Ecmweb 13706 Thinkstockphotos Med411093 Sale Tag Webversion
Ecmweb 13706 Thinkstockphotos Med411093 Sale Tag Webversion
Ecmweb 13706 Thinkstockphotos Med411093 Sale Tag Webversion
Ecmweb 13706 Thinkstockphotos Med411093 Sale Tag Webversion
Ecmweb 13706 Thinkstockphotos Med411093 Sale Tag Webversion

Chasing Growth vs. Nurturing Growth

May 9, 2017
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.

About the Author

Mark Lamendola

Mark is an expert in maintenance management, having racked up an impressive track record during his time working in the field. He also has extensive knowledge of, and practical expertise with, the National Electrical Code (NEC). Through his consulting business, he provides articles and training materials on electrical topics, specializing in making difficult subjects easy to understand and focusing on the practical aspects of electrical work.

Prior to starting his own business, Mark served as the Technical Editor on EC&M for six years, worked three years in nuclear maintenance, six years as a contract project engineer/project manager, three years as a systems engineer, and three years in plant maintenance management.

Mark earned an AAS degree from Rock Valley College, a BSEET from Columbia Pacific University, and an MBA from Lake Erie College. He’s also completed several related certifications over the years and even was formerly licensed as a Master Electrician. He is a Senior Member of the IEEE and past Chairman of the Kansas City Chapters of both the IEEE and the IEEE Computer Society. Mark also served as the program director for, a board member of, and webmaster of, the Midwest Chapter of the 7x24 Exchange. He has also held memberships with the following organizations: NETA, NFPA, International Association of Webmasters, and Institute of Certified Professional Managers.

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