AMX Sheds 700 Dealers, Rewards Most Committed Group
As part of its new multi-tiered Bullseye incentive program, AMX dropped some dealers, added tech-support fees for others, and increased services and rebates for the most loyal partners
AMX shed about 700 dealers recently as part of its new Bullseye program.
The program, says CEO Rashid Skaf, “is set up so those dealers that do the most amount of business with us and get the most training, get the most rewards.”
Some integrators buying less than $25,000 per year from AMX were terminated in January. Others were relegated to the “bronze” level of the Bullseye program, in which margins are slimmer and tech support costs $1,200 per year for most dealers.
For “silver” dealers buying $25,000 to $50,000 per year with AMX, nothing changes this year, but in 2011, they’ll lose margin if they don’t make it to the magic $50,000 gold level. At that point, dealers are eligible for rebates and other goodies from AMX such as dedicated support personnel.
Fewer Dealers Mean Bigger Business
While many (former) AMX dealers are understandably miffed, Skaf explains that AMX policies really haven’t changed over the years.
“There’s really nothing different from the last five years,” he says. “It’s just that we’re enforcing it.”
Skaf adds that the company got “a little lazy” in enforcing dealer agreements over the past few years: “I think as the world changed and we kept acquiring companies, we got away from it.”
About eight years ago AMX went through another major housecleaning, eliminating roughly two-thirds of its dealers.
Skaf says revenue increased by about 40 percent as a result of that move, with AMX able to focus on the most educated, most committed dealers.
AMX maintains it’s too expensive to support so many dealers, especially ones that are doing a low volume of business and have minimal training. According to the company, the bottom 16 percent of its dealer base was responsible for 74 percent of AMX tech-support calls.
Today, AMX has a little more than 1,000 dealers, according to Skaf.
Protecting the Brand
AMX is an “aspirational brand,” says Skaf. “People want to be associated with it.”
But if they’re not actually doing much with the brand, then the brand suffers.
“My job is to protect the AMX brand,” says Skaf.
Furthermore, dealers have some limited franchise rights in their area, and AMX expects a little loyalty in return.
Some dealers offer AMX primarily so they can compete on jobs that specify AMX. In those cases, says Skaf, “We become an insurance policy. We don’t want to be an insurance company. We want to be a partner.”
And to really be an AMX partner, i.e., to qualify for rebates, dealers should put at least 30 percent of their AMX purchases into secondary (non-control) products such as switchers, thermostats and Endeleo
Cat 5 A/V distribution systems.
Skaf says AMX has heard complaints from dealers who were dropped from the AMX rosters or those who must now pay for technical support.
“The reality is that the top-level guys are saying, ‘Hey, this is the best we’ve ever had it because AMX is giving us a bunch of rebates, support, dedicated sales staff and other things we didn’t have before.”
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Julie Jacobson is founding editor of CE Pro, the leading media brand for the home-technology channel. She has covered the smart-home industry since 1994, long before there was much of an Internet, let alone an Internet of things. Currently she studies, speaks, writes and rabble-rouses in the areas of home automation, security, networked A/V, wellness-related technology, biophilic design, and the business of home technology. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, and earned an MBA from the University of Texas at Austin. She is a recipient of the annual CTA TechHome Leadership Award, and a CEDIA Fellows honoree. A washed-up Ultimate Frisbee player, Julie currently resides in San Antonio, Texas and sometimes St. Paul, Minn. Follow on Twitter: @juliejacobson Email Julie at firstname.lastname@example.org
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