Let’s IllumeTALK about common obstacles in commercial lighting program management!
So, what exactly is the “catbird seat” of commercial lighting program management? And, what’s holding many organizations back from pursuing LED lighting upgrades and more energy efficient environments?
Get those answers and more in the very first episode of IllumeTALK! Listen now:
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IllumeTALK, Episode 1: Views from the Catbird Seat – Understanding Common Obstacles in Commercial Lighting Program Management
Aaron Woloszyn (AW): Hello, I’m Aaron Woloszyn. Welcome to IllumeTALK – a new podcast brought to you by your friends at Illumetek Corp.
Today I’m sitting down with Erin Plivelich, the president of Illumetek. She’s going to be our first guest and aspiring IllumeTALK host, in case I screw this up.
Erin, why the hell are we here today?
Erin Plivelich (EP): Well, we are here to shed light on the lighting industry – particularly from our perspective, which is the catbird seed of program management.
AW: What do you mean the “catbird seat” of program management?
EP: Well, we occupy the place in the industry that touches all the pieces and parts of a successful lighting upgrade – the client, the manufacturer, distribution, rebates. We handle the deadlines and the budget, etc. And over the years, it’s given us a great perspective on what really works.
Why do you think we’re here Aaron?
AW: Two reasons actually. One, as you know went to the PRSM conference in Nashville back in April and we listened to Gary Vaynerchuk give a keynote on digital marketing. And, I thought it would be pretty cool if we had a podcast, and went with his suggestion.
AW: Secondly, there are a lot of exciting things happening in our industry right now.
EP: So what is our inaugural podcast going to be about?
AW: As you know, I’ve been in the lighting industry now for eight years selling these kinds of lighting systems.
AW: And as the tech has changed so has the sales cycle.
AW: I’ve watched a lot of people struggle with obstacles such as budget and product knowledge, so to speak. And, how to successfully execute a program.
EP: Okay. Well, then let’s dig in with those topics.
AW: President’s Choice – where you want to begin?
EP: Um, let’s tackle product first. So, what is the single greatest hurdle you have to overcome in the sales cycle as it pertains to product?
AW: Probably the myth of the exploding tube.
EP: The what?
AW: The misinformation that’s out there in the industry right now. I had an experience at LIGHTFAIR this past year where I was talking with a potential client and they had told me that Type A LED tubes – which run off of a fluorescent ballast – are prone to exploding.
EP: Oh… well, that’s helpful.
AW: It’s also not really true at all. I mean these products are designed to run how they’re supposed to run. So, it’s that kind of information that’s out there that I find hard to combat.
EP: So, really what you need to do is begin the process with educating the customer.
AW: Absolutely. Do you feel like the market is flooded with product as well?
EP: Oh, yeah, absolutely. I mean, with the advent of solid-state lighting, when it really came on strong in 2014 and 2015, the lighting industry changed dramatically. The manufacturers were struggling to figure out how they were going to remain relevant.
Basically, we’re at the peak of efficiency with LED. And the MRO business – the stock and flow replacement business – was going to go away with the solid-state lighting lasting so much longer, and being an additional significant maintenance savings for our customers. And so, as manufacturers were struggling to figure out how to reinvent themselves, you saw the Tier Two and Tier Three manufacturers being able to come on strong and actually compete against the leaders in the industry. And then we found that as people were morphing from simple lighting systems into connected systems – where suddenly LED lighting is capable of so much more than just lighting and now we’re talking about IOT – you see lighting manufacturers competing against technology companies.
So, the the whole dynamic of what we’re selling with lighting and what our customers have to understand and wrap their heads around has changed dramatically over the past five years. I think what we need to do is help them understand –
Are really long warranties a gimmick?
Are you talking to a manufacturer that’s reputable?
Are you talking about a product application that’s relevant?
Are you looking at the the best possible solution for what you’re trying to achieve?
Are you potentially cutting yourself off from from future proofing your facility if you’re only looking at the lowest cost solution?
Those are the questions that our customers are bringing to us and trying to wrap their heads around, and I think that’s one of the reasons why it’s so great to be a good consultant on behalf of our customers – and bring as many different manufacturers to the table as we can to make sure that we’re really giving them a right fit at the end of the day.
Music Transition to Segment 2
AW: Can you touch really quickly on the idea of future proofing?
EP: Oh gosh, that’s like a whole other podcast in and of itself, but I mean really what we’re trying to say to customers these days, are lighting systems are going to be capable of a lot more – don’t cut yourself off from that full potential. Make a choice now that allows you to pull data and select outcomes and make really interesting choices for your building, for their occupants, for your customers. That’s a whole other podcast. We got to work on that one later.
AW: So basically what your saying is, customers need educated partners to help them make the right choices.
EP: Educated and agnostic. It’s important to be able to bring a lot of options to the table. Absolutely.
AW: Earlier, you said we sit in the “catbird seat”…
Let’s talk about resource management for a second. From your experience Erin, what’s the single most important thing for successful execution?
EP: Um, I think that’s definitely centralized control. You want to have that one throat to choke, so to speak, but the ability to work across multiple stakeholders. So at the beginning of every program there’s always a focus on product, spec and performance, which is good. That’s where it should be at the beginning, and then of course ROI is imperative. But once you get beyond those initial parameters, you need to have the ability to stay within budget to minimize disruption during an enterprise-level rule out, maximizing speed to ROI and then handling a successful post-op. Those are all really crucial elements for overall success.
AW: Do you have any examples where you brought all those elements together for a client?
EP: Um, yeah. Two years ago we had a customer come to us. They had 4,000 locations that they wanted to get done by the end of the year, and we started these conversations with them in March. So it was a really aggressive timeline.
AW: How do you accommodate an accelerated time frame like that?
EP: Well, we spearheaded the effort with working directly with the manufacturer and the distributor that that the client wanted to work with. Um, as well as all the local utility companies for the rebates, and we brought all of these stakeholders together and set out what the goals for the program are going to be. Basically figured out where we needed to be at the end of the program and worked our way backwards.
And, once we got everybody on the same page, it was not a very difficult task because everyone had a really clear idea of what success was going to look like.
That’s the most important part of of the piece of the puzzle is to know what success looks like for that particular program and then work your way backwards from there.
AW: What does success look like to you?
EP: Well, it varies from client to client. It’s… it’s what’s most important to them what they are trying to achieve and and what’s going to be the most effective program that you can put together to meet their needs. Like the example I just gave you, that timeline was crucial for them. They absolutely had to have those locations completed by the end of the year. So you balance all of the necessary deliverables to make sure that you’re achieving that ultimate goal on their behalf. And then crack a beer when it’s all over…
AW: Or two…
EP: Or three… Yeah.
AW: It sounds like there’s a lot that goes into executing these programs successfully and it’s very easy to say drop the ball on it.
EP: Mmhm, yeah, it’s a difficult thing to pull it all together.
AW: Is that why we play “cleanup crew” a lot?
EP: [laughter] Yes, probably. We do we do tend to get programs that, um, sometimes others have failed at.
AW: So we’re like the “pooper-scooper” cleanup crew of the lighting industry.
EP: Um, yeah, I guess. [laughter]
AW: Let’s move on.
Music Transition to Segment 3
AW: Third and final point here. Let’s talk about budget.
EP: Okay, show me the money!
AW: What if I don’t have any money to show you?
EP: Okay. So, the first point is – there’s always money. It’s just hidden in the savings.
AW: Like, a pay for itself kind of thing.
EP: Yes, so one of the things that I think is the most interesting that’s happening in the marketplace is these third-party companies coming on and just disrupting the traditional performance contract model.
So you are hearing terms like “lighting-as-a-service” or “energy-as-a-service” and what companies are starting to do is fund programs on a subscription basis model – where they guarantee ROI, they guarantee positive cash flow and they guarantee equipment performance.
So companies can now benefit from a much simpler performance contract model that allows them to shed the risk and they put it all on to a third party allowing them to remain focused on their core competencies.
AW: So you can gain access to the savings on day one.
AW: Without the financial burden?
EP: Or logistical risk.
So you are taking all of that burden and transferring it over to a third party, and that third party is taking all of the responsibilities onto themselves and guaranteeing it day one – results, performance, everything – day one for the customer.
I think it’s definitely a disruptor and I see more and more people paying attention to what that model can do for them and they’re thinking about lighting, potentially more as a service rather than a capital cost.
AW: Do you think people are struggling with the additional costs of lighting product today?
EP: I think it’s been an obstacle for sure in the past. It definitely contributed to the perceived need for a long warranty. Um, but prices are coming down and features are going up. So, it’s a very advantageous time for customers, even if it’s not necessarily advantageous for the manufacturers.
The value a customer can derive from an LED system that has peak energy efficiency and long life, as well as internet-connected capabilities, is like nothing we’ve ever seen before. People are going to need to think about it in terms of the value of the system as opposed to just the return on investment from Energy savings.
So, not to get too off topic, but at some point those budget dollars will be responsible for a lot more than just the lighting, and people will have to shift from thinking about just return on investment from an energy savings perspective, to the value of the system and what they’re going to be able to do with it in the future.
AW: That’s a good point Erin. It is about so much more than just lighting!
EP: Should we save it for the next podcast?
AW: I think so.
AW: I do have one last question for you though.
AW: Did I screw this up?
EP: We’ll let the jury decide…
AW: It’s been an absolute pleasure having you on IllumeTALK today. Thank you for joining me and sharing your insights.
EP: It’s been an absolute pleasure being here, Aaron. I think IllumeTALK has a very bright future.
AW: Really with the pun? Okay, we gotta end this now.
I’d like to thank Erin again for being a part of IllumeTALK today. If anyone out there has any questions for us, please don’t hesitate to reach out on LinkedIn or through our website illumetek.com
That’s I-L-L-U-M-E-T-E-K. We also have an Instagram account for this podcast @illumeTALK.
Thank you for listening to our first episode. We’re set to bring you one of these each month. So be sure to stay tuned because we have some really great things in store.
A special Thank you to producer Bridget Coyne, editor Julie Fink and audio engineer Dave Douglas.
IllumeTALK is a production of Front Porch Media. To learn more about this and other podcasts, please visit thefrontporchpeople.com.
And, until next time, turn the lights off when you’re not in the room.