We all have blind spots when it comes to running our businesses. Those spots might be big or small. It might sting a little to hear about them.
And it’s easy enough to dismiss them.
“This is just how we do business,” you might tell yourself. “And we’re doing all right.”
But are you really? And honestly, did you get into the energy-efficient lighting retrofit business to just “do all right”?
StreamLinx Chief Operating Officer and Co-Founder Jeff Seifert and I recently collaborated to create a webinar, 12 Retrofit Blind Spots That Cost You Profitability. It’s a bit of an exercise in tough love, tackling a topic like this. But if you want to close more retrofit deals, it’s important to talk these things through.
The fact is, if your company hopes to compete in the retrofit marketplace, you (or your company stakeholders) need to embrace new technologies for what they are, tools and opportunities, in order to gain greater efficiencies and provide better services.
That requires a change in how your shop views technology – shifting from a belief that tools like SnapCount are nice-to-haves to understanding what they really are: must-haves.
Here’s a glance at 12 of the most common blind spots that prevent retrofit companies from selling more and making more.
1. “Data Errors Don’t Impact Me Much.”
This couldn’t be more misguided. One small data transcription error from a paper audit form to a quote spreadsheet could easily snowball into a huge mess. Simply misreading someone’s handwriting can set off a domino effect of multiple errors, possibly culminating in a late job completion that delays payment of the final-phase billing.
That could be catastrophic in and of itself. But when you add the hit your reputation takes with your customer, what started with one small mistake could cost you a lot more in lost referrals and repeat business.
2. “We Focus on Territories Where the Energy Rebates Are Most Generous.”
Utility rebates do a lot of good and can help convince business decision makers to replace their lighting units. But they should not be the foundation of your retrofit business. After all, you’re not selling rebates, you’re selling value.
Compare the value of a project to the value of a corresponding rebate. If you’re honest with the numbers, you’ll realize that the rebate represents a very small percentage of the overall value of the project.
Don’t ignore rebates. But if you pick territories based only on the availability of rebates, you’re on a fool’s errand.
3. “I’m Tapped Out. If I Sold More Retrofit Business, I Couldn’t Handle It.”
First of all, a company should never be afraid to embrace growth. Most difficulties in bandwidth come down to how well you optimize the dimensions of demand, such as sales, supply, technology, project size and your ability to employ non-competitive partners when your own resources run thin.
Process improvement and digitization alone can boost your productivity to the equivalent of one or more full-time employees. If you think creatively – and use the right tools – you’ll find ways, including the use of non-W2, non-payroll resources, to grow and meet demand.
4. “Our Existing One-Page Retrofit Proposal Is Just Fine.”
Those of you who are familiar with my work probably know my thoughts on one-page proposals. Most of the retrofit proposals I see focus far too much on the what, how, how-much and when of a project. But think about this: proposals need to be persuasive. Persuasion is rooted in emotional interest. People truly care about the why of a project.
Does your prospect want their people to be more productive? Do they want to improve safety in their facility? Could repurposing money previously wasted on unnecessarily high lighting-related energy and maintenance be the path to these and other important benefits?
If you can persuade your prospect to see the “why” behind the lighting retrofit project, you’re on the right track. Get to the why of a project, and you’ll get people emotionally invested.
5. “Bare Bones, Free or Homegrown Retrofit Audit Software Does Most of What I Need.”
While it’s tempting to try one’s hand at building a home-grown solution, the true requirements of a usable, accurate and reliable platform are often not discovered until you’ve run out of time, patience and money. Worse yet, fate helps us discover the deficiencies at the worst possible moment (say, in the middle of a large audit).
Whether it’s home-grown or an under-developed commercial option, what’s typical is a “semi-automated” end product that leaves many manual steps for the user to complete.
6. “Our Existing Worksheet Is Fine.”
The program you use to generate your one-page financial analysis should let you change percentages of inflation, discount rates, projected costs and savings. In other words, it should facilitate the kind of sensitivity analysis that gives decision-makers the confidence to proceed.
Key financial metrics should be incorporated into the analysis for a wide variety of holding periods. An ideal holding period would be annually. For the long-lived retrofits, a financial analysis through year 10 or even year 20 is recommended.
Sample key financial metrics include:
- Simple Payback Period (SPP)
- Return on Investment (ROI)
- Internal Rate of Return (IRR)
- Net Present Value (NPV)
- Modified Internal Rate of Return (MIRR)
- Savings-to-Investment Ratio (SIR)
The one-page proposal plus the one-page financial analysis make it very easy for decision-makers and influencers to get their arms around a proposed project’s economics and benefits.
7. “It’s More Important to Win the Retrofit Project Than Worry About Implementing It.”
There’s an old saying, “Don’t confuse selling with installation.” Some contractors used to adopt the position that they don’t sweat the details of a project until they’ve won it. Today, that’s simply not feasible. It’s imperative that the project is poised for success from the very beginning.
The right technology helps you write proposals that create true wins, leaving so few details to chance that everything that can go right does go right.
8. “We Have Good Relationships That Keep the Phones Ringing and Keep Us Busy.”
There’s a difference between being reactive and proactive. And if you’re primarily reactive to what your callers need, you need to change your ways. Proactive steps might include identifying some non-competitive vendors to collaborate with and swap leads. Or, seeking out new prospects by asking existing customers about their divisions, affiliates and supply-chain partners.
If your pipeline is flowing and the business is coming in, don’t be afraid to grow. Consider how you can improve your customer experience and reduce your sales cycle by relying on a sales enablement plan and quality marketing in alignment with your sales goals. There is always room for improvement.
9. “My Retrofit Business Back Office Is a Fixed Cost.”
When considering automation, some executives question an investment if it doesn’t directly reduce payroll or other fixed costs. Implementing software that increases the productivity and output of existing operational staff is always a value-add. Reducing a given task to one hour that used to take two frees up the employee to do other tasks that move the business forward, whether it’s training in business development or tackling those wish-list projects you keep putting off due to a lack of time.
10. “We Sell the Smallest, Brightest, Least-Costly Items.”
Pitching your retrofit business as the best of the low-end service providers puts too much emphasis on a project’s cost and not enough on the overarching value of your services.
It’s far better to help your prospect envision things they care about, like the dairy farmer who learns that milk production goes up in cows that are illuminated by LED light. Or, lower scrap rates when more efficient luminaires result in a higher foot-candle level that allows people to work better with fewer errors.
11. “Retrofit Software Is Expensive.”
Groundbreaking technologies always appear expensive when viewed outside the context of the value they deliver. For example, not so long ago, retrofitters saw prospects experiencing sticker shock: New LED lighting systems were relatively expensive when compared to their fluorescent alternatives. Those same prospects changed their tune, however, once the retrofit contractor illustrated the kind of utility-cost, non-utility-cost financial and non-financial benefits that LED solutions could deliver.
12. “Some Retrofit Prospects Have No Sense of Urgency.”
Let’s just say that some salespeople have a habit of blaming their prospects. As Tony Robbins says, “If a person doesn’t get it, you probably didn’t give it.” You have the responsibility for communicating with your prospect. If they aren’t motivated to move forward, chances are you haven’t given them the motivation.
Your Next Step
So, there you have them... 12 retrofit blind spots that will cost you profitability. The good news is you can turn them into targets for improvement in 2020.
In fact, get started by watching the full webinar today.