Synergy + ELA: Merging Toward the Future in the Electrical and Lighting Industries

Q1 saw some significant rep changes in the rep landscape. One of the biggest observations by many was “supply” reps getting heavily involved in lighting. While the trend has been going for a while, many saw this for the first time with FRM expanding with its FRM Lighting & Controls division (and subsequent acquisitions), and the Synergy’s growth and subsequent merger with ELA.

I’ve known Larry Rodger for a number of years and we’ve jointly supported NEMRA via his input for the Rep of the Future study and participation on NEMRA’s Strategic Advisory Council. I recently reached out to him about the changing market, how Synergy (now ELA + Synergy) has grown, his philosophy that has driven this growth and where he sees ELA + Synergy and, more importantly, the manufacturer rep model going in the future.

In Larry’s words …

Synergy … Yesterday, Today and Tomorrow

When I made my first major sale at Jacobson-Rodger Associates in 1992, I could not have anticipated the rapid evolution and consolidation within the electrical and lighting industries that would shape my future business ventures. Fast forward three decades, I’m proud to be president of Synergy Electrical Sales. We’re a dynamic team of more than 120 employees across various focused divisions. The business has seen explosive growth within the last six years, all thanks to, I believe, to our agility and willingness to evolve as rapidly as the world around us.

The Power of Diversification: Merging with Electric Lighting Agencies (ELA)

Our recent merger with Electric Lighting Agencies (ELA) is the latest strategic move in this evolution, and it highlights an industry-wide trend: established rep agencies in the electrical channel are diversifying. In addition to geographic expansion, new market, and category expansion are prevalent too. At Synergy, we’ve historically expanded into various new areas, most notably the architectural lighting and alternative energy spaces. This may seem like a departure from our traditional supply channel, but I view it as a strengthening of our supply division, which remains a central pillar of our go-to-market strategy. We’re representing a broader array of products that our customers, who are distributors, are selling to our mutual contractor customers. As the market changes, we, and other reps, are looking at geographic expansion, new market or category expansion is prevalent too. this is where we referenced the utility, datacom, HVAC markets etc.

When our key customers began migrating north, and new players entered the Philadelphia market, we felt that we needed to follow suit in order to be where our customers were every step of the way. This led to our expansion into Northern New Jersey and the New York Metro marketplace in 2019 – a move primarily driven by our customers’ changing needs and footprints.

Customer-Centric Evolution & Strategic Growth

Beyond customer migration, we’re always assessing industry trends to help guide our strategic decision making. It’s one of the reasons why we’re actively involved in NEMRA and various other industry organizations.

For example, a few years ago, we also started to observe mass industry consolidation at all levels, from manufacturing to distribution to the agency landscape. Our leadership team digested this and recognized that the only way to stay competitive was to keep adding value and diversifying our product portfolio to best serve contractors, distributors, and all of our manufacturers. The more we grow our product basket, services, and expertise, the more opportunity we create for our manufacturers, backed by our strengthened presence and influence in the market.

We knew that this enhanced level of project involvement could be achieved through careful agency consolidation. Fortunately, Synergy has a storied history of acquiring and merging with multi-generational companies. In fact, we’ve integrated with six such agencies over the years. In this way, succession planning has always been something of a strength for us and each business that we’ve joined forces with has brought diverse backgrounds and market segment concentrations to the table.

By observing industry trends, we also noticed early-on that some agencies were struggling with the costly implications of late succession planning. This obstacle restricted their ability to invest in the essential infrastructure and personnel required for growth. In observing this trend, we quickly ensured that our bylaws included requirements that would shield our company from the adverse effects of poor succession planning. This has allowed us to sustain a financially healthy business and aggressively invest in the future.

Strengthening Our Foundation: Investments and Expansion

Our continuous investments have strengthened our foundation, promoting smooth expansion into new markets, trends, and focus areas.

By aligning with NEMRA’s Rep of the Future pillars, we’ve fostered a healthy environment to sustain growth. We’ve hired 49 employees in the past six years while maintaining a high retention rate amidst significant change. Investments in marketing and automation in 2017, alongside a dedicated sales operations team and updated CRM in 2021, have paved the way for faster response times, streamlined processes, and a renewed focus on data-centric decision making.

Consolidation as a Competitive Strategy

Building on this momentum, our recent merger with Electric Lighting Agencies (ELA) represents a significant strategic move for us in the Northern New Jersey and New York marketplaces.

Like Synergy, ELA has a history of multi-generational relationships in their hometown market that will help extend our reach across all business sectors. This merger is not just about geographical expansion; it’s about enhancing our entire product portfolio from New York Metro down to Delaware and creating a more versatile and accessible team. This strategic alignment will bring benefits across both commercial and industrial sectors.

Our plan is to have more products in the basket and a wider range of expertise. Our expanded team of 120 talented, experienced professionals will be more involved, helpful, and accessible for all types of projects and customer types throughout their product need journey.

Importantly, this merger will result in two distinct divisions under one umbrella. The Synergy Electrical Sales brand will continue to serve the supply division for the entire footprint, while the ELA + Synergy brand will cater to the architectural lighting and controls needs of our customers, enhancing service accessibility and concentration across these distinct areas of focus.

Change & Innovation: Our Vision for the Future

Ultimately, ELA + Synergy represents a strategic step into the future, built on the solid foundation of Synergy’s past success. As early as 2016, the combined architectural lighting and electrical wholesale model proved successful in our traditional market of Eastern Pennsylvania, New Jersey, and Delaware. Our involvement on the architectural side of a job gives us early insights into a project, frequently before ground is even broken or a project has a need for traditional electrical materials. This provides a valuable head start for our supply team. This early involvement extends to installation and commissioning, offering the supply team insider knowledge of commercial and industrial activity.

Our leadership team looks at the merger of Synergy and ELA as more than just a union of two companies. It’s a strategic move that benefits our manufacturers in both the architectural lighting and electrical wholesale channel by broadening our product offering and deepening our market influence. This merger is a testament to the power of consolidation, our commitment to early engagement, and customer-centric strategies to drive demand for our suppliers and distributors.

Following the merger with ELA, we’re poised for a future as dynamic as the electrical and lighting industries we serve. Our company is young, energized, and deeply committed to delivering the best possible experience to our customers. This new chapter is marked by strategic evolution and consolidation that reflects a rapidly changing market landscape. Our enhanced leadership team, which now includes ELA’s principals, is aligned and well-positioned not just for present success, but for the next three decades and beyond. Together, we’ll continue our path of strategic integration and expansion to strengthen our market position.

At Synergy, our continued growth will revolve around customer-centric strategies, early engagement, and the power of consolidation, ensuring we stay agile, responsive, and competitive in a changing world. We see change as a chance to innovate. And as we continue to innovate, we hope to shape the future and create a brighter, more efficient company within the industry we love.

Takeaways

Larry keeps a good pulse on the rep market and interacts with a number of leading reps regularly … and, if you look at their linecard, they represent a number of quality manufacturers. He’s forward-thinking.

Some observations:

• They have a strategic plan that focuses on growth, supplier relationships, networking with suppliers for long-term growth, listening / researching the market to experiment on “what’s next” so can be ahead of the curve.
• While the company had plans for its growth, the NEMRA Rep of the Future blueprint helped provide additional insights (which was another value-add that NEMRA brings to its members and Larry credits NEMRA for opening opportunities for him and the company.)
• Investments in marketing pay off
• Investing in technology drives productivity, efficiency and can be monetized to drive profitability
• Being open to acquisitions … and culture matters if acquisition is your growth strategy.
• Lighting is integral to electrical, not something distinct and “foreign.” In fact, rep involvement in lighting can help accelerate other electrical opportunities by providing a manufacturer with earlier visibility into a project … and additional relationships.
  • And speaking of reps that have “supply” and “lighting” divisions, I have a list of about a dozen agencies that have both. Email me if you’d like. Interesting, all have either Signify / Genlyte or Current as their “conglomerate” line (which means the other conglomerate-driven agencies only have visibility to a small percentage of their market’s overall sales … perhaps they are the niche players!). There are also some good agencies that have built decent lighting line cards, primarily consisting of value-engineering lines.

As someone recently said to me, “Reps are no longer two people in a car, they are real businesses.” Synergy epitomizes this. They have a plan for growth, are executing upon it, have a vision for the future, and their success can be a roadmap for others.