The Pros and Cons of Owning a CI Showroom

Jul 29

Written by: John Sciacca
7/29/2014 11:46 AM  RssIcon


 
 
When I started in this industry—back in 1998 for those keeping score at home—there were basically two types of CI firms: those with a showroom and those without whom we less-than-lovingly referred to as “trunk slammers.”

At the time, our company, Custom Theater and Audio, had a showroom that we were renting—a space next to an interior decorator that we thought created a wonderful synergy as they would undoubtedly send us all of their clients once they finished selling them window treatments and couches and chandeliers. (Never worked out that way. Turned out that in the late ‘90s interior decorators still hated all of our “black box” stuff and the idea of “ruining” their design space with something as horrible as a TV or speaker system was just a slightly better idea than suggesting they go with a camouflage design theme.)

Having had the “luxury” of working out of a showroom for the past 16 years, I often wonder, if we were opening our business now, would investing in a showroom make the most business sense? Or would a more streamlined approach make us more fiscally successful? Here’s a list of pros and cons on having a showroom…

Pros:
 
Business Credibility—There’s no doubt about it, a tangible, physical storefront where people can come and visit any time they feel like it adds a huge amount of credibility by conveying a sense of permanence. The words “brick and mortar” just have a sense of gravitas to them. If you are just working out of your house and decide tomorrow that this whole install thing isn’t working out, it’s pretty easy to just close shop. Take the magnet off the truck, change your phone number and poof! You’re gone. A showroom also suggests that you believe in your business and that it will be around for a while and that you’ve attained a certain amount of success to be able to invest in a showroom. Also, some people are just more comfortable spending money on luxury items with a company that has a storefront.

Demonstrations—The band Rush has a song titled, “Show Don’t Tell,” and that’s exactly what a showroom allows you to do. With a showroom, you have a variety of systems set up and always at the ready for demonstration. Instead of trying to TELL someone about something, a showroom allows you to SHOW them that concept in action. Want to explain exactly how easy a Sonos is to operate? Want to demonstrate how well a housewide HDBaseT HDMI-over-Cat-5 matrix distribution system works? Want to show someone how to tame and control their movie collection with a Kaleidescape? Want to let someone know how powerful an iPad can be when it’s controlling a housewide lighting, security, HVAC, AV system, and more? All of these things are part of the everyday life of having a showroom.

Logistics—Got a big job coming up where you are going to receive a massive shipment of speakers, theater seating and TVs? Have a fleet of vehicles that employees use for service calls? A showroom is a great location to receive shipments and park vehicles. Plus there is a ton of paperwork and files that you will accumulate on clients and projects and billing. Sure, you could have things drop-shipped to a job site and let employees park vehicles at their own homes and set up a large home office, but a storefront just eliminates a lot of variables like some other person signing for a damaged or incorrect shipment.

Meetings—In the course of your business, there are going to be numerous times when you’re going to need a place to have a staff or client meeting. Sure you could pull the Jerry Maguire “crowded restaurant so there won’t be a scene” move, but a showroom with a conference/meeting area is so much more professional.

Close Rate—The showroom is my home field advantage—my sanctum sanctorum. My Thermopylae. I feel if I can get a genuinely interested customer inside the showroom, then I am going to close them. When I get them inside my store, and I’m calling the shots, working the demo, and showing off the high-end room, there is no way I’m going to lose that sale. A showroom gives you a powerful amount of confidence, and it’s far more impressive–and controlled–than just meeting someone on a jobsite.

Cons:
 
Cost—Behind employees and hardware purchases, a showroom will likely be your largest monthly expense. Between rent/mortgage, insurance, electricity, water, trash, phone, internet, etc. having a showroom is a pretty major drain on the bottom line. And the cost is constant, whether you are killing it or struggling to find the next job.

Inventory—Besides having to pay for the showroom, you’ll need a pretty major cash outlay to fill it with gear to demonstrate. Not only is this a cost, but there is the on-going issue of regularly needing to turn over that outdated demo stock. Want to show the latest 4K or curved TV? Great. In six months that model is likely no longer available and/or will see a massive price drop. Want to show off several AV receivers? Fine, but count on them being replaced by new models almost every year. When an in-wall/ceiling speaker line changes, hope that the new models fit your existing cutouts or you’ve got sheetrock repair. I can’t tell you how many *thousands* of dollars we’ve lost on projectors used for demonstration. We had two Runco models that retailed for nearly $17,000 each. One, a CRT, we eventually sold to an employee for $500, the other, a DLP, became so outdated so fast compared to modern units that it would be difficult to even give away and now, so it’s just languishing in a box on a shelf.

Manpower—Having a showroom means paying someone to keep it open during regular business hours. If you want a smart and savvy salesperson, they’re going to want a decent salary/commission. You could hire a low-wage employee that just meets-and-greets and answers phones, but that might cause you to miss out on sales when people come in looking to get some information and be wowed. If the experience they’re getting isn’t better that a Big Box store, why would they bother? Of course, you could run the store yourself, but then you won’t be free to go out and service other projects.

Appearance—First impressions carry a lot of weight and when someone walks into your showroom you want it to be a “Wow!” and not a “What the?” It can be easy to get caught up in all the other things that occupy a custom integrator’s life, but a showroom is a big space that needs regular cleaning and maintenance. Things like dusting the racks and displays and electronics, making sure there are no spider webs (we have this one corner of the store that is a bug corpse graveyard), carpets need regular vacuuming, windows need cleaning, etc. You’re also going to have a guest bathroom that will need to be stocked and kept clean.

Fewer Visits—It used to be that we would meet with every client in our store at some point. Whether it was going over blueprints or demonstrating something or just some actual face time meet-and-greet, a showroom visit was inevitable. Today, however, fewer clients feel the need to actually come into the store. Whether it is because they live out of town or are just too busy or have worked with us in the past or just don’t care, we increasingly deal with people that never come in for a visit. In fact, my mega-install client has never stepped foot into our store despite numerous invitations. People are used to buying “remotely” and are increasingly comfortable without needing to visit a physical location.

Over the past few years the landscape of custom installation has certainly changed, and now there are lots of companies doing great work without needing a showroom to be successful. Further, there are tons of creative options—using your own home’s AV or automation system, making appointments at client’s homes, setting up an office space in a strip mall-type location—that have created multiple shades of grey between owning a showroom and just being “a guy-in-a-truck.”

If you have a showroom, do you love it or hate it? And if you don’t have one, do you wish you did or are you glad you don’t?
 
John Sciacca is principal of Custom Theater and Audio in Myrtle Beach, SC. 
 

Tags: Showrooms
Categories:

3 comment(s) so far...


Gravatar

Re: The Pros and Cons of Owning a CI Showroom

Love your articles.

I have had a showroom for the last 20 years. The lease is up soon and we were throwing the idea around of a warehouse. I decided against it. I love having a showroom for the reasons mentioned in your article. Warehouse is a different animal. We are used to having a showroom and to get away from that now would only disrupt the flow. It's nice to have a space to invite clients to. I never counted but I would say our demos have closed a good portion of our deals over the years. It's fun to have a laboratory to play and experiment with new gear. Most of all, having a space to go to when the world is a bit much and get lost in your favorite movie or music is priceless.

Thanks for your Blog

By Dean on   7/29/2014 3:55 PM
Gravatar

Re: The Pros and Cons of Owning a CI Showroom

I decided to use our 7,700 sq ft home as a showroom. Outfitted with a full blown ELAN g! system. HVAC, lights, motorized window treatments, security, cameras, door locks, home theater, surround sound, multi room AV...it's all there.

Having a luxury home to invite clients over (wine and dine) makes all the difference in the world. It shows a level of success they can relate to and be able to demo the gear they are thinking about for their home as well.

By Joel Berrettini on   7/29/2014 5:18 PM
Gravatar

Re: The Pros and Cons of Owning a CI Showroom

Since 1999 CinemaTech has worked with the best CI across the country so it is with absolute certainty that I can state that a quality showroom is invaluable.

The credibility that a showroom brings, the capability to sell the client what they "want" not what they need is immense. Clients expecting to spend $100,000.00 to $1,000,000.00 on their theater expect a level of sophistication and credibility that a showroom brings.

A quality showroom separates and rates CI in the clients eyes. Question, " do you want to sell a $1.00 item ten thousand times or one item for $10,000.00?"

Think quality showroom and you will be glad you did.

By Michael Murphy on   8/1/2014 3:46 PM

Your name:
Gravatar Preview
Your email:
(Optional) Email used only to show Gravatar.
Your website:
Title:
Comment:
Security Code
CAPTCHA image
Enter the code shown above in the box below
Add Comment   Cancel 

 

Archive
<May 2015>
SunMonTueWedThuFriSat
262728293012
3456789
10111213141516
17181920212223
24252627282930
31123456
Monthly
May 2015 (10)
April 2015 (15)
March 2015 (14)
February 2015 (11)
January 2015 (16)
December 2014 (12)
November 2014 (10)
October 2014 (19)
September 2014 (21)
August 2014 (13)
July 2014 (15)
June 2014 (12)
May 2014 (12)
April 2014 (14)
March 2014 (15)
February 2014 (14)
January 2014 (24)
December 2013 (11)
November 2013 (12)
October 2013 (15)
September 2013 (19)
August 2013 (18)
July 2013 (19)
June 2013 (12)
May 2013 (18)
April 2013 (17)
March 2013 (13)
February 2013 (16)
January 2013 (26)
December 2012 (9)
November 2012 (11)
October 2012 (16)
September 2012 (11)
August 2012 (15)
July 2012 (13)
June 2012 (8)
May 2012 (9)
April 2012 (10)
March 2012 (7)
February 2012 (11)
January 2012 (14)
December 2011 (5)
November 2011 (12)
October 2011 (8)
September 2011 (4)
August 2011 (7)
July 2011 (11)
June 2011 (12)
May 2011 (8)
April 2011 (6)
March 2011 (9)
February 2011 (10)
January 2011 (9)
December 2010 (4)
November 2010 (7)
October 2010 (4)
September 2010 (9)
August 2010 (7)
July 2010 (8)
June 2010 (12)
May 2010 (6)
April 2010 (8)
March 2010 (10)
February 2010 (11)
January 2010 (1)
December 2009 (6)
November 2009 (6)
October 2009 (11)
September 2009 (6)
August 2009 (4)
July 2009 (4)
June 2009 (5)
May 2009 (7)
April 2009 (9)
March 2009 (7)
February 2009 (9)
January 2009 (8)
December 2008 (9)
November 2008 (6)
October 2008 (7)
September 2008 (7)
August 2008 (3)
July 2008 (5)
May 2008 (1)
April 2008 (4)
March 2008 (3)
February 2008 (5)
January 2008 (2)
November 2007 (1)
October 2007 (4)
September 2007 (2)
August 2007 (3)
July 2007 (4)
June 2007 (6)
May 2007 (6)
April 2007 (4)
March 2007 (4)

 

Skip Navigation Links.
Skip Navigation Links.
download

7 Pros and Cons of Adding Commercial AV to Your Business
Read More»
By Heather L. Sidorowicz

Get Your Copy of Dolby's Latest Atmos Demo Disc
Read More»
By John Sciacca

You Need to Be Human in This Digital World
Read More»
By Heather L. Sidorowicz

With New Technology, Best is Always Better Than First
Read More»
By Todd Anthony Puma

Work It! A Running Playlist to Get You Through Your Day
Read More»
By John Sciacca

Slide Show
Slide Show

Audio Video Systems, Plainview, NY
Slide Show

Station Earth, Fergus, Ontario, Canada
Slide Show

Audio Command Systems, Westbury, NY
Slide Show

Evolution Video and Sound, Calgary, Alberta, Canada
Game Review: Shrek Forever After
Read More»
Make Some Bucks In Runescape And Easy Feltching Training
Read More»
Fifa 13 Tricks And Tips
Read More»
World Of Warcraft Guide - Leveling Tips
Read More»
Radamel Falcao Garcia Zarate Jersey
Read More»
Alexis Sanchez Jersey
Read More»
Murray will have an 11am et phone hearing
Read More»
the second seed from Westmount
Read More»
Mission accomplished for the Los Angeles Kings
Read More»
with an eye to looking ahead to some matchups
Read More»