The atmosphere inside the lighting store is kind of dark and quiet, despite the ringing phone lines and the handful of busy workers moving about. This likely reflects that the company’s primary business has shifted away from its retail roots toward wholesale over the years. In the back of the building are tall stacks of all sorts of miscellaneous electric materials—another indicator of how the core of the business has shifted.
In the city of Troy, where so much industry has disappeared over the past century, this local business, the Troy Light Company, has thrived through four generations. The Schwebel/Gaies family has run the store on Congress Street through 105 years of dramatic changes in technology, the economy, and in the city of Troy itself. The Troy Light Company’s longevity is even more impressive considering the recent recession, the increased competition from big-box stores such as Lowes and Home Depot, and the advent of Internet commerce.
Dan Gaies, the fourth generation, is the latest son to join the family business. He started working with his father, Mitch Gaies, this September.
The company was founded in 1908 by Mitch’s grandfather, Frank Schwebel, when he was just 20 years old. Mitch explains how it all began: “He was originally a salesman in New York City. . . . He picked Troy because he thought Troy was the prettiest town along the Hudson.” His grandfather kept working the store all the way into his 80s.
“My father [Abe Gaies, Schwebel’s son-in-law] subsequently entered the business in 1951, and stayed with it for 55 years, retiring in 2006 at the age of 86. I came into the business in 1972.” That was also when the store moved to the current location at 85 Congress Street, from number 84 across the street. “We’ve grown from within, with outside salespeople, but always from one location.”
Mitch says that there are many siblings among the four generations who went on to other careers in other places. However, he, his son Frank, and Abe saw something in the Capital Region. “We went to school out of state, but we chose to come back for family and business. . . . Those of us who are here chose to maintain both the continuation of the business as well as our roots in Troy and the Capital District.”
Asked if there are ever disagreements among the family about the business, Mitch says, “Of course, but we ultimately talk though our differences of opinions and the end result is a combination of strategies that is most valuable to our business. . . . In terms of operation, we complement each other well. It was the same with my grandfather and his son-in-law, as well as my father and myself.”
Dan, who worked as a materials engineer for the U.S. Department of Defense in Washington, D.C., for the past 12 years, only recently made the decision to join the family business. “I went away to college and met my wife and we got jobs. . . . It was only about six months ago that we made the decision to come back here, in large part to be closer to family. . . . I think I can use my experience and expertise to help move forward with the business and explore new opportunities, some of which may involve online Internet commerce and some of which may just be doing what we have always done and keeping that going because it has worked and it’s been a good formula so far.”
The Troy Light Company, Mitch says, was always about more than just lighting. “Of course electricity was still in its infancy, so my grandfather sold gas mantels and other related products and slowly developed the electrical part of the business. Lighting was originally a larger aspect of the business; electrical supplies have become a greater part of the business now. Wire, tools, conduit, circuit breakers, electric heat, light bulbs and fixtures, for both commercial and residential use, are some examples of the electrical supplies we sell.”
Despite all the steel, iron, and textile industries leaving Troy over the past century, the Troy Light Company chose to stay put. “Well, there was never really any consideration to go out of the area because this is where our families live and this is where our lifestyle has grown and thrived,” says Mitch. “Yes, there were opportunities to go to other locations within the area, but frankly Troy is where my parents were raised, where I was raised and where my children were raised, we’ve always had an established reputation here.”
He adds, “As Troy’s population decreased and as people have found it more convenient to go outside of inner cities to do their shopping, the retail trade has been affected, and this is one of those examples of whatever the circumstances dictate, we try to be flexible to whatever our course should be.”
The business has weathered a varied economy over the past 105 years. Of recent years Mitch says, “Any business is affected by any change; when the box stores came in we were affected, as a certain amount of retail business went to the box stores.”
The economic slump that began with recession in 2008 has been rough for a lot of small businesses across the country. According to the Bureau of Labor Statistics, 170,000 small (100 employees or less) U.S. businesses went under in 2008 and 2009. But the Troy Light Company benefits from the fact that utility businesses such as lighting and electrical materials are considered “non-cyclical businesses”—meaning that people always need the product or service, regardless of the economy.
Also, their customer-based business strategy hasn’t hurt. “We have always been relatively conservative in our growth expectations; our effort is to try to make sure that we maintain the service level for the customers that we have and not lose what’s made us successful for 105 years,” says Mitch.
Their focus on customers is the right strategy according to Bain and Company, a global management consulting firm whose studies concluded the following: “A customer is four times more likely to defect to a competitor if the problem is service-related than price- or product-related. . . . It costs 6–7 times more to acquire a new customer than retain an existing one. . . . A five percent reduction in the customer defection rate can increase profits by five to 95 percent.”
“No business stays in business by selling to anybody one time; the whole key to establishing a long-term business is to have repeat business and build up a reputation that makes your customers want to keep coming back,” says Mitch.
A White House Office of Consumer Affairs report places similar importance on customer satisfaction: “A dissatisfied customer will tell between 9-15 people about their experience. Around 13 percent of dissatisfied customers tell more than 20 people.”
Mitch speaks to how they compete with larger ‘big box’ stores like Lowes and Home Depot. “Because they are larger and have a much wider range, they can advertise and promote as if their pricing is better; in most cases it’s not. We offset that notion with the service level that we provide, and that has been the basis of our business for 105 years.”
He also stresses the importance of diversity to keep business going strong. “When the recession hit, it certainly was noticeable, but we’ve always found a way to work with whatever the circumstances are, so when the box stores came in we focused more on specialty items and customers who appreciated and took advantage of the service level that we provide.”
Up until recently, the Troy Light Company has been in the same neighborhood as Rensselaer Polytechnic Institute’s Lighting Research Facility. Both the 105-year-old business and the cutting-edge offshoot of RPI seem to believe that the new LED technology (light-emitting diodes) has a fixed place in the future of lighting.
“My experience is that when products first come out, they are very expensive and the technology is in its infancy, it is often more prudent to wait until the technology has improved and the prices become more cost-effective, as is currently the case with LED lamps and lighting,” says Mitch.
Technology is always changing, and one change in the industry that won’t just affect businesses like the Troy Light Company, but also the average person’s home, is a ban on incandescent light bulbs initiated by the Energy Independence and Security Act of 2007. “There’s a slow phaseout of different ones to be replaced by compact fluorescent lighting and now LED lighting is going to become a mainstay,” says Mitch.
Although Dan has been on board only for a few months, he is ready to guide the family business through the inevitable changes that can and do pop up. “I’ve only been here since September,” he says, “and so far it’s been going well, I’m getting a good feel for the business. Certain aspects are different than I may have anticipated, but for the most part it’s about what I expected. It’s not all completely new to me, obviously my father’s been in the business for over 40 years and I had a good idea what I was embarking into.”
For more than a century the Troy Light Company has weathered the times through the diversification of their products and an established trust among retail and contractor consumers, offering an example of how a small business with the right philosphy can trump big corporate logos even when the cards are stacked heavily against them.
“Our philosophy is about providing service, searching out products, odd products, specialty products, things that our competition might not choose to work with a customer on,” says Mitch. “Because if we can do for a customer what somebody else either can’t or won’t then that’s something that a customer will remember, and will appreciate, and that’s what will bring them back.”