The power of partnerships

Partnering with organisations that have complementary expertise has the potential to generate more revenue while also adding value for customers. Dan Scott, Commercial Director for the Philips Lighting Trade Channel, explains.

There are a number of situations where it can be truly said that the whole is greater than the sum of its parts. This is certainly true of partnerships that bring together organisations with complementary skills, knowledge and experience to produce a value added package that none of these could deliver on their own.

Clearly this is an approach that could be of significant benefit to wholesalers, enabling them to access specialist expertise from within their supply chain. Some readers may recall that when feed-in tariffs were introduced for photovoltaic (PV) panels a number of wholesalers teamed up with manufacturers and contractors to provide packages that benefited all concerned.

Whilst changes in government policy have altered the PV market, the same principles can be applied to lighting by working with a lighting manufacturer on commercial and industrial projects – right from the point of tendering for the work.

One of the main challenges when dealing directly with end user customers is fully understanding their requirements at every level. This goes beyond simply understanding the technical aspects of the lighting to include their business drivers and the potential impact of the lighting on key areas of that business. These drivers can include energy performance, enhancing the appearance of merchandise, facilitating intricate tasks and many others.

Working with a lighting manufacturer can make this whole process very straightforward as they will be able to carry out a site survey and identify a lighting solution that meets the client’s stated criteria.

Finding the solution

Once the requirements are fully understood, the next challenge is to identify the combination of luminaires, light sources and controls that will meet the client’s requirements. In some cases, this will necessitate a compromise where the client’s aspirations are not achievable due to technical or budgetary constraints.

Increasingly, the chosen solution will be LED lighting because of the benefits it offers in terms of energy efficiency and lifecycle costs – and therefore its ability to meet the client’s ROI criteria.

Calculating a return on investment (ROI) for each solution is therefore another important part of the process, for both refurbishments and new build. Again, the lighting manufacturer you partner with should have the experience to carry out these calculations on your behalf and help develop a solution that meets the client’s payback criteria.

With LED lighting another challenge presents itself to the wholesaler, as LED technology is developing so quickly that it can be difficult to keep up with the latest products – which may well be the ones that offer the best solution.

Clearly, a lighting manufacturer that has a comprehensive range of LED lighting products and an active R&D department that is continually developing new ones will be well placed to meet a wide range of requirements with leading-edge technologies.

Crucially, if the best ROI is to be achieved the controllability of LED lighting should be exploited by including a lighting control system. Such a system may range from simple stand-alone sensors in each zone to a powerful, building-wide lighting management system. The best choice will depend on the building layout and the additional ROI the controls will deliver against the client’s payback criteria.

A further advantage of this approach for the wholesaler is that LED lighting and controls are high value, high margin products that also deliver best value for the end customer, so it’s a true win-win situation.

A win win approach

Historically, lighting manufacturers have become involved with projects relatively late in the process. This is missing a trick – it makes more sense for that expertise to be combined with that of the wholesaler at the very early stages so that their shared knowledge feeds into the tender proposals to ensure the customer’s needs are truly met. This in turn will secure financial benefits for all parties. This approach could be the result of a manufacturer making the first contact with the client and introducing the wholesaler to the project, or the other way round.

This collaborative way of working has many benefits. The manufacturer’s ability to tailor a solution that is aligned to the client’s requirements – and ideally is better than the solutions being offered by your competitors – is very worthwhile. Along with assisting in the development of a business case they may also support with demonstrations of what LED lighting can achieve. This can be particularly important for a client that either hasn’t experienced LED lighting at all, or has had a previous bad experience of poor quality LEDs. Your lighting partner should be able to help with setting up mock-ups, or pilots in selected areas of the client’s building.

There are also other ways in which the right lighting manufacturer can add value to your proposition. For example, some types of LED lighting are eligible for Enhanced Capital Allowances (ECAs). These enable the client to improve the ROI by claiming 100% of the tax allowances in the first year, rather than spreading them over several years. The paperwork can be challenging but a company with experience of such things will make short work of it.

On the subject of finance, the higher capital cost of LED lighting can be a barrier for end users, despite the benefits over the life of the installation. In such cases a lighting manufacturer may be willing to offer a capital financing programme that links the repayments to the energy savings that the project will deliver. This approach spreads the cost of the products and installation over a pre-defined period, with monthly repayments that are calculated in relation to the predicted energy savings. This means that most, if not all, of each monthly payment is financed through the reduced energy bills for that month.

Furthermore, determining customer insights at an early stage and between a chain of partners can lead to a successful roll out program. This was clearly demonstrated in a recent project for Unite Students, where a strong partnership between Philips, the client, the wholesaler and the contractors has resulted in the solution being rolled out across their portfolio of student accommodation.

Early involvement can also unlock additional opportunities for the wholesaler. It provides the possibility for the wholesaler to add value with other products beyond lighting. This may result in additional product sales as well as an added benefit to the customer of potentially reducing the number of vendors they need to manage.

Partnerships really can be a winning formula. By working together from the very beginning a greater understanding of the real needs of the customer can be achieved and in satisfying those needs a greater business opportunity can be secured, whilst also maximising value to the customer. Everyone wins.

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