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AV Pros Get Their Bearings

As hard to ignore as a hum in the line, the economy throughout 2009 was an ever present topic in mainstream discourse, as well as in pro AV industry circles. Rightly so. The recession influenced myriad decisions and commanded focus both on a macro, global level and on a local, enterprise level.

Project Management–New Challenges


Catherine Shanahan, president of Shanahan Sound, has begun the process of rehiring and sees 2010 as a year to revamp marketing efforts. "We're doing everything we can to manage our expenses and keep getting the business," she says.

Credit: Susana Raab/Aurora Select

Beyond staffing, the recession is likely to change the way pro AV firms operate going forward. Industry pros say project management is being stressed more than ever, presenting fresh challenges that likely will continue into the future. End-user decision-making will likely continue to be more erratic than it was in the past, and leaner staffs at AV integration firms will, for the foreseeable future, constrain logistics and tax the firms' resources.

"It's been hard to do our own forecasting and it's hard on project management," says Shanahan. "We've had a lot of proposal activity, but clients are not pulling the trigger. Or we put it out there and then they say they have to have the system in 10 days." To further complicate business management, Shanahan says proposals are going through multiple hands for approval. Sometimes they end up on the desks of top management. "When we call to follow up, we get, 'It's on the director's desk.'"

The nature of pro AV work during this recovery is likely to be different than it was before the recession, in large part dictated by the larger economy. In some cases, clients will be anxious to spend money quickly once they have it. In others, they'll be looking to outfit the space they're in rather than building new.

"We're getting more stuff that's just-in-time, rather than longer term design [projects]," says Svard. "We're also getting more retrofit jobs and less new construction."

In any business climate, project management is critical to success, and engaging the customer in the process is key. Landrum says, "It's our job to manage all the variables of the project. Our aim is to help our customers understand the process. We manage and set expectations at the outset."

Tooting Your Own Horn

Setting expectations reaches all the way back to how an AV firm promotes its skills. For many AV companies, the recession proved a wake-up call for reinvigorating their marketing efforts. No business climate is more conducive to targeted and well- thought-out promotion than one in which end-user clients are either stalled or rethinking their AV systems needs. When things get quiet, forward-thinking AV firms pipe up.

Shanahan Sound decided that for 2010, it wants to communicate to the market that it is charging ahead. Seeing a better business climate in the offing, the company wanted to get an edge on its competition through fresh marketing.

"January 1 was a new look for us. We invested in a new logo and design for our trucks, our website, and our other materials," says Shanahan.

Electro-Media Design is also redoubling its marketing efforts, including updating its website and all collateral. It has also taken advantage of the recession to focus its efforts on coordination. "Over the next year, I think our marketing will be evolving more towards partnering and collaborative teaming opportunities," Loether explains. "And [we'll be] deepening our relationships with our existing clients."

Access to Capital–In The Same Boat

Speaking of partnering, nothing better illustrates the interconnectedness of stakeholders in the pro AV industry than issues of financial capital–the money that helps stock inventory and keep vans moving. And the group most caught in the middle of money matters is integration firms.

AV integrators say that at the client level, several things are happening to affect cash flow. While customers are starting to entertain multiple proposals for AV systems, it takes longer than before to commit to a project. Moreover, they won't purchase equipment right away in order to preserve their own credit lines. And when they do finally greenlight a project and sign an order? "Clients are taking longer to pay," says Shanahan. "Ninety days is not unusual, but of course we have to pay all the vendors in 30 days."

At that vendor level, credit is also still tight, which could pose problems as business recovers, clients drag their feet, and dealers need a little leeway in their cash flow. Some say that if a recovery in the pro AV market is to gain steam, a lot will depend on the deals between manufacturers and dealers. Those with the strongest relationships will be seen as partners rather than companies that are simply interested in filling orders.

"Some manufacturers are good. Some are shortsighted and rude–these are the ones I don't need anymore," says Shanahan. "The credit manager at the manufacturer is the key. They need to be able to suss out who the good dealers are."

Therefore AV professionals must pull their weight, too, and spend the extra time understanding manufacturers' businesses and demonstrating their ability to move products, integrate successful AV systems, and maintain happy clients.

Are We Any Wiser?

Overall, the pro AV industry is learning that complacency is the enemy of success, and that market vigilance is more important than ever. It's the lessons learned (see "10 Lessons Learned from the Recession") that can help sustain an AV company the next time the economy sours. "It worries me when others say we could have another dip," Shanahan says. "We're doing everything to manage our expenses and keep getting the business."

A recurring theme of the Great Recession–and a strategy easier vocalized than executed–is the need to remain bold. More than one AV integrator has sworn that when there's an economic downturn, while everyone else is pulling back, their company seizes the opportunity to invest in training, infrastructure, and marketing. "We need to never let up on our marketing activities," Loether says.

"There's no better medicine than to make swift and decisive business decisions when you see the storm clouds on the horizon," says Landrum. "You just don't wait around to make changes. Now the challenge is not to let your guard down or relax too much, but to keep the intensity up and protect profitability at all costs."

All while the AV industry continues undergoing fundamental change. As AV becomes a more business-critical way for clients to work and communicate, AV pros will have to adjust their operations in the limelight, with a target on their collective back. "We haven't yet learned how to sell value and hold out against low-cost producers' competition," warns Landrum, "We have new competition from outside the AV industry. This is a reality that won't change."

Jeanne Stiernberg is a principal consultant with Stiernberg Consulting, a Sherman Oaks, Calif.-based business development consultancy serving the converging entertainment technology, music products, and electronic systems industries worldwide. E-mail her at

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