The strategy mistake panel builders commonly make

I started Panel Building in the year 1990 in a 1000 sq. ft. shed with conventional fabrication, painting and assembly methods. We would engineer welded Panels, custom designed and for each project, we would go back to the drawing board. It was a game of survival and thanks to the fact that I already had exposure to the Builders in Bengaluru, I would go about contacting them, Electrical Contractors and Electrical Consultants as well, which formed my marketing strategy.
It was, as for many others, a ‘Me Too’ game with literally no differentiation; barring the relationship and closeness that I had with my Customers. As long as there were no competitors around the corner, my margins would be decent. However, the moment a new Panel Builder surfaced and got in touch with my Customer, a blood bath in pricing would ensue, throwing the boat we were sailing in, into troubled waters.
It was frustrating, a hair-pulling experience and got me thinking “Is this the only way?” I looked around and spoke to a number of Panel Builders who were in A, B & C categories based on their sales revenues. How did the C category Panel builders transition to B and how did the A Category ones sustain and scale further? One answer emerged called “Qualification”!
For me then, no enquiry was a bad enquiry. I simply needed orders and would therefore quote for every mail that came in with an RFQ. The time I spent on this effort was painstaking and the conversion % of quotes sent was in single digit. And this is what I see most of the C Category Panel Builders doing. They simply are not aware of the Strategy of Qualification!
This journey starts with our inside world and then clarifies the outside world. We need to know what our unique strengths are. And if we look deep enough there is a DNA that cannot be copied, that is impossible to replicate and that distinguishes us in the world. And as much as there are strengths, there will be weaknesses. Like one may not be comfortable travelling across geography, another may not be having cutting edge technology in a specific line and yet another may feel more comfortable with a specific Customer base rather than spreading himself thin.
The key is awareness, alignment and action in the direction of synergising our strengths to the biggest need in the marketplace, which we are able to identify with. And this is the basis for qualification of enquiries received. The ability to say “NO” is directly proportional to the clarity of our purpose, direction of our goals and the pulse of our dharma. This business target then needs to be broken down and further filtered into category of Customers, geographical spread to focus on and the other qualification criteria we need to seek out.
Customers can be classified thereafter, based on these criteria into A, B, C & D categories:
A is for Awesome customers wherein you get a high value perception from them, their need for the strengths you have is high and therefore the ROI is excellent for you.
B is for Breadwinning customers, who are the base load needed for the factory. They need you and you need them. Their orders may not be high margin, but without them, meeting your overheads would be difficult. These are majorly the appropriate category of Electrical Contractors or OEMs whom a Panel Builder serves.
C is for Convenient customers. They come in like a breath of fresh air, hand over an order out of the blue and are rarely to be seen again. They are important but can neither be ignored nor relied on. They cannot form part of a marketing strategy, but simply good to have, when around.
D is for Dangerous Customers. They will make you work real hard for quotes, take up a whole lot of your time and the orders, if at all placed would not be commensurate in margins with the time spent. They need to be avoided like the plague.

Every half year, we will need to identify from our Sales Journal as to who are the 20% of our Customers who contribute to 80% of our revenues / profitability. And also who are those 80% of Customers who have contributed to just around 20% of the revenues / profitability. The action to be taken simply emerges. We will instinctively know where we need to focus on and more importantly, where we should not be focusing on.
If you are a Panel Builder, pause now and do this exercise as above. It has the potential to transform the direction of your business. And this direction is much more important than speed, you will appreciate. We do not want to be like that guy who painstakingly climbed the ladder, step after step, till he reached the absolute top, only to find that the ladder was leaning against the wrong wall!
Now, let’s consider that you have done your homework, understood the path to be pursued and are clear on the way forward. There then is the next step of how you are going to scale profitably? By yourself or in partnership? If in partnership, with whom? How to choose and what to consider? If we choose one partner, then will we be automatically saying no to other partners? Is this a good thing or a bad thing? Does loyalty in alignments work counterproductive? Is choice in all aspects of market approach the better way?
As you mull over the above questions, let me place for your consideration the importance of backward integration and forward integration to develop a strength that would heed you well in your costing and thus profitability. As a Panel Builder, what is your strength? Electrical or Mechanical? With Industry trends moving towards AI, automation and digitalization of the Switchboard, the leaning is on Electrical, right? And did someone say that our Focus is our Future and what we focus on will multiply in our life?
Then what are you focusing on? It’s a no brainer that it has to be electrical and if you can manage it, outsource the mechanical, so that time spent there, can be shifted to the Customer. This needs the development of a reliable source of switchboard enclosures. These are ideally to be type tested to all the latest standards and easily available, quite affordable and very adaptable to your Customer’s changing needs. Do check out a partnership with Modutec. (www.modutec.net) (https://www.youtube.com/@modutecreadypanels2563) (https://www.linkedin.com/in/ramani-mani-6a27a142/ )
Now consider that nearly 40% of a Panel Builder’s selling price is switchgears & 25% the enclosure system. The later we have dealt with above. With respect to the Switchgears, exclusive partnerships is what we see as thriving in Countries overseas. In India, the B&C Panel Builders mostly flirt around with different brands of Electricals. Whereas, the A category ones, largely are seen to be loyal. Why? Because they align their goals to a win-win and leverage the sales strength and brand value of their chosen partner as well.
Another benefit that arises out of such a partnership is the fact that your shop floor workers will feel comfortable about installing the same make over and over again as they will not have to waste time, learning about different terminal arrangements, mounting philosophies and so on. Inventory carrying becomes more lean and optimised and the impact of this on cash flow, goes directly to the bottom line. And then there is the closeness to this larger company from whom the opportunities to learn, distilling the advantages for your Customers and using them as a differentiating factor, plays a vital role to close deals.
So choose your enclosure partner, your switchgear partner and then look for who else. If your Customers need Power Factor Quality improvement, choose a specialist alignment here. If you are in the line of serving DG related Customers, choose to shake hands with a manufacturer of Synchronising Panel relays, meters and accessories. If you have resources to get into Compact Substation business, look for similar alignments with Transformer manufacturers and so on.
End of day, there is more power in collaboration, partnership and growing together, than there is in walking the distance alone. Relationships are always tricky and for those married, you would agree with me. The trick lies in living and let live, respecting and being respected and these are all learnable skills which empowers an enjoyable journey, which truly is the destination. Isn’t it?
So, relook at your strategy, consider the options above and arrive at what best aligns with your uniqueness. Differentiation is no longer an option, it is an obvious response. Here’s wishing you all the best to arrive at what it is for you and your Company. It’s not a one size fits all. And its evolving too based on emerging trends. But if you miss to get aware of the importance of strategy, then you will end up doing a lot of hard work, not smart work! The choice is ours, as always.