The 2015 collapse of national player VIA, including local premier member Engineered Environments, left a gaping hole in the Bay Area market that Audio Visual Design Group (AVDG) stepped into with its residential division.
The company grabbed some of VIA’s clients but more importantly hired some talented people.
“Overall, the closure of VIA is a semi-devastating thing for our industry. It’s sad news to see something that had great ambitions, with what appeared to be a great plan, not succeed. It was a tough thing for everybody,” says AVDG general manager Greg Merriman.
When VIA shut down, it left clients in limbo, not only on their project schedules but some had pretty sizeable investments that still had yet to be recovered (and may never be recovered).
AVDG took over several of those projects, but the circumstances required special attention.
“We’re going into projects that have construction timelines and expectations already in place. The clients are beginning the relationship with a lot of trepidation and suspicion,” Merriman says. “They’re asking a lot of questions that would not be normal on a project.”
“That really has required a lot of extra client management. Sometimes it requires extreme analysis of what we propose. It requires creative ways of invoicing and creative ways of staging equipment. That has led to a lot of extra work on our side, which just takes a lot of extra time and effort. It can be distracting to the core of what we’re trying to do in executing the project. That’s been something to work on,” says Merriman.
The situation led to a new emphasis from AVDG for service contracts. Seeing what happened to VIA, AVDG realizes that recurring monthly revenue (RMR) can be a great stabilizing factor for a custom installation company.
Merriman says selling service contracts is the company’s best opportunity for RMR. (AVDG uses partners for security.)
The service group at the company leads its discussions with clients emphasizing the value of a service contract built around a proprietary remote management system.