Since having children, I often wake up in the middle of night (or can’t even fall asleep) thinking of all of the awful things that can happen and how I can protect them—be it terrible things that you hear about in the news or just the day-to-day issues of being a kid.
When it comes to my business and our industry, there are entirely different issues that can keep me awake at night. I want to share a few examples of these, and offer my strategies for coping with them. I’d love to hear what concerns you and what you’ve done to minimize risks to your companies.
Every time my phone rings and caller ID shows it is an existing customer, I automatically try to think what might be wrong. Usually it is nothing; they want a small upgrade (like AppleTV) or can’t figure out how to turn on the cable box, or the cable company was there and knocked an IR emitter out of place. But sometimes it is something more, and historically it meant a truck roll and service call, which I had to figure out how to schedule ASAP. It kept me up at night, worrying what might go wrong and how to get someone there if there was an urgent issue. Now, with mycrestron.com, Pakedge BakPack, and Furman BlueBOLT, most of my service calls can be handled remotely and often before the client even knows something is wrong. This has definitely helped me sleep better at night.
Making the Sale
While I do consider myself a strong salesman, it is still stressful waiting for that call after you’ve put in countless hours on a site visit and in proposal development. I have learned a few things over the years that have dramatically increased my close rate:
1) Never sell based on what a customer has or what product you want to sell. Instead, sell based on what they need and want. Never let profit margins drive your recommendations or you will eventually get bitten and maybe get a bad reputation. Remember, negativity travels way faster than positive reviews. This is why I stock very little product; I don’t want what I have in inventory to drive my recommendations to my clients. I custom order almost everything except for the tried-and-true products I use day in and day out (see last week’s blog).
2) Keep the customer informed, either via pictures, in-depth descriptions, or actual sample product. Bring a few easy-to-stock items with you when you present the proposal, like a fully programmed remote, an in-wall keypad or touchpanel, a speaker, an AppleTV that you can plug into their TV to show them what it is like, etc. Or, as I’ve said many times before, present the proposal in your own showroom or home or a manufacturer showroom so they can see, touch, and feel the product. Make the experience real for them, and you will close way more deals than you ever thought possible.
3) Be upfront. Make a list of what the customer has already, what you will be repurposing and what you will be adding to their system. Make it a brief state of work so they can see at a glance a bullet-point outline of what they will be getting room by room.
I am constantly concerned that industry margins will regress to the lowest common denominator, like what happened with TVs and computers. I’m starting to see it in whole home audio with Sonos driving margins to 30 percent and lower, telling the dealer to make it up on speaker wire, speakers, DACs, and labor. But what happens when those other product categories begin to lose margin as well? We can’t survive as a business or an industry with margin on the product, unless our labor rates ramp up dramatically. This is the one issue that I am constantly thinking about, because I have less control over the situation. For many years I have sold as much product as possible that is available only through the custom integration channel (protecting me from being price shopped.) And more recently I have been focusing more on home automation to keep margins healthy. With Apple’s HomeKit on the horizon, I’m not sure how long that strategy will last either. Do any of you have any other ways you have tried to maintain your profits in this environment?
No matter how many issues we solve, I will still find something to keep me up at night; it’s just my nature, I guess. Just as no matter how old my kids are or how smart and safe they are, I will still worry about them, no matter what.
+Todd Anthony Puma is president of The Source Home Theater Installation, in New York City.