Advice for Capitalizing on a Multi-Dwelling Unit Building Revival

After stepping down as president of Niles and launching my own brand, Mike Detmer Business Solutions, I decided to leave San Diego and return to Florida where my wife was attending law school.
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Mike Detmer (mdetmer@mikedetmer.com) is the principal of Detmer Business Solutions, which provides companies in the systems integration space with easy-to-use business knowhow modules that enable functional managers to better execute key duties. After stepping down as president of Niles and launching my own brand, Mike Detmer Business Solutions, I decided to leave San Diego and return to Florida where my wife was attending law school. During that same time #2 son, Tony, decided to go out on his own as well and moved back to Miami where he grew up. Recently Tony called to boast about his new promotion at work and during the conversation commented about how much Miami has changed over the past year. “Dad, you won’t believe it. But the cranes are back and more condos are going up!” he exclaimed.

What, more condos under construction? I’ll bet some Residential Systems readers can earn additional business, I thought. I wondered if the same was true in other markets for MDU (multi dwelling unit) housing. So I called a systems integrator in the greater Chicago area that some call The Condo King, David Welles. David is the proprietor of Tunnel Vision Technology and ever since starting his company in 1999 has made servicing the MDU market a pillar of his business model. David confirmed the uptick in MDU construction activities and when asked, he shared these tips about selling systems into this blossoming market segment:

1. Prepare for all the Selling Opportunities

MDUs typically have three different market segments with each segment posing a unique selling opportunity for systems integrators.

a) One selling opportunity is to accommodate the buildings’ common areas. These amenity spaces may include AV for a theater room, shades for a meeting room, surveillance and video wall for a lobby and sound and TV for gym and pool areas. This is work you do directly for the builder. So be prepared to present solutions that fit his/her needs and complement the ambiance/functionality the architect has in mind.

MDUs typically have three different market segments with each segment posing a unique selling opportunity for systems integrators b) The second selling opportunity is in providing prewiring for the basics like phone and cable. In cases where the MDU is a rental, this may be as far as you go, and you will be billing the builder for the work. In cases where the MDU is sold, this may be the beginning of a more sophisticated system that you install for the new owner post construction. Think through what you may have to accommodate and wire for it. But, in some cases, the prewire cost falls to the systems integrator. So you’ll have to run a ROI (return on investment) model to be sure and recoup your costs. David said a good rule of thumb is to allocate the profits from one or two average jobs to prewiring the entire building, depending on how many units it has.

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c) The third selling opportunity is direct sales to the owner of a unit in the MDU. There are two ways this is done: through the builder where the products and installation costs are bundled into the unit cost and as a post construction installation where the systems integrator works directly with the owner and bills him/her. David prefers the post construction option, which accounts for the bulk of his direct sales business. He told me that direct sales typically pose a better value to the homeowner because they eliminate the double markup for goods and services that occurs when the system is billed through the builder.

2. Present in Style

In most cases, presenting to a builder is done on the spot without the luxury of a showroom or demonstration area. David likes to use a prepared competency presentation presented on his iPad for this purpose. In about five minutes he is able to convey the attributes of his company, the variety of systems he installs and the benefits they provide. During one presentation he was able to convince the builder to install motorized shades throughout the entire project as a selling feature to potential buyers and in the process netted a quarter of a million in profit each for both his firm and the builder’s. “I always remember that I work for the builder,” David told me. “In this case, we installed a million dollars worth of shades and both benefited equally. My presentations to builders are structured with a win-win spirit.”

3. Sell Systems for Clients, Not to Them

While some of David’s competitors offer package or bundle systems, he prefers to offer a more personalized a la carte selection. “Homeowners like to feel that they have choices,” he said. “I tailor my bid to the habits of the homeowners focusing on their needs. Since most people know very little about our industry, I take the time to explain why I recommend what I recommend and demonstrate empathy in the process,” he revealed. Would you expect less from a systems integrator with a degree in psychology? David’s selling style is probably what has built him a continual stream of referrals. He hasn’t made an outbound sales call in years because of it.

4. Nurture Your Builder Relationships

With 14 years under his belt in dealing with builders, David still nurtures his relationships. He makes the builder feel at ease with his work and price structure, sometimes splitting his profits with them. This provides added value to his business through continual business, to the builder through profit sharing, and ultimately to the homeowner that feels they are receiving value in the systems they purchase.

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