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End Users Lessons from InfoComm R&S Survey

May 10, 2007 3:44 PM, By John McKeon

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A recent survey of rental and staging specialists by InfoComm International offers some strategic insights into the thinking and operations of these companies—information that may have long-term implications for the corporate clients they serve.

Tom Stimson, CTS, president of The Stimson Group and chair of InfoComm’s Rental and Staging Council, cautions that the survey was not designed to yield vital information for corporate end users of AV. Nevertheless, he notes some findings that end users can interpret to help them guide their own strategies.

“The survey represents a maturing and progressive legitimizing of the R&S industry,” Stimson says. “These companies are becoming more in tune with business best practices and seem to be making moves that will strengthen not only their companies, but the industry in general.”

Among the highlights of the survey:

  • Most respondents anticipate at least a modest increase in their capital spending this year, and “few respondents are forecasting declines in capital expenditures in any category.”
  • The greatest increase in capital spending is expected to be in projection, where nearly 40 percent expect to increase their investments.
  • Although both the smallest and the largest firms reported video as their major category of capital investment for 2007, companies in the middle-size range differed slightly, with more emphasis on audio investments.
  • Among the key challenges facing rental and staging companies are competition from low-cost players in the market, margin erosion, and the need to control rising costs.
  • Respondents generate an average of 62 percent of their rental and staging revenue from equipment, about 31 percent from labor, and about seven percent from all other sources.
  • Last year was a good year for revenue, with about 77 percent reporting an increase in 2006 over 2005.
  • A majority of respondents say they do not conduct drug screening for job candidates. This percentage is higher among larger firms.

“What [end users] can extrapolate is that successful R&S companies have been investing in new equipment and that bodes well for those companies’ future success. As a buyer, I would pay attention to whether my vendor is, one, purchasing new equipment, and two, whether that equipment is appropriate to my needs.”

The emphasis on price as a selection factor for rental and staging firms may also be fading, Stimson believes. “More and more R&S companies are recognizing that profit is more valuable than market share,” he explains. “In short, the buyers’ market of post-9/11 and the economic depression is coming to an end. Price-only shoppers may find themselves stuck with R&S firms with older equipment and less than stellar service.”

Because of increased emphasis on new equipment and profitable operations, Stimson says, “It will become more difficult for customers to dictate terms or pit vendors against one another. Business practices will become more standardized and proposals and pricing more consistent. In order for customers to squeeze out better deals, they will have to commit and be accountable to longer-term commitments instead of one show, one price.”

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