltage wiring market, or companies that already have established businesses in this area. Electrical contractors are pulling miles of spaghetti wire through the ceiling tiles to link computer labs to classrooms, and classrooms to the front office or Internet. And once a base of computer equipment is installed in a school, you can expect repeat business as the school reconfigures or updates or its computer network.
The surge of interest in teaching computer skills and computer-based learning has put the market for low-voltage wiring, connectors, wall jacks and all the related datacom equipment one of the top opportunities in the school.
Focus on selling surge suppressors and other power-protection products. Find out which manufacturers of surge suppressors and other power protection products are doing to get this equipment specified on school construction jobs in your market. Schools store data such as grades, test results and other student records on their computer networks, and they need the proper protection so they don't lose this valuable information. Engineers are specifying surge protection equipment and uninterruptible power systems (UPS) to protect this information. Many retrofit jobs now have surge suppression devices at the subpanel and at the equipment outlet, especially in older buildings.
If school enrollment is up in your market, you will be hearing more about new school construction and retrofit work. With the basic marketing strategies discussed in this article, you can be ready for these opportunities when they develop.