It’s widely accepted that diversifying a company’s client base is good business. For residential custom installers that have already grown their organizations’ offerings to cover the whole home — including AV, security, lighting, and shades — the next natural step may be to expand into the commercial market. After all, how different could it be?
Very, according to those with experience working in both fields. But that doesn’t mean that it’s not a market worth pursuing.
The Dynamics
Southtown Audio Video, based in Hamburg, N.Y., was established in 1984. Originally a residential custom installation business, the firm began expanding into the commercial market under the direction of its current president, Heather Sidorowicz, when she took over from her father. Today, the company’s client base is 100% commercial.
Sidorowicz relays that one of the main rewards of working in the commercial space is that AV firms play a leading role in integrating technology that has a direct impact on an organization’s communication and productivity. “Also,” she says, “you’re not spending Saturday crawling around a crawlspace trying to run a wire.”
That said, while residential projects tend to be “emotional and impulsive,” working with commercial clients “is structured, slow, and procedural,” according to Sidorowicz. There’s more paperwork: compliance documentation, payment terms, purchase orders, and requests for proposal are de rigueur. “Project management becomes critical because multiple stakeholders are involved, and everything must be documented,” she says.
To determine whether a residential custom installation firm is ready to make the jump into commercial work, Sidorowicz encourages CIs to ask themselves the following:
- Do we have enough cash flow to account for slower payment cycles?
- Is our team trained to follow a more stringent project execution process?
- Do we have the right insurance?
- Do we have the right business registrations?
- Do we have the right certifications (such as AVIXA’s CTS, Biamp’s Tesira, or other programming credentials)?
Most importantly, Sidorowicz underlines, CIs need to be honest when they lack experience in a certain area. “When one of our nonprofit clients purchased a church and wanted us to outfit the audio, I let them know we had never done a house of worship job,” she says. The nonprofit asked the firm if they could take on the project anyway. It did and leaned on its manufacturers to assist with system design. “That client is still with us 10 years later.”
The Tech
Steven Rissi began his career while still in high school, installing car audio systems. From there, he moved into residential custom installation. He’s worked at a couple of commercial AV integration firms and has held several positions at CEDIA. Today, he’s the director of training and development at HTSA (Home Technology Specialists of America), headquartered in Chicago, Ill.
While the same physics apply to both residential and commercial technology, Rissi notes that the latter category — especially for integrators deploying conferencing systems — presents new challenges. “For residential, virtually everything we have done historically has been playback,” he says. “If you’re going to move into commercial work — where you’re potentially considering doing conference rooms — the capture side of that becomes very, very important.” In this environment, technicians need to understand pickup patterns, microphone gain structure, and echo cancellation when both capture and playback are happening at the same time.
The same applies to commercial video systems. Rissi concedes that CIs who provide surveillance systems are already familiar with cameras, field of view, and positioning. “But it’s a matter of identifying how you’re going to place the cameras to capture the room, and what the intent of the space is,” he says. For example, camera system design will look different for a conference room versus a lecture hall.
The Clients
Residential customers tend to be starry-eyed about the new tech that’s being deployed in their homes — they’re excited about the prospect of enjoying and showing off these systems. That’s not to say that commercial clients aren’t enthusiastic about the tech they’re procuring. But they’re probably more concerned about what it will enable them to accomplish.
“They’re going to want solutions that make their staff more efficient,” Rissi says. “This means that users need to be able to easily connect, start a meeting, share information, and collaborate. Those types of things tend to be more persuasive than the technical aspects of how something works.”
The Decision-Makers
Founded in 1999, The Premier Group, based in Indianapolis, Ind., began as a residential custom installer. Early on, the company was enlisted by its residential customers for their commercial deployments. “They’re CEOs, they’re business owners, they’re a doctor building a new dentist’s office, and we’ve done their houses,” explains Jason Barth, the firm’s CEO and lead designer. “They had a better experience with us than they had with the trades that were doing their offices, so we got pulled into those projects.”
During the subprime crisis, The Premier Group started pursuing commercial work more proactively. Today, Barth says that commercial projects take up a considerable portion of the firm’s docket.
According to Barth, the commercial market is “drastically different” than residential custom installation. “It’s not even like being in the same business,” he says.
One of the primary differences between the two is how decisions are made. Generally, residential projects involve one or two decision-makers. A commercial client usually has a hierarchy of stakeholders, all of whom have some degree of influence over what the final system will be. While navigating through the gatekeepers is easier when the AV firm has been referred to the customer, it’s more difficult when salespeople are reaching out for the first time. “You’ve got to struggle to get to the decision-maker if you’re cold-calling,” Barth says. “[When] we don’t have that relationship to start with, we’re just like everybody else.”
The Scheduling
Barth observes that project scheduling for residential projects tends to be looser than it is in the commercial market. For example, the drywaller may be delayed on another job, which pushes back the schedule for every other trade on the project in question. “Commercial tends to run on a very rigid schedule,” he says. “There is a site supervisor from the GC on site every day, answering questions and coordinating trades.” This is why it’s important to have a project manager who can communicate with that site supervisor daily.
Working With Commercial Manufacturers
Commercial AV product manufacturers want to know that their integration partners are committed to the space. To demonstrate this, Sidorowicz encourages firms to attend manufacturer training sessions and obtain the relevant certifications. “Show them you can spec, install, and support their product,” she says. She advises starting small and taking advantage of the design support and educational resources that many companies now offer. For CIs who are serious about jumping into the commercial market, she says, InfoComm should be where they start. “Walk the show floor, ask questions, and soak it in.”
Related: Considering Commercial
While working in the commercial space may not be as emotional as serving residential customers, for Sidorowicz it can be very rewarding. “Commercial AV may not get you the same cheers as installing someone’s first surround sound [system],” she says, “but it can build a business that lasts — and doesn’t require weekend calls.”
