6 minute read
The Evolving Role of the Lighting Agency
BY CARLOS ALONSO-NIEMEYER
Reflex Lighting Group
Every day we hear of changes – changes in technology, culture, transportation, and even changes in the weather. In the lighting industry, the role of a lighting agency is evolving as they face challenges, and over the next five years these changes will be more visible.
Lighting Agencies Will Not Go Away
Lighting manufacturers depend on lighting agents for market knowledge and for their personal connections in each territory. Large or small manufacturers cannot service hundreds of lighting designers, engineers, and distributors. The resources needed to promote products, coordinate sales transactions, and provide customer service are so labor intensive and complex, that it would be extremely costly for one manufacturer to do it all. Therefore, lighting agents, or representatives, are the face and physical presence in each market on behalf of manufacturers.
Twenty to thirty years ago, our industry was complicated because it required the expertise of lighting specialists who could navigate the complexities of running a business and master the world of ballasts, transformers, and lamps. This work was done with fax machines, telephone calls, and paper catalogs.
Faster Response, Using New Modes of Communication
Along with the adoption of solid-state lighting and LED products, we have gone through an acceleration of the service cycle of the industry, with our clients, from designers to distribution, requiring new, and faster, levels of service. We now live in a service environment that requires instant response, where websites, email and text messages are the way of communication. This evolution is forcing lighting agencies to change and adapt.
Leadership and Succession
In addition to the pressure to evolve, lighting agencies all over the country are going through generational changes. Many of these organizations are small companies, founded or lead by one or two individuals. These people were industry leaders throughout their time, and in many instances, legends in their own territories, molding and inspiring lighting salespeople throughout the decades. But organizations need to change, and new leadership needs to take over to perpetuate the success of these organizations. Change is always difficult but inevitable.
An Audience that Values Service over Entertainment
There was a time when it was not unusual for lighting salespeople to rely on golf, cigars, scotch, and lunches to establish relationships with their clients. With changing demographics, our typical audiences making design decisions today are more likely to be people in their thirties, recent professionals with five years at their firms, married or single, perhaps with small children. This person is not interested in going out for lunch to have drinks - they want service, and accurate responses. Personal life takes priority over work; they want to finish on time to go home and be with their family and other friends.
Electrical engineers are busier than ever, often overwhelmed by the pressures faced to turn projects around. They need to have larger teams of trained, competent staff managing Revit. More than ever, they rely on lighting agents to assist with lighting controls to turn their work around. Lighting controls are intimidating for lighting sales professionals, but to be successful, the lighting agency salespeople collaborating with electrical engineers need to be technically competent. We need to train a new generation of salespeople on lighting controls.
Improving Internal Processes
Handling orders has always been a labor-intensive affair. The speed of communication has increased as orders moved from postal mail to fax machines and now email, but the industry is not yet capable of managing orders well at this increased speed. Manufacturers are working to improve the ease of doing business, with some manufacturers offering internet portals to expedite some of the transactions between distributors and lighting reps, but the process continues to be a mostly manual, labor-intensive job. A typical large project still requires submittals, approvals, shop drawings, color selection, consolidated deliveries, etc.; the order process is an administrative nightmare. Lighting agencies need to evolve and improve operations. Otherwise, the cost of doing business will stifle growth.
Leveraging New Areas of Revenue
In a fierce and competitive market, a 5% to 10% commission average for a lighting agency is not unusual. This revenue is not enough to support the infrastructure and resources needed to run a lighting agency. So, lighting agencies are constantly looking for alternate revenue opportunities. Unfortunately, these ventures can be a trap if not managed correctly. Some agencies are looking to engage in selling other non-lighting products, such as pipe and wire, tile, and even HVAC equipment. These new markets require different skills that are not easy to transfer. One dependable revenue opportunity is to provide lighting control services, including project startups, and service agreements. Some lighting agencies private label products to increase revenue.
Management and Leadership
In the next five years, we expect to see a generation of lighting professionals retire, leaving a void of expertise within lighting agencies. Lighting agencies need to recruit, retain and develop the resources that are needed for the future of their businesses. Our industry needs to build the next class of lighting professionals that will take over these organizations; the challenge is, where are we going to find these individuals?
More Trends in the Industry
We have seen an increase in multi-territory lighting agencies. These new agencies are stronger organizations that benefit from these consolidations.
Larger conglomerates will pressure other brands to change lighting reps in order for them to align line cards in multiple markets.
Lighting design firms continue to expand and open satellite offices, creating a challenge for lighting agents as they navigate the coverage and service for these multi-state clients.
Change Will Lead to Better Organizations
The next five years will change the landscape of lighting agencies as new business platforms and better teams are developed to meet the needs of our lighting industry. If we meet the challenges, the coming changes will result in better lighting agencies and a stronger industry.
