Q&A with Utz Baldwin, CEDIA
PRO AV sits down with Baldwin, a one-time electronic systems contractor who is now CEO of the Custom Electronic Design and Installation Association (CEDIA), which represents home systems integrators. CEDIA co-sponsors Integrated Systems Europe with InfoComm.
UTZ BALDWIN: Baldwin, a one-time electronic systems contractor, is now CEO of the Custom Electronic Design and Installation Association (CEDIA), which represents home systems integrators. CEDIA co-sponsors Integrated Systems Europe with InfoComm. The group's annual trade show, CEDIA Expo, starts Sept. 9 in Atlanta.
PRO AV: How's business for your members?
Baldwin: It's tough, but there are some interesting things going on. The country as a whole has felt a lot of change, and there's definitely some contraction in the market. It seems most of that contraction has been in middle-market dealers. They're dealers working on new homes from about $500,000 to $1.5 million. But even in that channel many have seized the opportunity and they're experiencing growth.
For the most part, dealers are working just as hard for less money. Consumers are being more pragmatic. They're making wiser choices not just in the products they're purchasing and systems they're installing, but also in who they're working with. They're actually shopping dealers.
PRO AV: How are residential installers dealing?
Baldwin: There's a small portion of dealers who are taking the wrong approach and doing whatever they can to stabilize cash flow by taking low-bid offers, but the costs are the same and our industry requires certain margins to stay in business, let alone be profitable. Companies need to focus on their core offerings and the service they provide, and make sure they're charging for their time.
Diversity is key right now. It's important that companies maximize their revenue at every address. That means more products and services. Look into sustainable solutions and the retrofit market, or perhaps offering security if you didn't before. Do the things that will connect you with that client in more ways. Then take a close look at your business. Look at operations, waste, efficiency. Be as lean as you possibly can.
PRO AV: Are CEDIA installers trying to get more into commercial work?
Baldwin: It would be myopic to think commercial guys only do commercial and residential guys only do residential, especially in today's environment. But [the number of residential integrators working in commercial markets] is on the rise. There's nothing an association can do to stop it, but the association can help support those companies. It's a different set of processes. The only thing that's similar is that there's a project and technology. But the users are different, the intent is different, and the relationships are slightly different.
Still, in other ways, commercial integration is similar to residential. Integrators are trying to be more recognized as design professionals, not just as the AV guy or the low-voltage guy, but as engineers on the design team. But if a resi guy is going to do a boardroom, a house of worship, or a K-12 project without some research, they're setting themselves up to fail and they affect the overall industry. The same goes for commercial guys trying to do what we do.
PRO AV: Has the retrofit market been the savior many were hoping for?
Baldwin: There are a lot more homes in the rearview mirror than ahead of you, and that's going to continue. New home sales will not increase until inventory goes down. But the realtor market is starting to see increased activity in some areas. It's still a buyer's market and consumers are making offers that are just enough so the seller will agree. Hopefully the savings will go into remodeling and electronic systems. The retrofit market may not have saved companies through this downturn, but it's clearly one of the biggest opportunities. So the time is now to build relationships with realtors, educate them on that keypad in the wall, or what that wire is for, and set yourself up to be a resource and a preferred vendor.
PRO AV: How does the future look to you?
Baldwin: With consumers' exponential adoption of these technologies, life is going to be quite a bit different five to10 years from now. We're going to be far more dependent on technology. It's going to be an integrated part of our lives. Our channel is going to explode in the next decade. Those who take the time now to think about what they're going to do when the market does recover are the ones who will have the most success.