5 Business Lessons AV Installers Can Learn from a Craft Beer Giant

Jul 8

Written by: John Sciacca
7/8/2014 12:53 PM  RssIcon

 
Nearly every custom installer I’ve met also loves a good craft beer. (Shamless plug: Check out my blog dedicated to craft beer reviews!) Beer is almost always part of the tradeshows we attend; either as a booth enticement or afterhours party conversation lubricant. Beer is often a crew pit stop at the end of the workday, either to celebrate or commiserate over a hard install.
 
Regardless of your personal take on Sam Adams beer, Jim Koch’s Boston Beer is now the largest craft beer maker on the market with over $600 million in annual revenue and a 1 percent share of the U.S. beer market. In 1983, Koch left a six-figure job with Boston Consulting Group, took an old family recipe and started a brewing revolution that has made him a billionaire and lasted 30 years.
 
What can we learn from this?
 
Find and Fill a Need
 
Koch described the American beer scene as “basically a wasteland” in the ‘80s, with drinking options limited to American pale lager macrobrews or imports that often lost their flavor due to travel time. Koch says, “There really wasn’t an alternative that was rich, flavorful beer delivered fresh.”* So he made one.
 
The entire custom installation industry basically exists to “fill a need.” People want TVs mounted and audio distributed throughout their home and a simpler way to control devices. They look to technology to make their lives easier and more enjoyable and they look to integrators to make that technology user friendly. As new “needs” arrive, will your company be nimble enough to adapt to be able to fill them? Say moving into networking, or commercial, or security…?
 
Compete on Your Terms
 
When Koch explained to his father that he was going to quit a solid, well-paying job to get into brewing, his dad thought he was crazy. Namely because he would be competing against the mega brewers that were producing millions of barrels of what American beer drinkers seemed to like. As quoted in an interview with Radio Boston, Koch explained to his father, “I’m not going to compete with the big guys. They’re good at what they do. They make fine beer. Just like McDonalds and Burger King and Wendy’s make fine food. I can’t make beer that way, I can’t make beer that cheaply, [but] I can make the gourmet meal instead of fast food.”
 
Like Sam Adams, our products and services are often going to be higher than the big box retailers, but we can compete by providing a gourmet experience and service that provides a “gourmet” alternative that many people will be willing to pay for. We clearly can’t compete on price, but we can dominate on service and experience.
 
Choose the Right People
 
When Koch looked for a Boston Beer founding partner, he didn’t select someone with years of brewery experience or try to hire away a competitor or seek out another industry executive. He hired Rhonda Kallman, a 23-year-old secretary from the consulting company where he worked. "Had I picked one of those high-powered MBAs,” Koch explained, “I would never have gotten the energy, the drive, the creativity that Rhonda brought. She had a different experience set than I did. She knew people, she knew bars, she knew what it was like to be at the bottom of the totem pole."
The company also avoids “desperation hires,” where they hire someone just because a job needs filling rather than waiting for the best person for the job. They want each new employee to “raise the average” for the company and want each new hire to be the best hire rather than just another body.
 
They once waited 18 months to hire an employee for a key role. Now, that employee has been with the company over 15 years. “Was it worth waiting a year and a half to hire somebody who's going to be with you for 15 years and just gets better and better, and you promoted her four times? Absolutely."
 
Finding, hiring, and retaining good people has always been a challenge for our industry. Especially when we need people that are not only highly skilled at what they do, as well as a huge array of other ancillary skills, they must be able to learn and grow and adapt to changing jobs and have people skills to tactfully and professionally deal with our demanding clientele. But the idea of looking beyond the expected and not hiring out of desperation might help us to find our next, best employee. Or it might help us to avoid hiring our next worst one.
 
Audition Before You Offer
 
In most industries, hiring is usually followed by a pretty short routine of filling out an application, sitting down for an interview, maybe calling back for another interview, and then checking up with some references or previous employers. Boston Beer brings people in for a working “audition” where they come in and actually do the job they are being considered for to see if it is a fit for both parties before a formal offer is made.
 
Why not bring in a prospective hire as a “day worker” on a few jobs before making them a serious offer? Nothing shows how someone can handle the job like actually seeing him or her do the job. Do they fit in with your team? How do they work under pressure? Can they take directions or offer anything beneficial? Can they actually do all the things they said they could do? Do they give out maximum effort? At the same time, they might see that your company isn’t right for them, helping to avoid a potentially long-term mistake before it even starts.
 
Sales Fuels Growth
 
"I'm not a big believer in marketing," Koch commented. "Most small businesses succeed without it. We had sales." In fact, the company didn’t hire anyone to handle marketing for its first 10 years. Instead, Koch and Kallman hit the streets, visiting bars with cold beer and cups and just asked people to try it.
 
"[Rhonda] identified with everybody, the bar-back to the owner, and built rapport,” Koch said. “I learned that by watching Rhonda do it. Sales drive, not marketing, was what made Boston Beer Company what it is to this day."
Koch believed in his product, and believed that if people tried it and heard about it, they would want it.
 
How many installation firms do you know with a marketing department or any kind of significant marketing budget? Sure, we have Websites and maybe phonebook ads, a wrapped vehicle or even radio and TV spots, but the vast majority of our business – and the best of our customers – are likely repeat customers or come from word-of-mouth. My business partner, Allen, calls it “adding BBs to the jar.” The more BBs–or customers–we have in our jar, the better off we will be in the long term.
 
Surviving and succeeding in any business can be difficult, and the custom installation industry certainly offers its own unique set of challenges and hurdles to overcome. However success is something that we can all toast, regardless of what beer we’re drinking.

*This blog was heavily inspired by Drake Baer’s Business Insider post, “6 Strategies Billionaire Jim Koch Used to Build Sam Adams."
 
John Sciacca is principal of Custom Theater and Audio in Myrtle Beach, SC.
 
 


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