“We saw all around us that unemployment remained very low — in Nebraska it was among the lowest in the nation — but even in our market we saw a lot of electrical con-tractors that shrank 15 percent of their pre-recession size,” he says.
“During that four-to-five year period we were able to maintain all of our employees, which when you put that in contrast to what was happening around us that’s just amazing, and since then we’re hiring employees and we’re growing, which is exciting.”
On the hiring front, the management team says its prime candidates start with those who come out of the local community colleges with an associate’s degree in electronics, though Petersen notes that the competition for such prospects is fierce. So Electronic also isn’t opposed to “casting a wider net” and training people.
“If you have the right attitude and work ethic, you can march through the ranks of Electronic as well,” he says.
Servicing the Customer Before, During, After Sales
In terms of its continued success, Electronic saw revenues of just under $27 million in 2014 ($26.8M) from its commercial projects. Like other commercial integrators, Electronic is grappling with the greater emphasis being placed on recurring monthly revenue (RMR) these days.
An advantage the firm has in that arena is its entrenchment in the security and life-safety sectors since the early 1970s (“We installed the first [CCTV] cameras in the city of Lincoln (for a bank) whenever they became available, and boy were they a piece of crap,” recalls Karavas), which includes potentially lucrative RMR from inspections.
Electronic prides itself on customer service, and provides 24/7 on-call service from all of its offices. Especially on the security/life-safety side, but certainly applicable to AV and other systems, the company focuses more on working with existing customers than the bid market.
In addition to Fire Alarm Inspection Contracts, the company also pitches Preventative Maintenance Contracts and Full Service Contracts to customers.
“Once we get a customer we service them to death before, during and after the sales service. This can go into maintenance, additions, upgrading their systems,” Karavas says. “So we stay in touch with our customers, and I stay in touch with a lot of our customers. That’s what kept us going during the so-called Recession.”
That’s helped Electronic reap rewards when it comes to multiplying projects such as health clinics and nursing homes, in which it has been successful implementing systems like access control, surveillance, wireless nurse call, asset and personnel tracking, and wandering resident, then streamlining reporting via its Monitor 32 software solution.
“We have one customer that now we’re up to 380 cameras and four campuses; we’ve done 18 Indian health clinics across South Dakota, North Dakota and Nebraska. When we do a job, it just works,” says Karavas.
When it comes to selling the service contracts (they are not sold by a specialist and not the same salespeople that sell systems design), Electronic’s solid reputation might even be its own worst enemy. The company estimates that 45 percent to 50 percent of sales bring some sort of RMR attachment, but would like to see that number closer to at least 70 percent.
In some cases, new customers will request the service or maintenance contracts because they are forecasting/budgeting expenditures several years out.
“In the industry there’s a one-year warranty period so anything in the first year is on us anyway; but typically we don’t have a lot of issues and so we offer on-demand service as well,” says Karavas. “But it makes it tougher to sell a maintenance contract because stuff isn’t breaking and so a lot of customers will take the risk and say, ‘If I need to call you I know you’re there for 24/7 service and I know I’m probably going to pay a higher on-demand rate, but I think I’m going to save the money of committing to a service contract.”
But that virtual catch-22 on RMR doesn’t negatively impact a company that’s been putting its unique stamp on integration with such rich history. It’s a success story the company can confidently tell, perhaps neatly summed up by Karavas conveying how Electronic was doing MNEC long before it became a buzz topic.
“In the ’60s and ’70s we were big in the Holiday Inn market,” says Karavas. “In each room there used to be cinder block dividers between the bathroom and bedside, and we had a panel the size of this concrete block that contained a Honeywell thermostat, a maid call jack, a message light, a [climate] blower switch, six channels of sound, volume control, a GE electric alarm clock … and at the front desk we had a message switch that with the touch of one switch you would blast 2 Watts of power into every motel room in case of emergency. We installed voice evacuation systems, mass notification, before anybody knew what they were … plus all the features on that panel, we can say that started us in our ‘integration’ business.”
