Doing Nothing Is Not an Option
For many AV companies, business remains good, thanks to a backlog of projects in the pipeline. Still, in these tough times, it’s important to stay proactive by ramping up sales and marketing before the pipeline dries up. Need ideas? AV pros share their strategies.
“My concern is not so much 2009, because most of us are working off a backlog of projects already funded,” says Andrew Musci, president of the National Systems Contractor Association, as well as New York-based ALTEL Systems. “The big concern now is checking in on the architectural and consulting communities. Where is their workload going? If theirs begins to diminish, it will be felt by us a year from now.”
Most professionals in our industry view the current economic liquefaction called a recession as going deeper, growing uglier. Yet there are positive signs for the AV industry, if you know where to look.
The February ISE trade show in Amsterdam had a 12 percent increase in attendees and a 16 percent upswing in exhibitors. Industry leaders such as Chad Gillenwater, vice chairman of AVI-SPL, believe the nature of the AV business, and how AV facilitates communications in these productivity-driven times, could be its savior. And many integrators say 2009 isn’t bad at all.
Tom Stimson, president of The Stimson Group, says he advises companies to forge relationships at every possible level.
Credit: Allison V. Smith
But not everyone is prepared for this year, never mind next. Integrators are either cash-rich and ready to ride this out or credit-heavy and starting to panic. Bids are increasingly awarded to the lowest bidder, and a larger number of integrators vie for a smaller number of projects.
What’s a company to do in these tenuous times? Sometimes, it’s the opposite of what you might think.
Market the Heck Out of You
“This is not the time to go dark. You must be interacting with potential and existing customers. Marketing is not optional–it is essential.” –Randy Lemke, executive director, InfoComm International
In a perfect world, marketing programs are so effective that the company’s reputation is known to the customer before a salesperson ever walks in the door.
“Yet it is a typical knee-jerk reaction during economic slowdowns to pull back investments in marketing,” says Jeanne Stiernberg, principal consultant with Stiernberg Consulting. “But when times are tough, competition is stiffer, so you need to promote more, not less.”
The idea is to spend on marketing now to gain a larger percentage of the market, which stays with you when the recession lifts.
At the same time, it’s important to focus your efforts. It’s tempting during rough economic times to just throw all the darts at the board and see which ones stick. Digital signage? Sure, we can do that. Enterprise security? Sure, why not?
But slow down. “Narrow your focus. Let’s say I am a digital signage company expert in K-12 or house of worship or retail. My understanding of your market is what makes me different, better,” says John Stiernberg, principal consultant with Stiernberg Consulting.
In other words, market your strengths. And if you aren’t sure what they are, “pick up the phone and ask your customers. They’ll tell you,” recommends John Jantsch, author of Duct Tape Marketing: The World’s Most Practical Small Business Marketing Guide. “They know.”
Build Relationships
Relationship marketing isn’t new, but everyone agrees it is crucial in the AV industry. Stamford, Conn.-based research company the Gartner Group writes, “The market’s response to uncertainty is to return to, or rely more heavily on, tested and trusted relationships, providing, of course, that the economics of the relationship remain competitive. Preserving existing clients is often more cost-effective than winning new ones.”
Established relationships are far more likely to get the attention of Scott Walker, president and CEO of Waveguide Consulting in Atlanta. “When the integrator has ignored the consultant market for years then suddenly wants to sell during a two- or three-week bid process, it’s not enough time for the relationship to build,” he says.
“There should be a constant information stream,” Walker continues. “Tell us when you open a new office or a new network operations center. We need consistent communications, so that when a job comes up, we remember who you are.”
Tom Stimson, president of rental and staging company, The Stimson Group, advises companies to forge relationships at every possible level. A staging company may perceive the meeting producer/client as having the strongest bond with one individual at the stager. Yet the client may perceive the relationship to be with the entire staging company. “Rental and staging company managers need to be aware of this so they can reinforce the customer-company relationship,” says Stimson. It’s an opportunity to tighten that relationship.
Another Stimson tip: “Get the customer into your building and prove that you’re as good as your marketing hype. There are some beautiful facilities out there hiding behind mediocre marketing collateral.”
Doing Nothing Is Not an Option
For many AV companies, business remains good, thanks to a backlog of projects in the pipeline. Still, in these tough times, it’s important to stay proactive by ramping up sales and marketing before the pipeline dries up. Need ideas? AV pros share their strategies.
In Other Words, Face Time Impresses the Client
Sell Aggressively
“The best of our integrators are looking at alternative ways to get projects started sooner, or to put things in the pipeline, by offering incentives of doing work in 2009 rather than putting it off a year.” –Chuck Wilson, executive director, NSCA
Today’s salespeople need to be assertive, flexible, and very personal. Jeanne Stiernberg says studies show that when system contractors determine what promotions and initiatives are most effective, most answers involve face-to-face communications.
“Your competitors are having the normal ‘don’t travel/save-on-gas/don’t buy lunch’ reaction to the economy,” says John Stiernberg. “If you spend the money on gas and treat to a $20 lunch instead of a $100, you are doing more than the zero most competitors are doing. It’s very powerful, and it really stands out in times like these. The client says, ‘Wow I appreciate that you are the only one who came to see me.'”
ALTEL Systems sees the end of a project as a good marketing opportunity. Says Andrew Musci, it’s the most critical point for the client. “You need to be most attentive … making sure they are happy.”
Credit: Mat Szwajkos/Aurora Select
Bring your army, too. Take an engineer to a meeting. When the deal is signed, involve the entire company. Introduce the customer to every person with whom they will interact. The customer will feel important and the employees will take a personal interest.
When it come to writing proposals, the usual adage applies: Sell benefits, not features. Demonstrate that you understand their business–that you know what they need in normal times, and what they need right now.
Stimson says his best proposals underscore the customer’s return on investment. John Stiernberg recommends modular and phased implementations to ease short-term spending constraints. And Gillenwater says a recent AVI-SPL presentation that specifically matched their experience with the client’s international requirements sealed a deal.
Change Is Opportunity
“The initial–and natural–reaction to a downturn is to cut near-term costs and drive operational efficiencies. Historically, companies that flourish during a recession focus on strategic cost control while continuing to invest in service capabilities, increasing the customer experience, product innovation, and marketing.” –”Identifying Opportunities for Growth in a Slowing Economy,” a Deloitte white paper
Change in a down economy can start with very practical steps. Perhaps most obviously, look for ways to save money. Companies are using ground delivery instead of overnight, ordering efficiently to combine orders, renegotiating contracts such as leases, and looking for cash discounts and barter deals.
Operational efficiencies pay off, too. “An important tactic for us is doing the work one time, doing it correctly, and not having to go back,” says Thomas M. Gilfoyle, vice president of operations for Ohio-based Copp Systems Integrators.
Minimizing distractions is also important. “It’s easy for salespeople to get focused on the system design and overlook the fact that a customer may not have a budget this year and just wants to get some figures for next year’s budget,” says Brad Nelson, president of System Solutions Northwest in Kennewick, Wash.
Stimson adds you have to watch out for “courtesy quotes that only serve to justify or correct a current supplier’s approach and are not in fact true open bids.”
Other approaches can be less practical. NSCA’s Wilson tells this story: “Someone told me they decided to do all their work at cost until the recession is over. I said he must be the only guy who knows when that will be. What would happen if this went on for two years? You’re better off not doing any work than doing it with that mentality. With that mindset, every bid out there will be like that.”
Doing Nothing Is Not an Option
For many AV companies, business remains good, thanks to a backlog of projects in the pipeline. Still, in these tough times, it’s important to stay proactive by ramping up sales and marketing before the pipeline dries up. Need ideas? AV pros share their strategies.
Create Your Dream Team
“A good team makes all the difference to any company. Team building can at times be a daunting task but it can be achieved with good leadership skills.” –Kashmira Lad, Buzzle.com
A down economy can be an opportune time to strengthen the team. Savvy contractors can take advantage in a number of ways: acquire a respectable yet troubled company; hire a star employee laid off from a competitor; begin cross-training; and start delegating.
Keeping the team strong, though, requires excellent communication. Don’t go silent during rough times; employees become skittish and start looking elsewhere. “Strong leadership communicates to everyone, consistently and confidently, telling it like it is but stressing the positives along the way,” says Lemke.
Wilson adds: “The best story I’ve heard is about a company that has a 10-minute coffee meeting every day. At 8:30 a.m. no matter what, they get together. That’s all it takes.”
Employees are your best sales and marketing conduits. Use them. “In every way, shape, and form that your business comes into contact with your prospects and customers, it is performing a marketing function–good or bad,” explains Jantsch. You must look at all of your customer touchpoints and turn them into positive, brand-building opportunities.”
Those touchpoints may even come in surprising places. ALTEL Systems focuses on the end of the project, an often-overlooked marketing and support opportunity. “When a job is done, there is a sense of let’s get out of here, let’s move on, that is the nature of the business,” says Musci. “But frankly, that is a critical point for the client. It’s the point where you need to be most attentive, training them, and making sure they are happy with what they have. It’s a good time for attention to detail and hand-holding.”
Take the Opportunity to Grow
“Companies that achieve breakthrough performance don’t batten down the hatches during tough times–they look for the opportunities that tough times inevitably bring. If you didn’t go crazy and load up on debt during the good times, you may be in a position to really take advantage of the current downturn.” –Keith McFarland, founder of consulting firm McFarland Strategy Partners, in BusinessWeek
In the Trenches: Modular Installs, More Choices
“I may be a little skeptical in terms of how bad the recession is going to be for our industry, simply because 2008 was our second best year ever,” says Brad Nelson, president of System Solutions Northwest.
“We are maintaining our business model, providing excellent customer service, and building those relationships,” he says. “If a sale isn’t about a relationship, it will be about price alone. We don’t want to be viewed as a commodity–we want to be sure we are viewed as a valuable partner so they will come back to us and, in some cases, without even looking elsewhere.”
Still the company and is finding success by sometimes offering clients more flexible buying options.
“Given the fact that short-term budgets may not be there, we are doing more phased plans rather than executing a large plan all at once,” he says. “Doing it in smaller chunks, we can get them the quality and functionality they need this year, allowing for a growth path for next year and the year after. There is no need to rush in.”
Nelson continues, “Another approach we find valuable is offering two choices for our customers, a gold package and a silver package. Gold is what ultimately fulfills what they could do if budget weren’t an issue. Silver is a step down in terms of capabilities or qualities. We just explain what they are giving up to save the money. This increases the likelihood we get a sale, rather than ‘here is what we are offering, take it or leave it.'”
Matthew Loveland, vice president sales and marketing for South Western Communications in Indiana, says nothing is going to stop Baby boomers from aging, so health care markets can only increase. And Nelson says houses of worship and education still look good. Matt Dlouhy, president of Communications Engineering Co. in Iowa, says, because they work in security and efficiency-saving technologies, the company typically sees increased business during down economies.
Other opportunities to watch: The Gartner Group predicts telepresence will replace more than 2 million airline seats, per year, by 2012. Meanwhile, Gartner expects to see technology spending increase this year in the utility, health care, and government markets.
Many expect state and national legislation to stimulate some AV business segments. But note: stay ahead of the curve. Remain alert to legislation. Know precisely when and how money becomes obtainable. Know before your competition knows, and know before your customers know. You can be the first one in the customer’s door bearing interpretations and suggestions.
Now is also a good time to explore new opportunities. Digital signage companies, for example, are expanding to include content creation. A general AV company may push service contracts.
Expanding, however, must be done carefully. It can’t be an act of desperation. It has to be done with the same reserve it would have taken to enter a new market five years ago. An integrator can best expand using the same business processes, same vendors, with minimal disruption to the organization.
Doing Nothing Is Not an Option
For many AV companies, business remains good, thanks to a backlog of projects in the pipeline. Still, in these tough times, it’s important to stay proactive by ramping up sales and marketing before the pipeline dries up. Need ideas? AV pros share their strategies.
And Then More Marketing
With a plan in place and a clear message, it’s time to market the heck out of your company. Hosting conferences, and conferences with partners, are great tactics. Dlouhy says CEC has success with its own trade show and conference where they introduce new solutions to customers. He says it has resulted in positive ROI and helped establish long-lasting customer relationships.
If you already hold conferences and training, consider increasing frequency and geographical reach. Education is often the best marketing. Leslie Stevens of Eclipse Marketing, which represents many AV companies, says that when competitors go out of business, a lunch-and-learn event can be the quickest way to capture business those integrators left behind.
But most of all, stay positive. “We all talk about how bad the economy is and that’s mentally demoralizing,” Stevens says. “Some spend so long thinking about that they are afraid to do anything.”
South Western Communication’s Loveland adds, “Act as if it were a boom economy. … You get more of the available market share.”
Participants at the February NSCA Leadership Conference probably agree. “It was comforting to get us all together and say, ‘Hey, it isn’t really that bad, is it?’ No, we decided it isn’t,” says Wilson. “People moped into the room, but left very pumped up. It was a positive energy moving forward, even an excitement about the next year.”
Lemke reminds everyone, “Most companies in the AV space are still doing fine. Don’t let the day-to-day talk of gloom and doom distract you from delivering the best service possible.”
Denise Harrison is a freelance writer specializing in professional AV technology.
