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Dealers: The Most Profitable Things We Did Last Year

Azione dealers fire deadweight, define metrics, tackle smaller jobs, raise labor rates, change compensation and launch other programs to improve profitability.

Jon Myer of Myer Connex suggests Azione dealers reevaluate labor rates and raise them if warranted.
Julie Jacobson · March 24, 2014

What is the most profitable thing you did last year? That was the question posed to members of the Azione Unlimited dealer network and buying group, whose spring conference was held last week in Las Vegas.

The answers varied from raising labor rates by $20 per hour to adopting new sales software.

Here’s what three of the dealers had to say.

Salez Toolz, Deadweight, Metrics
~ Bill Charney of Advanced Home Audio in Shelton, Ct., says his company “got rid of some deadweight last year.”

He was surprised at “how much impact that made. I realized that you can get complacent.”

~ Also in 2013, AHA upped its sales game by adding a sales person and adopting Salez Toolz, a software program that lets integrators create a basic project while sitting with a customer, without having to build a full-blown proposal.

Salez Toolz helped AHA “stop wasting time on proposals that weren’t going to go anywhere,” Charney says.

~ If that’s not enough, AHA “spent the whole year working on metrics,” according to Charney. “It tells you financially where you are going to be in three months.”

Installers check in via an app and metrics are shared within the company. A giant board on the premises charts progress, which “keeps everyone accountable,” Charney says. “You don’t have to club anyone down. You’re policing yourselves.”

~ Finally, AHA made some “real investment” in services. Most notably, the company took regular installers off of the smaller service jobs and relegated those tasks to less senior technicians.

New Group for Smaller Jobs
Kim Michels, principal of New York City-based Electronic Environments, took Charney’s “service reorganization” to the extreme in 2013, creating a $2 million business on smaller jobs.

The ultimate customer-service guy for the 26 years he’s been in business, Michels realized, “I always said to clients that I want to be there for everything.”

He would rush to a customer’s aid to fix a blinking clock radio, he joked.

Providing that kind of service becomes “kind of intrusive for a company used to doing big projects,” Michels admits. “We even saw our best customer service person not very excited” about those little tasks.

He gave the example of helping the daughter of one of EE’s best clients - something he would never think of declining. For a company used to doing jobs in the high six figures, though, such jobs can be quite burdensome and financially draining.

The answer was to set up a separate department and hire a couple of new techs to handle the “small” jobs, $25,000 and up.

The criteria, says Michels, is not necessarily the dollar value of the job, but how complicated it is. The new service department is expected to complete these projects in 60 days or less, from the original sale to the client instruction.

The move garnered $2 million in revenues for that department, turning services from “negative and burdensome to something that is very profitable,” according to Michels.

He adds, “The guys that do it are thrilled. We have seven people doing $2 million a year.”

Rewarding Efficiency, Raising Labor Rates
Jon Myer, principal of Myer Connex in Gaithersburg, Md., was a little under the weather at the Azione conference, noting, “It’s the first time I’ve actually come to Vegas with a contagious disease.”

He muscled through his presentation, however, sharing a few notable profit-making tips from 2013.

~ Myer Connex worked on labor efficiency last year, starting with one policy that many dealers grapple with: letting techs take their trucks home after work.

He wanted his techs spending less time at the office and more time with clients so the company implemented a compensation scheme that rewards them for “being with clients longer,” Myer says.

~ In a simple change that had Azione dealers buzzing throughout the conference, Myer raised labor rates by $20 per hour and his company is “toying with raising it again.”

He urged dealers to take a look at other skilled trades and to charge rates that your company deserves.

(The dealers at my table in a discussion group later that day embraced the idea, with one of them indicating he would warn customers in advance of the impending change. We discussed how such a move could spur some clients to act now or possibly pay for blocks of time in advance.)

~ Myer Connex wants everyone to know where the company stands with accounts receivable, so the whole company participates in a weekly meeting where A/R is discussed.

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  About the Author

Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at jjacobson@ehpub.com

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  Article Topics

News · Azione · All Topics
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