Can the CI Business Be Fun Again?

Simplifying Your Business and Offering to Adapt to the Realities of Today's Market
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The most common complaint I hear from dealers is, “The business isn’t fun anymore.” And I agree. So let’s do some digging to find out why the fun has left the business for so many dealers–especially those who have been in the business for more than 10 years.

The Business Was Simpler

Think about the systems that you installed a decade or more ago. Now compare them to today. They were arguably simpler, more heavily weighted to performance, and quicker to sell and install.

They were simpler because the backbone of today’s system is a network, which is inherently frustrating to troubleshoot and maintain. Yesterday’s systems skewed toward performance, with the bulk of the budget geared toward higher quality audio and video components. Today, with so many ancillary pieces (networks, lighting, shades, automation, security) vying for a chunk of the budget, far less is left for the “performance” portion of the project. Therefore, today’s systems often suffer from resource constraints that limit the “exciting” part of the project.

And because today’s systems are built on an automation platform, the selling and install process is dragged out, meaning jobs take longer, and dealers are spending more labor on each project–often without being able to charge for the added labor.

Customers Were Less Skeptical

The internet has not been kind to AV salespeople. Customers use the internet–and the limited knowledge they gain from it–as a bargaining tool for pricing concessions, and often, product direction. They’ve become more suspicious of AV proposals and use the information they’ve gleaned online as a cudgel.

Years ago, the AV dealer was the unquestioned expert. No longer.

The Market Was Larger

Today, ultra-high net worth individuals drive the custom AV marketplace. That’s a fraction of the market that was buying AV two decades ago. And because the viable client pool has shrunk while competition has increased, most projects today are part of a bidding war.

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By creating a leaner, more nimble, more profitable organization, you’ll have an operation that’s easier to manage. Just like the old days, when you were having fun

Customers Had Fewer Options

Years ago, clients chose a custom-installed distributed AV system if they wanted music throughout the house. Today they have wireless DIY options that are admittedly lower performance, but “get the job done.” Years ago, clients installed TVs throughout the house. Today, kids are just as likely to watch their computers. Having more options gives a customer more leverage.

So, Can the Business Be Fun Again?

I believe it can, with a qualified “yes.”

You can’t undo the changes mentioned above. It’s the new reality, and there’s no going back. But you can fashion your business to reduce frustration and concentrate on performance.

First, you’ll need to simplify your business and its offerings. Complex and sprawling designs increase variability, and increased variability leads to errors, inefficiency, and reduced profit. It’s easy for me to tell you to simplify your business, but it’s harder in practice. Start by reducing or even eliminating product choices. You probably support only one rack vendor. Try to do the same with your other product lines. Be brutal about this. Don’t justify a product line because it’s “kinda different” from another product you have. It has to be “completely different” to stay in the line. And when choosing the products to keep, choose those with higher performance, even if they cost more. You’d be surprised how easy it is to sell high-performance gear if that’s all you’ve got to sell.

Now reduce the number of disciplines you offer in house, and move those disciplines to subcontractors. I would start with disciplines not associated with performance, like networking. I’m sure there’s a network specialist in your market who does a better job than you do. Subcontract your network projects to them, and mark them up. Now do the same with your lighting design, complex automation, and even prewiring. The more you subcontract, the leaner your organization becomes. This is a form of simplification. And while it’s tough for business owners to shift toward subcontractors, it reduces variability and increases profitability. Keep performance disciplines in house–like AV design–because that’s what makes you special.

Now hyper-focus your marketing to the clients–including architects, builders, and designers–that benefit most from your services. Simplifying your business also means simplifying your marketing, so you can concentrate on (read: “wine and dine”) a small set of influential clients.

You can see what’s going on here: you’re creating a leaner, more nimble, more profitable organization. You may end up with fewer employees. Your overall revenue might actually dip (as your profit margins increase). But in the end, you’ll have an operation that’s easier to manage because you’re selling a pared-down list of products to a small and grateful group of clients. Just like the old days, when you were having fun.

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