Lighting retrofits was one of the first services that savvy Electrical Contractors offered to their customers – especially for those contractors who were also offering Energy Management/Reduction products.

In the early days before the economic downturn (and in the early days of LED’s), lighting retrofits almost sold themselves because customers recognised that their lighting systems were outdated and they believed that upgrades would reduce recurring energy expenses and be environmentally responsible.

As the energy services’ market has evolved, customers changed their view and began looking for new and additional and more effective ways to reduce their energy use and demonstrate their commitment to the environment, especially with impending Government and EU regulations to reduce carbon consumption.

Lighting retrofits can still be a very profitable part of an Electrical Contractors portfolio of products. and here, you’ll see why LED lighting retrofits can still be profitable and how such services can help the customer improve its business results.

Marketing lighting retrofits for Contractors

To be successful when selling LED lighting retrofits in today’s market is often about educating customers whose businesses would benefit from keeping their lighting systems up-to-date and in working order. Because there are many routes to market – often via Facilities/M&E Contractors, Managing Agents, Consulting Engineers etc. often the biggest challenge is convincing the bill payer (occupier, or landlord)

The Electrical Contractor must be ready to address the following three common customer objections to proposed lighting retrofits:

  1. There is nothing wrong with what we have got now – My lights work just fine.
  2. We have just upgraded our lighting system.
  3. I need to invest in other more important things in my business, not lighting.

Customers who object to a proposed lighting upgrade tend to give reasons similar to one of these three. To overcome these customer objections, the Electrical Contractor must be able to show why the proposed lighting retrofit is in the customer’s best business interest.

Objection 1: There is nothing wrong with what we have got now – My lights work just fine

When the customer switches on their lights, the lights come on, but it does not necessarily guarantee quality lighting that is suitable for the task at hand. Lighting quality is more than just the quantity of illumination that the lighting system provides, it also helps people perform visual tasks more effectively and efficiently than they otherwise could.

These visual tasks are not just work tasks such as assembling a product in a manufacturing plant or performing clerical work in an office environment. In this context, the term “task” includes anything that requires seeing to perform a required function. “Tasks” in a lighting sense can refer to a wide range of activities, from a shopper picking out a new jumper in retail shop to a hotel guests ability to read the menu in a restaurant.

Naturally, the quantity of light the system provides is important, but it has to be the right amount of light. Furthermore, the quality of light can affect productivity and the visual comfort, mood and safety of people occupying the space. There are many other factors—such as colour rendering and glare, along with occupant age, required visual acuity, and time to perform the needed tasks in the occupied space—all are important for a quality lighting system.

For example, improved lighting quality in a retail store can raise customer perception of the retailer and the quality of its goods, productivity in terms of sales per square foot, employee productivity and transaction accuracy, and the number and length of customer visits.

Objection 2: We just upgraded our lighting system

Customers are often simply focused on their main businesses and often don’t understand that efficient and quality lighting can help them achieve their financial goals. Customers often (wrongly) believe that a lighting retrofit is good for the life of the existing light fixtures and controls, needing only occasional maintenance to replace burned-out lamps and associated components.

For this reason, many Electrical Contractors are often reluctant to propose a lighting upgrade/retrofit to a customers business, even when the customer’s business could benefit. If you make the mistake of buying into the customer’s mistaken objection that they have “just upgraded” the lighting system ignores the fact that both the customer’s business are constantly changing as well as rapidly changing lighting technology is advancing at a frantic pace.

Overcoming this objection means that the Electrical Contractors first understand its customer’s business challenges and how improved lighting quality through an upgrade can benefit them, and then the Electrical Contractors can put together a proposal that focuses on the benefits to the customer’s business.

A good way to approach marketing lighting retrofits is to think about why you regularly upgrade computer hardware and software even though it is still “working fine.” Put simply you decide to make the financial investment because the technological advances cause your existing system to become obsolete long before it breaks down and stops working properly.

When you think about the potential increases in productivity that upgrading existing hardware and software will bring, then these type of investment make good business sense.

The same principles apply to your customer’s lighting system, but the advantages of upgrades may not be as obvious. Clearly one of the major factors is the huge difference in running costs vs their current system. Customers are blissfully unaware that (in a commercial office environment) with a multitude of fluorescent tubes that their lighting represents around 40% of their overall electricity bill.

To make matters worse their “upgraded lighting” – what we call maintenance, also adds a substantial cost not only in materials but manpower to replace the aforementioned burnt out lamps and other components.

Overcoming the mindset that lighting systems are good for their “operational life” and don’t become obsolete means that you will have do some research and provide information and analyses that your customer needs to understand the good business sense behind upgrading, these include overall current running costs vs the new system, payback and ongoing financial benefit to the bottom line

 

You will rarely drive your car until it is completely worn out and has to be towed to the scrap yard.

Instead, you will replace your cars regularly which is based on it’s economic life rather than useful life.

This is how you should sell lighting upgrades based on advancing lighting technology and the savings that can be made.

Even though the customer may have moved into a new property or recently had it refurbished, there is no guarantee that their current installed lighting is any good for their specific business needs or meets the needs of the tasks to performed therein.
Furthermore, these customer’s businesses don’t stand still, therefore they will need applicable corresponding changes to the way the space is used. What is considered good quality lighting for one area may not be adequate or could even be detrimental if they change the space being used and the lighting isn’t.
Put simply the lighting system must be designed, installed and controlled so that people can perform visual tasks efficiently and effectively in the applicable space.

Additionally, lighting technology is advancing at a frighteningly fast pace with these new technologies becoming commercially available almost weekly. Also formerly expensive products such as LED Panels are now becoming more economical due to advances in technology, increased demand and more efficient manufacturing.

Like the computer hardware and software that we mentioned earlier, what was state-of-the-art in light sources, fixtures and lighting control systems just a few years ago is now considered old hat.

Therefore it has become financially attractive to upgrading an existing lighting system based on increased efficiency, fast payback, reduced maintenance or functionality even though the customer’s existing lighting system still “works.”

Determining when it is more financially viable to replace something that is working rather than wait until the end of its useful life is referred to as replacement analysis. If you can work out a replacement analysis for your customers is the key to selling lighting upgrades based on new technology.

Objection 3: I need to invest in other more important things in my business, not just lighting

Commonly, your customers often think of a lighting upgrade as an expense rather than a Business investment that can provide a low-risk path to substantially reduced electricity bills, increased productivity and improved profit.

Therefore, when you propose a lighting upgrade to the latest proven technology, your customer will regularly express the need to invest in their core business rather than in a lighting upgrade as they expect it to reap greater benefits.

Therefore, your customers tend to rank a lighting retrofit below other possible business investments, such as a new marketing campaign or the latest production equipment.

To sell lighting retrofits effectively to your customers, the Electrical Contractor must demonstrate that a lighting retrofit isn’t just a Business expense but an investment that will pay dividends just like any other business investment.

Depending on the customers property type and Business situation, upgrading their lighting system can improve revenue, reduce expenses and commonly both. Increased turnover can result from more sales to their customers; improved customer satisfaction and loyalty; increased employee productivity, and many other factors, depending on the customer’s business type.

Additionally, an upgraded lighting system  will result in reduced electricity bills and improved employee productivity and satisfaction. Increased revenues and reduced expenses result in increased profit and, ultimately, a greater return on investment for the customer.

While it can often be difficult to exactly quantify the impact of improved lighting quality on the bottom line, the effect of energy savings resulting from more efficient light sources, upgraded fixtures, and controls is not.

Reduced energy expenses from a lighting upgrade are virtually a risk-free investment for your customer when compared to other less certain investments such as a new advertising campaign or product launch.

When selling lighting retrofits based on energy savings alone, the Electrical Contractor needs to demonstrate the potential return on investment for its customer through short and long-term financial analyses.