As we explored in a recent blog post, bid work and negotiated work can play a vital role in a fire alarm installer’s business. Both approaches have their own challenges and opportunities, each of which an installer will have to take into consideration throughout his or her career.
To help you weigh your options, let’s take a closer look at the pros and cons of negotiated work, as well as some strategies you can use to acquire more negotiated work.
Pros and Cons
With negotiated work, dealers are working directly with the building owner to establish the terms, budget and timetable of a given project. This direct relationship can be very beneficial to dealers because, unlike in bid work, the lowest price doesn’t often come into play. Rather than price guiding the project, it’s the established relationship between the end user and the dealer that provides the opportunity here. The more happy customers you have, the more negotiated work you’re likely to secure.
Another positive aspect of negotiated work is the fact that dealers are still connected to each system long after the install. Since you’re working directly with the building owner, you’re well-positioned to offer ongoing service and support following a negotiated bid project.
Finally, negotiated work is not as connected to the ebbs and flows of the construction market. Since these projects come from your existing customer base, rather than new builds, the work is available at any time. This makes negotiated work a strong source of continual income.
One of the challenges of negotiated work, which some may see as a con, is that it requires installers to be a “jack of all trades.” While bid work is often siloed by system – e.g., fire alarm, access control, telephony – negotiated work often involves a little of everything for a given customer. Although some may view this as a negative, I’ve always thought it was a positive. A wide variety of negotiated work bolsters your portfolio, which will only lead to more opportunities in the future.
Find More Negotiated Work
Most negotiated work comes from your existing customer base, so every successful install could lead to additional projects. You already have a relationship established with your customers; here is your opportunity to build upon it.
Reach out to your existing customers every quarter or twice a year to offer additional or updated services. Whether you work with telephony, electrical or access control technology, make them aware that you offer more than just security systems. You have the rare opportunity to save your customers money or provide them improved service. Don’t miss out on it.
Here are a few ideas for finding negotiated work opportunities in your existing customer base:
- Ask, “Do you know we offer superior fire alarm monitoring that beats your current rate?”
- Find out if they have carbon monoxide detectors. If not, make sure they know about CO requirements.
- When fire alarm codes change in your area, contact each customer to inform them of any vulnerabilities and liabilities. Help them upgrade their system and stay in compliance.
- Offer to upgrade their phone lines to GSM or IP – a proposition that could save your customers up to $200 a month by eliminating third-party phone company fees.
- As customers approach the end of their service agreements, contact them and offer to upgrade their systems. This is a perfect opportunity to secure a new contract, which is a win-win for you and the customer.
Installers who make negotiated work an ongoing part of their business are well-positioned to create a strong, consistent cash flow. If you’ve operated primarily in the bid market up until now, this is the chance to start focusing on your customer relationships and putting them to work for your business.
About the Author
John Maccone is the director of sales for Fire-Lite Alarms at Honeywell. An industry veteran, John has worked in the industry for 35 years and with Honeywell for 14. In his role, John serves as the lead representative of the Fire-Lite/Silent Knight and Honeywell Power brands to the corporate offices of the nation’s leading and largest installation, service and monitoring providers.