Weathering Volatility in the LED Lighting Market

Navigating LED lighting market volatilityIf the 21st century has taught us anything, it’s taught us the importance of preparing for volatility: In bad times, it may be the only thing keeping you from having to make some ugly business decisions.

To learn more about how to stormproof your business, we spoke with Mike Zumbrun, General Manager of independent rep agency Mid-Atlantic Lighting. Mike knows what he’s talking about: he and his team started their rep agency back in 2008 during the market crash.

Read on as he shares his company’s story of LED lighting market growth along with tips for how LED companies can prepare and adapt to surf the waves in the market.

Getting Started in the LED Lighting Market

Before starting the agency, Mike and his team had been factory reps for a residential lighting manufacturer. Several of them had backgrounds in residential and commercial LED upgrade projects.

When the 2008 downturn happened, the factory they were all working for wanted to cut some overhead and go into survival mode.

“We were given the opportunity to either roll ourselves into an existing agency in the territory or start our own agency,” Mike explains.

To be successful, Mike believed they had to be a resource for customers and not just another rep on the street. So, he and his pals took the leap to found Mid-Atlantic.

"I think a challenge with any new venture is bucking the status quo and finding new ways to do business. Finding new clientele, finding someone that has a problem and helping them out…at the end of the day, that's what builds relationships: helping someone solve a problem."
– Mike Zumbrun, Mid-Atlantic Lighting

Three Smart Choices

In the 12+ years since launch, Mid-Atlantic Lighting has only grown. Mike believes there are three specific choices they made along the way that have cushioned the business from the impact of economic downturns:

  • Serving both commercial and residential customers
  • Finding a niche between the “mom and pop shop” and the large, impersonal agency
  • Establishing and maintaining relationships for the long term

Here are Mike’s recommendations:

Multiple Eggs, Multiple Baskets

Having all your business eggs in one basket, in terms of working strictly with residential or commercial, leaves you more vulnerable to volatility. You can’t be static in your business model. Otherwise, you are totally at the mercy of market conditions.

"You need to constantly have your head on a swivel and make adjustments as necessary. When everything shut down for COVID, within two days we were already doing Zoom trainings for our customers, and even occasional Zoom happy hours just to keep the lines of communication open."
– Mike Zumbrun

Mike cites the well-known book on sales, Who Moved My Cheese? “When you go looking for your ‘cheese’ one day and it's gone, which mouse are you? Are you going to sit there and complain about it and starve or are you going to turn right around and go find some new cheese?”

For example, when the pandemic first hit, everyone in the service contracting industry was hurting for a while unless they had repair or service business to sustain them.

But commercial LED lighting upgrades were still moving right along: Mid-Atlantic had tremendous success working with property management companies as a resource for projects retrofitting office space.

“Everyone's working from home, buildings were empty, it was a great time to go in and program fixtures and things like that. So, commercial was huge right out of the gate,” explains Mike. “And then I would say toward the end of 2020 to early 2021, the housing market went nuts and then residential picked up.”

Because his company had their business eggs in both the commercial and residential baskets, Mid-Atlantic Lighting was able to ride out the market volatility during the pandemic.

Find the Right Niche and Keep Adapting

When starting their agency, Mike and his team did a survey of lighting agencies operating in the area. Their market research revealed two ends of the spectrum: small mom-and-pop type operations that only repped one or two brands, or large conglomerates that had 150 lines and 100 employees.

Mike wasn’t a fan of either of those scenarios.

His feeling was that you needed to have a blend of both, because those markets would ebb and flow at different times.

Another great way to adapt your business is to explore those ignored spaces like parking garages where your customers might need better lighting.

Parking Garage Lighting: Opportunities for Safety & Savings

The same goes for their choice to be an independent rep agency.

“From time to time,” says Mike, “We’ll get a comment from another factory saying, ‘Why do you have brand X, Y or Z? We have the same thing.’”

The current situation with supply chain disruptions demonstrates the wisdom of Mid-Atlantic’s independence. When a certain product may be out of stock for four months, if you only rep that one brand, you’ve now lost that sale.

“Now, having two or three of the same item isn’t a choice we would make every day,” explains Mike, “It's hard to support all of these brands. But in this current market, we have to. And the ability to adapt our inventory like that has been key to our resilience.”

Want to win more government LED lighting contracts?


Be a Partner, not a Salesperson

The last two years have validated how Mid-Atlantic approaches sales and the importance of respecting customer relationships. When things started to tighten down due to COVID, the agency started getting emails from some customers saying, "Hey, we're not allowing any reps in."

While Zoom was great as an alternative in the beginning, once you get to four or five Zoom calls a week, everyone gets burned out.

Mike and his sales team started asking customers to meet them at a coffee shop to sit and catch up on things. They even set up a tent in the parking lot and invited some contractors by to showcase products.

However, Mike feels it’s also important to sometimes take product off the table.

Instead, be there to guide the customer in the right direction to win projects. Because, as Mike explains, the most important asset you have is a long-term profitable relationship with your end-user customer: “My customers understand that I value our relationship. And that’s in the forefront of my mind with every conversation I have with them.”

If things go south on the project, you need to get right in the trenches and help work it out. The truth is that without sales reps, many factories wouldn't have customers. Relationships make or break businesses and making yourself valuable to the customer—whether there’s a deal on the table or not—is what builds relationships.

"The customer base that we have, we've built within the past 20 plus years. By staying on a path in your career, you develop a lot of strong relationships and people remember you as someone who has helped them out. That’s priceless."
– Mike Zumbrun

A Shock Absorber for Volatility

Mike’s experience highlights the importance of the business decisions you make. Being thoughtful and adaptable, as he recommends, ensures you go into situations with your eyes open, and have the flexibility to zig when zagging doesn’t work.

Are there aspects of your LED lighting business that need improvement? Our e-book, Profit-Draining Problems that Slow Your Lighting Business Down, can help you identify logjams or weaknesses that could be costing you business. That way you can “be like Mike” and grow your business in any economic condition.

Learn and solve the problems that slow down your lighting business today!