The Biggest Challenges & Opportunities of 2012
CE Pro 100 dealers discuss how to handle product margin erosion, ramp up staffing to accommodate recent growth and other business challenges.
For the first time in many years, integrators are dealing with growing pains. Most CE Pro 100 companies are growing in 2012, but are wary of adding too much staff too quickly.
Meanwhile, the ugly head of eroding product margins continues to be a thorn in the side of integrators, particularly those with retail showrooms who are battling the Internet.
On the opportunity side, commercial business and the security industry appear to be the most prevalent growth areas.
Here is a sampling of specific challenges and opportunities cited by the CE Pro 100.
Paul Grayczyk, Abt Electronics, No. 4
“Security is a big opportunity. We created a team dedicated to this segment and have hired experts in the field.”
William Graham, Guardian Protection Services, No. 5
“The impact of economic conditions on homeowners. We continue to face downward pricing pressures on our products and services, coupled with increasing competition. A big opportunity for us continues to be the expansion and adoption of interactive services, allowing us to offer more products and services at increased prices.”
Franklin Karp, Audio Video Systems, No. 9
“The introduction of the specifier and RFPs. This a major challenge to our business model and how we have done business for 35 years. The biggest opportunity is that more and more people recognize that they cannot live without some level of integrations and control.”
Jon Robbins, Hifi House, No. 11
“Getting the consumer to understand the difference in what an integrator/retailer does and the services provided versus a big-box retailer that uses subcontractors.
“We need to continue educating the consumer via social networking, in-store events, and other initiatives.”
Neil Greenberg, Audio Interiors, No. 13
“Horrific profit margins on flat-panel TVs, miniscule profit on Apple products and loss of revenue due to declining Crestron sales. Our plan is to operate more like an architectural firm. We will charge for our management and engineering skills.”
Robert Cole, World Wide Stereo, No. 17
“Having to compete with my manufacturers, which includes them selling direct online and also selling their products to folks who will do the same at non-profitable prices driving the whole job down. Also, product reliability, which is partly caused by products being released before their time.”
Dennis Jaques, Maverick Integration, No. 20
“Growth categories continue to be lighting control, motorized shades and drapes, content delivery, wireless technologies, up-selling. Categories to watch include digital health products and services as well as ‘smart window’ technology. Challenges include controlling a sustainable growth.”
Chris Pearson, Service Tech AV, No. 21
“Challenges: People’s expectations of what digital sources and HDMI can really do is our biggest obstacle. Every client gets bombarded from all angles on how awesome new devices are and that they can do everything. Not the case … we became a very conservative company and put strict testing procedures in place prior to offering new products from our manufacturers.
“Opportunities: The overall industry was down, which meant that our competition was not in their proper mindset. We used this to grow and expand our services along with adding staff from our competition. Our teams are not only top notch, but we have more depth than anyone in town.”
Todd DeAngelis, Signals Audio/Video, No. 27
“Our biggest challenges are handling ‘cloud-based customers’ and maintaining our own company file management and organization. The biggest opportunity is selling ‘managed Wi-Fi systems.’ We try to educate the client on the importance of having a stable network for the house and A/V systems.”
Jordan Wills, Cloud9 Smarthome, No. 25
“After a big surge in business in 2011, we are anticipating 30 percent growth in 2012. Our biggest challenge and our No. 1 goal is to maintain our high level of customer service and attention to detail through this growth.” Pictured at left is CEO Fernando Zorrilla.
David Welles, Tunnel Vision Technology, No. 30
“We are expanding our business to three other major markets in other states. We have seen an opportunity to grow our business and we already have been awarded nine jobs in four states. The challenge remains to be able to service these clients as if they are local. We’ve partnered with some other companies to help us achieve same-day response times.”
Robert Haecker, Triphase Technologies, No. 31
“One of the largest opportunities is the fact that more people are spending money these days. (The average consumer is now spending money again.) This is a double-edged sword ... more people are spending money, but the systems seem to be lower dollar amounts. The larger systems seem to be drying up ($500K and up).”
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 to read more about? Email Jason at [email protected]
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