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Management Perspectives: The Shift is On

The home entertainment industry moves to the homebuilder market.

Management Perspectives:
The Shift is On

Aug 1, 2005 12:00 PM,
By Kent Martin

The home entertainment industry moves to the homebuilder market.

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Trust Steps by The Sound Room

As homeowners start to demand more from their homes, contractors must direct their marketing strategies to builders.

Once upon a time, home entertainment stores marketed directly to the homeowner. After all, it only made sense that the person buying the home would be the logical one to approach to sell an entertainment system. Homeowners would visit audio showrooms to pick and choose, Ö la carte, a system that would satisfy their entertainment needs. Sometimes, those needs would take up one entire room.

This is no longer true, however. As homeowners demand more from their homes than the traditional need for shelter, successful audio contractors are quickly adjusting their marketing strategy to target homebuilders. Today, home automation has become a design element as well as a selling tool, and frequently the period of adjustment has meant that audio contractors must undertake a wholesale overhaul of their marketing approach.

It’s a trend even industry organizations such as the Custom Electronic Design & Installation Association (CEDIA) have adopted. Utz Baldwin, chair of the Management Conference Action Team for CEDIA, says the need for change is overwhelming. “Today’s customer is younger, smarter, and very pragmatic in wanting the latest technology for their homes now and down the road,” he says. “By bundling amenities in one package — with the builder and suppliers working together to drive down costs — everyone comes away happy. It just makes sense.”

Management at The Sound Room, a longtime provider of home entertainment systems in St. Louis, recognized this trend and realized it had to adapt quickly or fall behind and risk failure in the highly competitive industry. It meant a top-to-bottom overhaul of its sales and marketing strategy.

“We had to take a long, hard look at how we were operating and how we would need to change to serve a new and emerging customer base,” says David S. Young, president of The Sound Room. “We had never been through this before, so we brought in an adviser who had seen other companies through similar transitions and knew what it would take.” Young says it was also important that the owners and managers were all clear on working toward the same goal. New sales associates had to be recruited and trained to focus on The Sound Room’s design/build customers. Finally, he says, it was necessary to train all of the technicians on the details of the construction process and how this would affect the work they did.

Audio contractors must realize the differences between the retail consumer and the builder as customers, simply because they have different sets of needs and expectations. Young says this meant The Sound Room had to conduct its own fact-finding mission to learn a fundamental difference.

“Because the retail consumer is typically a one- or two-time customer, their needs are different from builders, who have the potential to be long-term, repeat buyers if they feel that your product and service works well for them and serves their customers well,” Young says. “Builders have also secured their own reputation and customer base. They have to be sure that those they subcontract to are able to maintain the standards of quality they have established for their own business.”

To this end, John Cioe, owner of Newport Custom Homes in Scottsdale, Ariz., says contractors must remember to whom they’re marketing. “You must base your proposal on what they want, not on what you want them to buy,” he says. According to Cioe, builders prefer partnerships with contractors because it decreases their exposure in the project. Liability for completion of entertainment systems rests with the contractor, not the builder. But he cautions that this partnership is not created overnight; a “comfort zone” must be developed and nurtured.

Young says The Sound Room recognized this need early in its discovery process. “We know that builders understand the value of the products and services that companies like ours have to offer,” he says. “But we also know that introducing a new subcontractor into their process, with products they may not know much about, often brings fear about what this new addition will mean for his operations. The most important thing that any new subcontractor can do is to assure the builder of your people, your products, and your work, and eliminate that fear.”

Baldwin notes perhaps the toughest part of the process is locating the contractor who fits the builder’s business model and has the resources to meet the builder’s plan. “It must be a real, viable partnership,” Baldwin adds. “It cannot be just a trade of services.”

The Sound Room’s answer to this need was development of what it calls “trust steps.”

“Let’s say we’re working with a new contractor: Ron,” Young explains. “Ron’s first concern is his customer. He wants to know what will happen to his customers when they come into the showroom and how he will know that they came to our store. To eliminate future confusion and make an immediate connection between the builder and customer, the first question we ask is, ‘Are you working with a builder?’ If they say, ‘Yes, in fact I’m working with Ron,’ we promptly contact Ron after the visit so he is aware of the sales process as it unfolds. We establish the working relationship between The Sound Room, Ron, and his customer up front to keep the lines of communication open and ensure satisfaction.”

The Sound Room follows through on this relationship every step of the way, from handling quotes with the builder to performing pre-install walk-throughs to ensure that what is being prepared will work in the space. “Of course, Ron will also be interested in the scheduling and installation process,” Young says. “After the pre-install walk-through, we schedule based on three phases present in most projects: (1) the pre-wire (the rough-in after HVAC, electric, plumbing); (2) the trim out (when the house is “plated” and ready for inspection); and (3) the installation of components. We always request a copy of the project schedule up front so that we can coordinate our work accordingly.”

After its work is finished, The Sound Room finalizes all tasks with the builder as well as the homeowner, who is given an in-home demo to explain how the equipment operates and the details of the warranty. “Only then do we consider the project complete and provide Ron with a job completion sign-off sheet,” says Young.

But adoption of such processes has been slow among builders, according to Cioe. “Builders only want to put it in when the demand is there,” he says. “Few want to put it in as standard business practice.”

Trust Steps by The Sound Room

  1. Immediately make the connection between builder and homeowner.
  2. Know whom to quote and who should receive copies of the quote.
  3. Perform a pre-install walk-through to perfect the design.
  4. Schedule install according to the overall project timeline, and call in advance to confirm.
  5. Complete the install process with an in-home demo and leave behind materials for warranty and service information.

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