CEDIA Integrators Talk Sales Commissions, Millennial Slackers, Service Contracts
Leslie Shiner led CEDIA's marathon "Work Smarter, Not Harder" workshop at ISE 2017, where she and top integrators shared tips on human resources, operations, sales and service.
“Three hours wasn’t enough!” says Ahmed Refai, regional director of business development for Archimedia, a dominant integration firm in Dubai.
Refai and Alex Josling of England-based Seven Integration were panelists and facilitators of the workshop, which was led by long-time industry consultant Leslie Shiner. Refai, whose company employs about 160 people, spoke from the big-business perspective, while Josling (nine employees) spoke for smaller companies.
They, along with Shiner and the attendees, shared several pearls of wisdom with each other in a session in which the “consensus among the attendees was that they could have easily spent the whole day in the classroom,” according to CEDIA education manager Aneta Armova-Levin.
Here are a few nuggets from the session.
Wages are not necessarily a zero-sum game, and do not necessarily have to be paid based on the company’s profitability, says Shiner. For example, “Maybe if you pay someone 10% more, they might work harder.”
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Refai used to pay higher commissions and less base to his salespeople, but he found – at least in his geographic region – that the model was “not as good for loyalty.” Archimedia moved to a model of bonuses – not for individuals but for teams that hit certain benchmarks.
He gives an example of a salesperson working with a client who wants an elaborate home theater, which may not be his strength. “So he passes that job to someone else who is stronger in home theater, and everyone wins.”
Archimedia also rewards employees who work on projects that win CEDIA Awards.
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Shiner suggests companies “always have job ads out there,” even when they’re not necessarily hiring. “When someone good comes along, they could enhance the business.”
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Careful about hiring “experienced industry” folks who promise you a big book of business.
Refai tells of a would-be employee interviewing for a job with Archimedia. The guy is experienced in the industry and tells Refai, “I can bring you all of my clients.”
Refai turns him away because “he would do the same thing with us.” That is, he would take Archimedia’s clients when he left that company.
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Every prospective employee at Archimedia goes through three or four interviews before getting a job. The process is thorough. Even entry-level techs take a simple technical test, but not necessarily to test their existing capabilities.
“It’s OK if they don’t know the answer,” Refai says. “We just want to make sure they don’t give us B.S.”
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Josling holds a company-wide meeting every Friday at the end of the day to go over the week’s activities. The meetings – kept short by the fact that everyone is standing, and they want to get out of there for the weekend – helps keep projects on track, but they serve another important purpose: to provide an ongoing “employee review” process during which strong performers are recognized, underachievers can be counseled, and everyone pretty much knows where they stand.
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There was much discussion about the work ethic of Millennials, with the consensus being that kids these days don’t want to work hard. Several dealers noted some of their best employees come from Romania, Poland, Russia and other foreign lands.
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When incentivizing employees for performance, consider speaking in terms of hours versus dollars, advises Shiner. For example, instead of rewarding a team for completing a project $1,000 under budget, reward them for saving 10 person-hours on the project.
Sales & Referrals
It’s become popular to say, “We get all our business through referrals,” but what does that really mean? Are you actively generating referrals?
Archimedia’s salespeople keep in constant contact with their clients, checking in to see if everything’s working OK. During these check-ins, they also ask for referrals: “Do you know anyone who might need our services at this time?”
At the same time, Archimedia must turn away certain projects at certain times, especially the smaller jobs. In these cases, the company refers the business to local competitors. The lesson: Network with other integrators in the area, offering your services for projects they can’t fulfill. Many high-end integrators won’t take smaller jobs. Make sure you’re first in line for the referral.
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Service contracts are important, not just for the recurring revenue they generate, according Refai.
“Selling maintenance lets your customer know 1) I’m going to be around to make sure this keeps working and 2) There is going to be additional service associated with this system.
A major turning point for custom-installation businesses seems to be at about five employees. At that point, owners need to determine whether or not to expand.
“At five employees, I knew everything going on with all the jobs,” says one company owner. After that, he would need to put new processes in place and hire managers.
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“Some people think the only way to increase profit is to sell more,” Shiner says, “but that’s true only if it’s profitable growth.”
Often, the busier you get, the sloppier you become, and the less-profitable the outcome.
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Where is your business sweet spot? CE Pro and CEDIA analysis shows the most profitable jobs tend to be in the area of $15,000 to $35,000. Even the higher-end integrators in the Work Smarter session nodded when these figures were tossed around.
So, as Shiner pointed out, the big question is: “Do you know and actually seek the jobs that are your sweet spot?”
In many cases … no.
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An integrator with about seven employees asked, “Do I need to hire a project manager?”
The answer from Refai was an emphatic yes: “The project manager is the most important position. It’s more important than sales because if you do that right, you get referrals.”
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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 email@example.com
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