Knowledge Is Key to Pursuing Vertical Markets

When pursuing business growth in new, unfamiliar markets, independent electrical contractors should understand the needs of that particular market and the various product and service options available to meet those needs. They must know the characteristic challenges each particular market poses to electrical systems operation and use effective tactics and supporting tools to convey that knowledge to prospective customers.

Most independent electrical contractors are engaged in the traditional core markets of residential and commercial buildings, often competing for the same business. However, many electrical contractors are beginning to find excellent opportunities outside of these core markets.

Depending on where the contractor is located, there are specialized market opportunities to consider. For example, oil-producing areas, like Texas and Louisiana, offer excellent opportunities to support oil fields and refineries. There are also manufacturing facilities in the Northeast, Midwest, California, Texas, and North Carolina. And every metropolitan area has at least one water/wastewater treatment facility. These opportunities occur in what are known as vertical markets; markets that have needs specific to their industries. These opportunities may be outside of the typical contractor’s core business, but business growth is possible if the contractor makes the effort to understand the needs that are common in that market and demonstrates the ability to meet them.

When considering expanding into vertical markets, electrical contractors should do three things:

Learn the Market: Find out as much as possible about what that market does, including its unique operational, economic, or regulatory attributes. For example, to avoid or minimize production downtime, many pulp and paper processors use plug-and-play power systems to keep individual equipment and processes running while performing maintenance in another processing area.

Identify the Market’s Challenges: Every vertical market has conditions that affect the quality and reliability of the electrical system. Protecting the customer’s electrical system can mean the difference between consistent operations and long down times caused when, for example, liquid-damaged components are replaced or the system is rebuilt.

Find the Right Product Solutions: Manufacturers, like Thomas & Betts (T&B), have been working with companies in all industries and sectors to identify and solve their unique problems, leading to continual new product additions. Electrical distributors can assist in finding new products that are available to better meet customer needs.


The key to marketing in a specialized industry is understanding its specific challenges. For example, the frequent changeovers, startups, and special batches in chemical processing makes the demand for reliability in the electrical system particularly significant, while the long-term reduction in funding for civil infrastructure has placed exceptional budgetary stress on the construction of roads and bridges.

Deciding which markets to target also should be based on an understanding of current economic conditions. To illustrate, the increasing use of electronic data and communications services has made the electrical density of data centers 15 to 30 times that of other commercial buildings, with operations running continuously 24 hours a day, 365 days a year. These conditions make reliability of the electrical system in a data center critical, as downtime can cost as much as $350,000 an hour, making this a profitable market.

Another example is the rail industry, which is growing in North America, Europe, and Asia due to increasing demands for energy efficiency and environmental sustainability. This provides a potentially lucrative market for contractors who can respond to the industry’s demands for reliability and cost containment.