Can You Earn $150/Month per Account for Services Alone? OneVision Says Yes
OneVision Resources develops instant triage, basic support and monitoring service program that it believes is repeatable for all integrators to use. Find out how it works.
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OneVision Company Info
Is the existing business model for custom installation outdated? OneVision Resources in Boston thinks so.
The eight-year-old company has completed a bold transition from being a custom integration firm that physically installs equipment in homes to a service provider that helps the rest of the industry build RMR (recurring monthly revenue) and focus on billable work by offering to manage their service desks.
OneVision is the latest custom integrator to go from being a competitor in the industry to becoming a service provider to the industry. “Following in the footsteps of Stuart Rench of Ihiji, Scott Marchand of Slateplan and Kirk Chisholm of SupplyStream, as former integrators we identified a problem in the industry and now as vendors we’re providing our solution to the rest of the industry at large,” says Joseph Kolchinsky, founder and managing director of OneVision.
Indeed, the company has placed itself at the forefront of a paradigm shift aimed at guiding the entire industry away from its dependence on equipment markups to a service-based RMR business model. The end result being happier customers, improved levels of service, more profit and ultimately higher valuations for custom integration companies when seeking an exit strategy.
Surely, OneVision’s ideas will ruffle some feathers. But as the industry plods along with the same business model developed in the 1980s built on making money from equipment margins, OneVision has been challenging the status quo and is now enabling other integrators to piggyback on its “instant triage” and “proactive monitoring” business model. And the company is not alone — at least one custom installation company, Symbio Lighting + Control in Houston, has inked a deal for OneVision to service its high-end clientele allowing the company to focus on billable work and saving tens of thousands of dollars in man-hours and service costs.
Why Not the Status Quo?
Home technology professionals face continued decrease in margins in virtually every equipment category. Flat-panel TVs, touchpanels, automation systems, multiroom audio systems, motorized shades and other categories that used to carry hefty margins are now sold at minimal mark-ups, while at the same time the total prices have fallen dramatically. CE pros have been forced to maintain the value of their labor to make up for the shortfall. Many integrators work harder than ever before, doing more projects at lower margins to keep pace.
Now here comes the Millennial generation, a group of 80 million just entering their prime spending years who are avid discount-seekers that prefer to be DIYers when it comes to their home technology. The future growth prospects could be bleak for integrators unwilling to change, but for those who are willing to embrace service and RMR the prospects are brighter than ever given society’s increased dependence on technology.
In the meantime, if you broadly break down the phases of a traditional custom installation business — marketing, design/ sales, equipment acquisition, installation, programming, training and service — most integrators are only getting paid for one task: physically installing the equipment, while subsidizing the rest of the process.
“Integrators are investing time without getting paid for it,” says Kolchinsky. “As an industry, we’re investing time in presales and design. Then we engage with the client to properly design and project manage the process. Then we engage in the engineering and documentation of the system. Then we finally get to the point where we’re ordering all the hardware. But there’s so much more hardware involved in a system these days, and everything is so connected and requires so much programming that even simply ordering hardware from a plethora of providers has gotten more difficult. It’s hard to build a sustainable business.
“Then you finally get to install the system,” he continues. “This is the point today where the traditional integrator is making money, but there’s still more labor to be subsidized. Integrators now need to properly program these increasingly complex systems and provide training that requires an increasing amount of hand holding. Then it starts all over again for the next sale.”
The final phase of any project is the expectation of after-install service. This is where Kolchinsky sees the opportunity through instant triage, basic support and proactive monitoring to respond to clients’ needs, without the need to roll a truck. As customers become dependent on having a technology concierge on call, integrators create a secure source of monthly revenue. “Client engagement is the key to making up lost revenue from shrinking equipment margins. I think the industry is maturing and a lot of integrators can likely benefit from the wonderful new, white-label services sprouting up to help generate RMR,” he says.
The Integrator Service Desk
OneVision Resources started back in 2008. For many years, the company specialized in personal technology devices (like smartphones, email/calendar/contacts and computers) and eventually expanded to home technology. As its affluent clientele started building smart homes, OneVision grew into a traditional integrator, while securing “membership” agreements for an average of $2,500/ month (ranging from $500-$10,000/month based on individual family need).
But Kolchinsky discovered that the two groups didn’t scale well together. At the end of 2015, the company stopped doing physical installations, sold its trucks and transferred staff. It’s now a full-service company for other integrators, as well as for its own clientele.
“After learning firsthand what the barriers were, we realized there is a great opportunity and a need in the marketplace. We are uniquely positioned with our deep experience in service, and our technical expertise as integrators, to provide an incredibly high level of support to our fellow integrators and their customers,” sums up Kolchinsky about the transition. “Every integrator is interested in providing a high level of service not just to build RMR but to also live up to client expectations, but it can be costly to build a highly trained, smart home experienced service team that can respond instantly to every client request.”
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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