How I Saved My Business During the Recession
Three veteran integrators candidly discuss their survival tactics, especially how one key category - projectors - brightened sales.
For many custom integrators, it would be an understatement to say they struggled during the recession. Many CE pros disappeared; others now earn half of their previous revenues.
“We all got complacent. When the money was flowing, everybody got comfortable. A lot of dealers forgot a lot of the reasons they got into business and they lost our enthusiasm for the business,” remarks Bill Skaer of Eric Grundelman’s Cool AV in Mesquite, Texas, and one of three Texas integrators brought together by independent rep New Era Marketing for a discussion on projectors with SIM2 CEO Maurizio Cini.
“Tough times like the past few years make you go back to the beginning. After 32 years, we’ve started over, and put our values back in place. We felt like we always delivered most value for the dollar, but at the same time we definitely got comfortable - you can’t do that and be in business for long.”
“I never thought I’d be this age having to work as hard as I do now. At the same time, I don’t know when I’ve had more fun,” adds Skaer. “The past few years have taken a toll on all of us. We’ve needed to adjust not only our business models, but our attitudes as well. We’re not just a one-trick pony doing only home theater; you need to diversify your business, be enthusiastic and deliver real value. If you do all that, you’ll be OK. For those who are not paying attention and not taking care of their customers, they won’t have a good attitude and are likely in danger of losing their business.”
Skaer is one of many integrators who had to take a profound Stuart Smalley-like look in the mirror during the recession. What he saw was a need to get back to the company’s roots … not just in certain products but in customer care and even daily attitude. Skaer is one of three industry veterans who discussed with CE Pro the changes they made in their attitudes, business offerings, staff and debt level.
The group pinpoints one key product category - projectors - that guided them like a beacon of light in tough times and still today.
Now Skaer is excited about his business and the industry as a whole. “I had to change myself before I could get the business back online. You’ve heard it before but its true: ‘Your attitude determines your altitude.’ Your customers sense it.”
The Changing Sale
Tony Militello of SoundImage in Addison, Texas, had a similar experience. SoundImage had as many as 24 employees. Today, after 15 years in business, it has six. For the firm to survive, Militello had to make some prudent business decisions, such as never carrying debt and not spending on a lavish showroom. The company focuses primarily on six-figure installations garnered from referrals, and the crew works out of a 1,400-square-foot office.
“I truly believe you have to be humbled by a situation and take note of what happens, ultimately making a change for the better. For us, smaller and faster works in our territory - there is a ton of competition here, and we’re trying to run a proper business. We pride ourselves on being able to provide value before, during and after the sale. Our customers know they can text us in the middle of the night and we’ll have at least have a response, if not a resolution for them immediately.”
Sheri Griffin of Home Theater Design (HTD) Group in Addison says her business “fell to about half of what it was at our peak. If I was an average owner, we’d likely be out, but I run a debt-free company, and we were easily able to scale to accommodate the reduction in business.”
Among the big changes Griffin has seen is what she calls the “I-want-my-guy” customer. This is a person who wants a single contractor to handle all the technology aspects of the job, including the automation system, A/V, automated shades, etc.
HTD has diversified to “capture more of the sale” by doing more, beyond A/V, such as whole-house solutions like lighting control, Wi-Fi expansion, automation and off-site control.
“We have become a one-stop shop, offering more than we could before. The technology improvements have allowed us to offer more, but also people are embracing more aspects of the pieces beyond A/V, like surveillance cameras. It has become ‘socially acceptable’ to use cameras inside the home for monitoring. The technology has greatly improved, making this aspect of the business easier to capture.”
Indeed, Griffin says one big change the company has made is to make systems simpler … what she calls “one-touch interaction.”
“For years, we always included a universal-style remote control with every job; we wanted it to be easy for our customers to operate. Then we went to automation systems … we almost pushed ourselves backwards. They weren’t one-touch systems; they required a series of commands unlike simplicity of the universal remote. I always say to my customers, ‘My job to make sure you don’t need a PhD in A/V at the end of the day.’ My customers are busy people - they want and deserve to have their system work for them.”
Sheri Griffin of Home Theater Design Group says stylish, colorful projectors from SIM2 have helped her sell more two-piece home theater systems in multipurpose rooms.
She says this simplicity is important because homeowners do not want to be completely dependent on the dealer, even though many integrators want to set up systems that way.
“They want to be able to do simple changes - they want some control - and the new, more-simple solutions have made this possible. We give clients a simple training session and leave them with certain things they can adjust without having to do a service call.”
Part of that business change means Griffin now sells service contracts with off-site system monitoring, primarily using Panamax BlueBOLT. She also offers a full satisfaction guarantee. In 15 years, HTD has only had one customer ever return equipment, and that person was upgraded to another item. Because the company does not have a showroom, it uses existing customers’ homes for demos, or sets up in a local design gallery nearby for charity events.
Jason has covered low-voltage electronics as an editor since 1990. He joined EH Publishing in 2000, and before that served as publisher and editor of Security Sales, a leading magazine for the security industry. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He is currently a member of the CEDIA Education Action Team for Electronic Systems Business. Jason graduated from the University of Southern California. Have a suggestion or a topic you want read more about? Email Jason at [email protected]
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