Posted on Jun 02, 2008
John M Grau
The other day I was glancing at a magazine published by a non-union electrical contractors group. In an opening editorial by the group’s president, I came across a line claiming the group represented contractors performing “86% of private sector construction work in the U.S.” That caused me to sit bolt upright in my chair, ready to fight.
Non-union groups are good at throwing around exaggerated statistics that go unchallenged most of the time. Our recent market analysis shows that union electrical contractors perform around one-third of all electrical work in the country. Our own data aside, it’s pretty ballsy for an association of only about 1,800 members nationwide to claim that they represent all non-union electrical contractors. I also noted the clever phrasing referencing “private sector” versus “all” electrical construction work.
Then I sat back, took at deep breath, and started thinking about what I was doing. I was reminded of a CIR presentation I witnessed where the management representative stated in his oral argument that union electrical contractors in his area had a 12 percent market share. In rebuttal, the union business agent called the chapter manager a liar, because he had a study showing that they had a 15 percent market share.
Maybe the spread between 14 percent and 33 percent is a little bigger than the difference between 12 and 15 percent, but is the distinction any different? What kind of bragging rights does a 33 percent market share actually earn us?
The bigger danger in trying to justify a low market share is that we accept viewing ourselves in a permanent minority position. If 33 percent is okay, then falling to 25 percent isn’t all that bad.
In my mind, if we don’t really think we can control a majority of the market, then we never will.
I remember when I first became CEO of NECA the publisher of our magazine, ELECTRICAL CONTRACTOR, told me that in terms of display advertising revenue, we had a 20 percent market share. He explained that our major competitors at the time, EC&M and CEE, were owned by McGraw-Hill and could draw on their vast resources to outdo us every time. He said that give or take a percentage point or two, 20 percent of the advertising market was the best we could ever expect.
When that publisher retired, I replaced him with a young fellow with lots of new ideas who didn’t accept limitations on what he could achieve. Within a couple years, he had our market share up to 50 percent. Today we have the top magazine in the field with market share in the 70-80 percent range.
The lesson here is that we shouldn’t waste our time quibbling about statistics or trying to justify a poor position. If we don’t perform a majority of the work in a market area, then we’ve lost. Period. Our goals should be ambitious and our effort should match it. Let’s chose to be the victor, not a victim.