Marketing and Sales: The Missing Pieces

AV systems that are technically elegant, adroitly installed, and masterfully commissioned often evoke a single word of appreciation and awe: sweet. Less magical, though no less essential, are the bus 6/04/2008 5:00 AM Eastern

Marketing and Sales: The Missing Pieces

AV systems that are technically elegant, adroitly installed, and masterfully commissioned often evoke a single word of appreciation and awe: sweet. Less magical, though no less essential, are the business underpinnings of sales and marketing.

AV SYSTEMS THAT ARE TECHNICALLY elegant, adroitly installed, and masterfully commissioned often evoke a single word of appreciation and awe: sweet. There's little doubt cool technology drives and inspires the commercial AV systems integration industry. Less magical, though no less essential, are the business underpinnings of sales and marketing. Without sales and marketing, integrators would have a hard time monetizing their and their clients' visions.

Just as technology advances, so too does the business acumen among successful AV integration firms. Yet in many cases, business capabilities trail technical. And if not planned for correctly, sales and marketing can be among the missing pieces of an otherwise successful business.

Few firms would deny that sales and marketing are important to growing their companies. But the gap between what they know and what they do can be telling. So far this year, the NSCA has conducted two Market Intelligence Briefing studies to gauge sales and marketing best practices in the commercial AV industry. In January, it released “Marketing and Promotion in the Commercial Electronic Systems Industry; in April, “Sales Management Trends in the Commercial Electronic Systems Industry.” Both are available in their entirety through the NSCA Web site (, and both are useful reminders to systems integration firms to benchmark their own companies in these two vital business functions.

We've boiled down some of the findings into five key pieces that AV integrators will want to plan for, hone, or augment as they grow and improve their companies. The fact is AV systems integration is still a growing, increasingly competitive marketplace. To move ahead without these pieces puts you at a disadvantage. While the majority of what's discussed here applies to integrators, the NSCA research also includes results for independent technical/design consultants. Download the original reports for more information.

PIECE #1: The Marketing Plan

Systems design and installation doesn't happen on-the-fly or by improvisation, yet often that's the approach integration firms take to marketing and promotion. Findings from the NSCA Market Intelligence Briefings reveal that less than 21 percent of integrators say they have an up-to-date, written marketing plan or a brand positioning statement. Another 20 percent indicate they have nothing more than a budget for promotional activities.

Why would a company not have a marketing plan in an industry built on design and planning? The reasons integrators give for not having a marketing plan range from time constraints to not seeing the value of a plan. Some also offer the “moving target” rationale, arguing that situations change too quickly and thereby limit the value of a written plan.

That said, about half the integrators (48.4 percent) in the NSCA study on marketing and promotion said they have in informal marketing plan (see “Marketing Plans,” below). An informal plan could be anything from ideas sketched out on the back of an envelope to an on-the-fly decision based on someone's idea.

That's not good enough, and many integrators know it: About one-fifth of the informal planners said they see the value of developing marketing plans in the future. And they can learn from the companies that already do so. Of those systems integration firms that do have marketing plans, signs are they consider it a team effort, with the majority indicating the plans are created with input from the sales staff. Why sales? About a third of the integrators indicate that the objectives of the marketing plan are tracked against sales successes.

Of course, a marketing plan isn't worth a whole lot unless a company can put some resources behind it. And that doesn't seem to be happening. A stunning finding of the NSCA studies is that integrators allocate relatively meager budgets to marketing and promotion. As a group, systems integrators said they budgeted an average of just 2.9 percent of their gross revenue for marketing and promotional activities in 2007 (for more, see “Marketing Budget Trends,” page 62).

NSCA's 2007 Financial Analysis of the Industry offers the bigger picture of other expenditures competing with marketing for dollar, not the least of which is training. The good news is, integrators know they need to spend more on marketing, especially in such a competitive industry. Those in the NSCA survey anticipate devoting 3.4 percent of their gross revenues for promotional activities in 2008. While still small, this represents a 31 percent increase year to year.

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Marketing and Sales: The Missing Pieces

AV systems that are technically elegant, adroitly installed, and masterfully commissioned often evoke a single word of appreciation and awe: sweet. Less magical, though no less essential, are the business underpinnings of sales and marketing.

PIECE #2: The Message

When asked about their general marketing message, integrators betray something of a “nice guy” industry at work. Their number one marketing message is simply themselves: who they are and what they can do. But when it comes to positioning themselves against their competition, integrators take the high road. Their least favorite marketing message is to “point out how our company is better than our competitors,” according to the survey.

That's an interesting choice of messaging when you consider those same integrators identified their top competitive threats as other integrators in their area, particularly security-focused contractors (see “Competitive Threats to Commercial AV Integrators,” page 62). As companies not traditionally thought of as AV companies compete for AV work, it may become necessary to hone more of an “AV experts” style of messaging.

Messaging will become increasingly important as AV applications, such as videoconferencing and digital signage, gain more notice from first-time end-users and those outside the AV industry. Competing for attention against a noisy background of mass media is the biggest challenge and a critical objective of marketing promotion. For companies in the AV integration industry, it can be an especially enormous challenge because AV integrators' greatest competition is anything that distracts the potential customer base from wanting, learning about, and budgeting for AV systems. Integrators in the NSCA studies indicate indirect competition from clients' other budgetary priorities, unrelated to AV systems, is a top challenge. Therefore messaging that not only emphasizes your company's capabilities, its expertise relative to other, non-AV focuses contractors, and the benefits of new applications—bene-fits that deserve budgetary priority—are key going forward.

Then it's just a matter of getting that message out into the market. Surprisingly, integrators in NSCA's research found two dissimilar media to be their most successful promotional activities. In terms of actually generating new business, integrators recommend Yellow Pages advertising (very passive marketing) and face-to-face interaction (very active), such as holding customer/ specifier events and making presentations to decision-makers.

Overall, integrators said that in 2007 they put their marketing dollars to work creating or enhancing their company Web site, advertising in the Yellow Pages, conducting training activities, and attending national trade shows.

PIECE #3: The Sales Plan

The majority of firms NSCA surveyed do some sort of formal or informal revenue forecasting. In general, the larger firms are more apt to do revenue forecasting formally and on a regular basis. That said, a surprisingly high proportion (41 percent), mostly the smallest firms, admit that they don't do any revenue forecasting.

It comes as no surprise that among the firms that do revenue forecasting, those people most involved are the owner/president/CEO and executive vice president/vice president. But it can also be a team effort. Just under half of planners involve their sales managers and about a third also involve their individual salespeople (see “Sales Forecasting Tools and Information,” left, for what goes into integrators' revenue forecasts).

For all that, most firms are looking near-term: Almost half the AV integration companies in the study forecast revenue one year into the future; only about 7 percent say they plan ahead multiple years. Interestingly, only about half the integrators surveyed set quotas for their sales staffs, which could make it difficult to estimate the company's ability to execute on any sales plan.

So who executes the plan? How is the salesforce allocated? Survey results show that it varies depending on company size. Among the largest firms, about half of the sales territories are divided by geographic region. When you factor in companies of all sizes, however, the most popular way to allocate a salesforce is by application specialty.

Whether prospective projects are bid or negotiated, proposal generation is an exacting and vital activity in the sales cycle. Overall, about two-thirds of all revenues for systems integrators come from negotiated project sales.

When analyzed by venue type, the NSCA study results show that negotiated sales dominate bid sales in corporate/industrial venues, houses of worship, and health care. K-12 schools and government/municipal venues are split closer to half bid, half negotiated projects. Overall, systems integrators report that they derive about half their income from design/build projects. This proportion goes up as company size goes down, and vice versa. The primary venue markets for design/build projects are houses of worship, corporate/industrial, and government/municipal.

Marketing and Sales: The Missing Pieces

AV systems that are technically elegant, adroitly installed, and masterfully commissioned often evoke a single word of appreciation and awe: sweet. Less magical, though no less essential, are the business underpinnings of sales and marketing.

PIECE #4: Sales Execution

It's easy to think of the sales process as concrete and simple, yet salespeople know it's a multifaceted continuum, calling for diverse skills, that begins with lead generation and ends only after the final payment is received. Systems integrators know that consultative selling is the “M.O.” of their industry. Because of this, sales cycles can be protracted. The NSCA study shows that across all venues, applications, and company sizes, sales cycles average 3.7 months. In fact, it can take as long to make a sale as it can to perform the actual job, once a contract awarded. And a good salesperson is typically involved from sales to the end of commissioning.

The benefits of protracted involvement are many, including relationship building that leads to more repeat sales. As such, the sales and marketing functions of successful AV integration firms are fully integrated. The NSCA research shows that repeat customers/clients account for slightly more than half a systems integrators' business, underscoring the fact that the industry is built on long-term relationships.

For systems integrators, the product they're selling includes both goods and services, typically in a business-to-business channel context. The NSCA Market Intelligence Briefing on Sales Management reminds us that sales is tightly bound to the entire product delivery system (whether for service or goods). The sales function is not only the revenue-generating lifeblood of the company but is also integral to design, installation, and commissioning. Few who call themselves AV systems integrators are just “selling boxes.”

Successful salespeople and departments need to be part of their firm's multifaceted operations, and they need to be technically knowledgeable. In many cases, the salespeople are the ones who sketch initial AV systems designs. As in construction, job estimation is a specialty unto itself; for integrators the sales engineering effort is key to the larger project life cycle. The NSCA research indicates much of a salesforce's time is spent writing proposals. Systems integration firms generate on average of 16 proposals per month and close well over half of them.

The payoff is an engaged salesforce. The NSCA briefing study on sales management includes a 14-attribute salesforce rating scale (see “How Good Is Your Salesforce At ... ?” above). Overall, systems integrators rated their salesforces highest in skills that involve relationship building.

Developing relationships with key customers2.0%11.1%83.2%
Sales planning, including submitting proposals and bid packages2.9%17.6%75.8%
Closing the sale4.5%21.7%70.1%
Developing relationships with key specifiers and influencers9.4%21.7%64.3%
Leading or participating in key customer meetings and sales presentations6.6%25.4%64.3%
Hitting the numbers8.2%26.6%50.8%
Following up with customers when the project is completed13.9%30.3%52.0%
Project management coordination (smooth hand-off to installation and operations)12.7%28.3%54.1%
Ongoing coordination among internal departments14.3%37.3%41.0%
Monitoring business conditions and the competitive environment20.1%36.1%38.9%
Time management (a good balance between in-office activities and face-to-face selling)16.0%37.7%42.2%
Prospecting and generating leads19.3%36.5%38.9%
Sales forecasting20.5%32.0%32.4%
Doing the paperwork24.6%36.9%35.2%

PIECE #5: Customer Support and Service

In general business circles, there is a trend toward retooling customer service as a marketing advantage. It's obvious to anyone who has ever called an airline, a phone company, or an office supply vendor and endured 20 minutes on hold, that customer support colors our perception of the brand.

Many companies in the AV integration world are ahead of the general business world at large, realizing that in a relationship-driven industry, good customer support is a marketing opportunity.

According to the NSCA research, customer support strategies fall into three main areas: Keeping customers informed of the project schedule phases; keeping the sales and marketing staff in contact with the customer during the installation phase of the project; and conducting customer satisfaction surveys or follow-up contacts after the project is completed.

Of note, only 16 percent of survey respondents said they had a dedicated, trained customer service person on staff (13 percent offered 24/7 customer service access).

One reason strong customer service will be important going forward is to handle and manage customer objections in an increasingly competitive market. When asked, for instance, why their company loses a job, two of the top three objections integrators “often” or “sometimes” encounter are prices issues and requests for radical value engineering. (The other principle reason integrators lose jobs is simply because a competitor gets the contract, a situation addressed in the sales cycle, but also through good relationship building.)

According to the research, clients rarely back out of a project with no explanation. Therefore good customer service and sales, and the ability to read a customer and understand their concerns, are important. Clients will tell you their problems: You need to listen.

Jeanne Stiernberg is a principal consultant with Stiernberg Consulting, a Sherman Oaks, Calif.–based business development firm ( You can reach her at Stiernberg Consulting works with the NSCA on the Market Intelligence Briefings.

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