How do we get ‘more share’ of the consumer’s wallet?

Over the past few decades, Australian homes have been getting larger and more sophisticated, with consumers happily spending considerable money on their homes. We have more space, better quality and far more technology in our homes than ever before. And because of those increases, the electrical industry has experienced growth in its net worth. But that increase hasn’t been at the same rate as some other industries.

We’re kidding ourselves if we think the electrical industry has grown well over recent decades. Yes, we have grown and will continue to grow, but when we rank ourselves against other industries, we’ve actually lost ground.

While the electrical services dollar-spend in the domestic sector has risen, our share of the consumer’s wallet has actually diminished against other trades. The plumbing industry, for example, has done a superb job in convincing homeowners and builders to spend more money on plumbing. Most homes have two or three bathrooms and fully equipped kitchens. Homeowners happily spend more money on them, but what value-add has the electrical industry presented? The pie has gotten bigger, but our share of it has actually gotten smaller, because other services have out-marketed us to get more share of the consumer’s wallet.

Our industry has many great services and technologies to offer - home automation, energy efficiency, security, communications - but who’s offering them? It seems that consumers have been sold on benches and basins at the expense of smart-wiring and home automation. And who’s to blame? As an industry, we all are. And collectively, we can all do something to correct the situation. That involves manufacturers, distributors and contractors working in unison. Rather than reflecting on what’s wrong, let’s focus on what we can do to get it right.

Contractors often don’t know what they do know. That may sound contradictory, but it’s painfully true. For example, how many contractors actively sell surge protection to builders or homeowners as part of an installation? Not as many as should. We all know about its benefits; and most know how to install it when specified. But when it comes to upselling, not enough people think about its client benefits, let alone the commercial benefits to themselves. Contractors need to include value-adds as part of their bids to differentiate themselves as value-providers. And distributors and manufacturers need to support them in making and winning those bids.

We all have opportunities to upsell homeowners on more beneficial services that increase our share of their wallet. How can we do that? Start with education. As an industry, we’ve spent nowhere near enough time or money on training and development. According to the 2008 NECA survey, 74% of contractors spend less than $3000 on training annually and 63% spend less than three hours per month on personal development. Manufacturers and distributors are just as guilty in this matter. All of us need to lift our game if we’re to be successful in this endeavour. We’ve all got a lot of room for growth here. We should be the go-to point for consumers to find out about new products and better solutions.

Besides RTOs, there are many other training avenues. Manufacturers conduct training. The L&H Group* Traders 500 event is built around training. Our overall objective is to educate on upselling and ‘green’ opportunities. Our suppliers used it to educate too. I received positive feedback from many attendees, but perhaps the best example of using our event to the full is a contractor from country Victoria who hired a mini-bus to bring all his staff to the Melbourne event for the whole day. I think that sets the tone for all contractors to find ways to upskill themselves and staff to upsell clients for a greater share of their wallets.

* Robin Norris is CEO of the L&H Group, one of Australia’s largest electrical wholesalers, a position he has held since 1999. Norris completed his electrical apprenticeship in Hobart “a few years ago”, before joining the ‘old’ GEC in a sales role, then moving to L&H as Hobart branch manager 30 years ago.