I recently heard about an interesting form of customer feedback. At the famed Grand Palais theatre during the annual Cannes Film Festival in France, French film fans voice their opinion on a really bad movie by “thumping.”
If they don't like a movie, film-goers get up and slam their lush seat cushions against their seat backs so they “thump” loudly as they leave the theater. Directors at Cannes hate to hear thumping; it means people despised their movie. Talk about an embarrassing and immediate response to your work!
During the past year, investors have “thumped” the stocks of the contractor consolidators in the electrical market: Integrated Electrical Services Inc., Encompass Services Corp., Quanta Services Inc., all of Houston, and Bracknell Corp., Minneapolis. These companies acquired dozens of electrical contractors, as well as contractors in the building maintenance and utility markets to offer a one-stop, national solution for electrical work and other building services. To run these companies more efficiently, they planned to consolidate back-office operations such as MIS and purchasing. The purchasing potential of these contracting giants had electrical distributors drooling.
These efforts have not gotten as far as the consolidators would have liked, and these companies have had to endure a pretty solid thumping from analysts and investors. These four companies are trading at or near all-time lows, and Bracknell stopped trading shares on the Toronto Stock Exchange altogether last November.
Not all of the industry's consolidators are feeling the same pain on Wall Street. The electrical contracting industry's first consolidator, EMCOR Group Inc., Norwalk, Conn., whose electrical interests were built in large part by its predecessor company JWP Inc., was trading at over $60 a share at press-time, not far from its 52-week high.
In this month's issue, you will find CEE News' annual listing of the 50 largest contractors, an editorial effort aimed at tracking the growth of the largest contractors in the electrical industry. One of the reasons we started doing this listing three years ago was to provide the electrical industry's first listing of the largest electrical contracting firms. Engineering-News Record magazine has done a fine job for years of providing a breakout on the largest electrical contractors from its Specialty Contractors listing, but that listing won't be available until October. You can get the same information in CEE News much sooner — along with capsule summaries of the largest electrical contractors.
“Big” doesn't automatically mean “best,” and hundreds of examples exist of thriving electrical contractors much smaller than those featured on pages 20-21. But it's always interesting to hear about the largest companies in any industry, and to learn about the strategies they use to increase their profits and sales.
Customers provide their best feedback with cash. They vote with their dollars, and contractors — big or small — who lose too many of these elections get thumped out of business.