Building owners are always concerned about upgrading their facilities and decreasing operating costs. However, they are still concerned about the image their facilities present to customers, suppliers and the general public because maintaining a positive public appearance is critical to the overall success of the business.
The most important facet of reducing operating costs may be upgrading the lighting system that most people outside of the building never see. That's because the largest single component of a commercial building's electricity bill is lighting, according to the U.S. Department of Energy.
Overall, utility costs are the largest expense per square foot for commercial buildings when compared to cleaning, repairs/maintenance, roads/grounds, security and administration, according to a report published by the Building Operating Managers Association (BOMA), Washington, D.C. BOMA states, “Utility expenses have grown at a rate of 9 cents per square foot since 1999 and are expected to trend upward for many years to come.”
Because these operating costs continue to rise, it's important you help any customers with building management responsibilities understand why controlling lighting costs is critical to managing their overall operating costs. It's important to them — and it may mean additional sales for your company if you learn how to utilize lighting audits.
THE LIGHTING AUDIT
A lighting audit is the simplest and most effective way to evaluate the current lighting system and identify methods of reducing long-term operating costs. Many building owners may ask, “Why do I need a lighting audit? I have a reflected ceiling plan or ‘as-built’ drawings when the building was completed.”
Unless the building has just been finished or is very young, how would a building owner or facility manager know the existing system matches what is on the older plans? They can't know for sure. Providing a lighting audit gives building owners and facility managers the tools necessary to understand their current lighting system and sell potential system improvements to those with management authority over the buying decision at their companies. Most of your customers will recognize the value of an audit, but many may not understand exactly what a lighting audit entails. The sidebar, “Lighting Audit Basics,” on this page summarizes what could be included in a lighting audit.
Concerns and benefits
The list of questions and considerations provided in the “Lighting Audits Basics” sidebar is extensive, but not fully comprehensive. That said, a lighting audit of a facility would take this input and provide detailed retrofit, conversion or replacement fixture recommendations complete with cost of project, payback analysis and annual energy savings. If required, task-specific light-level readings before and after a retrofit may be required to ensure levels are adequate after the lighting system is changed or modified.
A distributor salesperson contemplating lighting audits as a strategy to sell products may have the following questions:
How long will a lighting audit take to complete?
What happens if the customer takes my work and puts the project out to bid?
Can I get someone to help me with this audit?
Where do I find more about the potential energy-saving lighting products that could be used?
These concerns are valid. A salesperson's time is his or her product, and if time is allocated improperly, the potential for success is limited. Let's take a look at methods to alleviate potential concerns about a lighting audit's financial considerations.
Existing costs of current products
Knowing existing costs allows you to complete a more thorough payback analysis. If you are already selling this customer, you know the answer. If not, what a wonderful way to identify your competition's pricing levels if the customer is willing to share them.
Required customer manpower/capital to complete project
If manpower is an issue, the salesperson could recommend turnkey project providers to the customer. Most times, these turnkey providers would perform the audit (with your help). They usually buy the products from you if the project moves forward because you supplied the customer. They can be a great source of financing if capital is an issue.
It's critical to ask two questions before completing an audit: Will the customer do the project if payback warrants it? What are the payback requirements? If the customer can't give assurances about going forward, even if the payback falls within the guidelines, you may not want to spend time on the audit. Additionally, do you know the customer's payback requirements on major projects? If not, a lighting audit can help identify that key information for this or other projects the customer may perform.
Though not mentioned in the lighting audit criteria, think about the value of walking into every room of your customer's facility. While performing the audit, you can gather information about other products in addition to the lighting system you are auditing. Many perceptive salespeople use the time during the lighting audit to identify other products the customer is buying.
When auditing the electrical inventory room, pay attention to the fuses, wiring devices, exit signs, cable and wire products, and all others. Are they yours? When performing the audit, who is in the building? Are their outside electrical contractors in the facility? Do they bring their own products or draw from the customer's inventory? (Most bring their own.) Do you currently sell to that contractor? Knowing who's working in the building provides a potential customer for you or your company.
Of course, the time you spend with the customer during the audit process in another benefit. Most customers will not allow you to walk around their facilities unattended. Many times, the “guide” is an electrician who works for the customer. Ask your “guide” questions about the training seminars your company or the vendors that you carry have completed at the facility.
Most people want to be trained on what's new. Gathering this information can provide other product opportunities while investigating the lighting business potential. Additionally, wouldn't it be nice to identify the value your competition is or is not providing to the customer?
A lighting audit gives the customer some extremely valuable information. It also takes a significant amount of time to complete for a larger facility.
Should you charge the customer for the audit? Experience shows most companies do not charge for audits because customers usually would not pay for them. They are gaining the value of the information, but they also feel they are spending money to collect the data in their efforts when they take you on a tour of their facility and spend time analyzing your proposal. Many customers also feel, “If you want to sell me this upgrade, you need to provide the financial analysis to help me make the decision.”
If you identify upfront that the customer is willing to go forward with the lighting retrofit if the payback makes sense, don't charge for the audit. Many customers will give preferential treatment to vendors who complete the analysis. Pricing would have to be extremely competitive, but in most cases, the company performing the audit should have a good relationship with the customer and understand the chances of success if the project is completed.
Unfortunately, the audit does not guarantee a sale. When considering the consequences of the time spent, remember the side benefits of going through the process. They may be more valuable than the cost of an audit.
LIGHTING AUDIT BASICS
This sidebar highlights some of the most basic factors that audits evaluate. Most lighting professionals rely on lighting audit software to perform their audits. This software is available from the major lamp manufacturers, as well as through the U.S. Environmental Protection Agency's Energy Star program. A free download of this software, called ProjectKalc, is available online. Go to EPA's Web site at www.epa.gov and type “ProjectKalc” in the search engine.
Fixture count (by type) of every lighting fixture in a facility
- Room by room
- Common space
Fluorescent fixture type analysis
- Lamps per fixture
- Existing lamp type
- Existing ballast type
- Are fixtures dimmable?
Incandescent fixture analysis
- Existing lamp type
- Existing fixture type
- Are fixtures dimmable?
High-intensity discharge (HID)
- Type and wattage
- Existing ballast type
- Does light source fit application?
- Can the existing system provide energy savings?
- Task-specific light-level readings
- Height of ceiling/fixtures
- Color of floors and walls
- Length and width of room
- Open office area with partitions
- Single use office
- Occupancy sensors present
- Hours of operation (may have to use general assumptions for common use area)
- Room specifics
- Cost of electricity (per hour and demand)
- Existing cost of current products being purchased
- Does the customer have the manpower to complete the project?
- Does the customer have the capital to complete the project, or is financing required?
- Would the customer do the project if the payback warranted it?
- What are the payback requirements?
MEET DOUG WALO
Doug and Patty Walo started Walo and Associates in the fall of 2002 to provide sales and marketing consulting as well as health wellness consulting. Doug runs the sales and marketing side, drawing on experience as a director of sales at Stuart C. Irby Co., Jackson, Miss., and Standard Electric Supply, Wilmington, Mass. He previously worked 13 years for Osram Sylvania, Danvers, Mass., in various sales, marketing and sales management positions. During his career, he has managed work teams from four to 100 people and has spent the last five years on the executive committees of various companies.
You can contact Doug or Patty at (207) 935-2738 or by e-mail at [email protected]