When I lived in Minnesota a group of 10 or 12 industry folks – distributors, dealers, manufacturers, reps and me – would get together every month for a few hours to discuss industry stuff. The conversations were always open, cordial and productive, even with competitors in the room, sharing their business “secrets.”
I always wondered why this type of dialog wasn’t happening everywhere. Sure, dealers share business practices and principles with competitors at conferences and in roundtables, but typically they don’t discuss micro-level details with dealers down the street.
What if they did? What good might come of it? I can imagine a lot of interesting outcomes. Perhaps you could share trucks and tools. Maybe you could split some warehouse space or a showroom. Might you all pitch in for some local advertising? At the very least, you could refer qualified cohorts for jobs you don’t want or can’t handle.
Crazy talk? Look at car-rental companies. They share passenger vans, parking lots, rental facilities, signage and often personnel when business is overly brisk … or particularly slow. They simply choose to compete against each other in other ways than airport logistics, teaming up against those off-site rental companies and their discount pricing.
Efficiency Matter More than Ever
I believe there’s more reason today than ever to collaborate with like-minded pros in the community. When there was just higher-end A/V and home control, and none of this mass-market business, the typical integration job was $20,000 and up (way up!), with little competition from other products and service providers. A few inefficiencies here and there wouldn’t break the bank for a lower-volume business.
Today, however, home-tech integrators are taking on smaller jobs – and more of them – and they’re competing against forces that barely existed five years ago (including a “good-enough” mentality among consumers and home builders).
Now, home-tech dealers must squeeze every efficiency out of every single job to compete against the interlopers and remain profitable. A quick Radio Shack run for a few connectors, or a drive-by to reboot a customer’s router, is no longer just “the cost of doing business.” These little profit suckers add up.
I’m not quite sure what types of opportunities for collaboration might emerge when local competitors communicate, but the one thing I keep coming back to is a simple forum where dealers can trade labor and products on any given day for whatever price they agree on.
For example: I have a client in XYZ neighborhood that’s 20 miles away. They need to replace a Sonos speaker, and we’re not going to be in the area for a few days. Is anyone around who could deliver a unit and enroll it onto the network?
Or this: We need some Cat 6 cable ASAP. Anyone in the area who could spare a spool?
Integrators could share expensive calibration and construction tools. They could offload inventory. They could offer up some under-utilized trim-out techs on-the-fly. They could make bulk purchases on popular products and store them in a shared warehouse.
And this no-brainer: Our client wants to outfit their offices with access controls, and we don’t do that. Is anyone qualified to do that type of work?
Integrators like Chris Smith of Cloud9 Smart in New York City have benefitted handsomely from openly communicating with local cohorts.
“I made a commitment in 2019 to reach out to competitors I hadn’t spoken to in a while,” he says in a blog post. “I also cold-called various competitors where I had no relationships. In 60 days I met eight competitors and they handed me two commercial projects, a big residential job and one potential hire. The projects represented $400k to $500k worth of work! In each case the referrers recognized that we had a better skill-set to complete the work.”
Smith says he starts with an acknowledgement of “just how much business is out there.” Collaborating with sometimes-competitors allows Cloud9 to “pass on business that isn’t the ideal fit for my process and team … and make room for the right projects by not tying up our available capacity.”