Prepackaged AV Systems
Offering standardized AV systems suited to a variety of applications can help integrators lower costs and improve service.
COST CONTROL is a major issue in any industry. For pro AV, if an integrator can install an AV system at a lower cost than its competitors, it can bring in more orders at higher margins. But with most integrators buying equipment at about the same prices and using the same methods to design and install systems, it can be difficult to gain a significant competitive advantage.
Michael Pope, president of Medina, OH-based AV integrator Audio Video Interiors, hopes to gain an advantage by standardizing most of his system offerings. “When you look at the shrinking margins on products, the only way companies can better themselves is to be more efficient,” Pope says. “Yes, you can increase sales, but you have to increase them exponentially because your margins are dropping. Standardizing allows us to do a better job for the customer, do the work cheaper, and free up our most valuable talent for the truly custom jobs we do.”
Pope has been developing his own prepackaged systems for Audio Video Interiors' residential work, which accounted for about 85 percent of its revenues last year. “We've been trying to give someone a custom solution without having to reinvent the wheel on every job,” he says. “We use a good, better, best model with two to three options, and we're covering the majority of what we normally do. But because I'm freeing up my tech people, it enables us to focus on the high-end custom customers and give them a lot better service.”
On the commercial side, Pope has turned to offering standardized packages from Chesterton, IN-based AV product distributor Starin. The company's Ready2Meet program includes about 70 prepackaged AV systems — each shipped ready to install with all components except cables and connectors. Pope says the packages include detailed CAD drawings, assembly instructions, all control system programming, and end-user documentation. “When I saw Starin's Ready2Meet program, it was exactly what we were trying to accomplish, but for commercial systems,” he says. “From a customer standpoint, it's all custom work. But there's no reason why you can't figure out what the majority of your sales are, design those packages right down to the last nut and bolt, and sell them over and over.”
The learning curve
Pope says he first used the Starin packages in a five-room corporate install last winter. “We installed one multi-purpose room that seats about 100 people, a very plush boardroom, a training room, and two conference rooms — all at the same new facility,” he says. “It was about a quarter-million-dollar job.”
All five rooms include data projectors, control systems, a DVD-R recorder, a VCR, an amplifier, microphones, and speakers. Pope also installed an audioconferencing system in the boardroom and a mobile videoconferencing system that the customer can move from one room to another. A Crestron RoomView system links all five control systems so that the customer's IT department can monitor and support them from their office. All of these components were included in the Ready2Meet packages.
Pope says that while cost was a factor in using prepackaged systems, it wasn't the only consideration. Starin already had all the schematics, complete installation diagrams, and telephone support. “One thing we're conscious about is that there's always a learning curve in our industry, and sometimes it comes at the expense of the customer,” he says. “We've done boardrooms before, but to do a job of that size and have all the rooms tied together was a pretty big undertaking for us. To use these packages was a big relief for my technical department that enabled us to move to the next level without any pain to my customer.”
And Pope says using the packages didn't take his engineering staff completely out of the picture. They still spent about two or three days tweaking the control system to fit the specific needs of the customer. “Ready2Meet enabled me to put in high-quality systems that fit certain parameters without having to invest in more Crestron programmers,” he says. “If I had done that job in house it would have been a big stretch to handle all the programming on top of our normal workload.”
Bill Mullin, sales manager for the distributing arm of Starin, says the Ready2Meet program works because most of the AV systems installed today fall into fairly narrow parameters. “When you sell room after room, how different are they?” he says. “We've built templates from rooms that are repeatedly delivered for training, conferencing, collaboration, and other meeting formats. But that's not to say there are just a few systems. There's a breadth of offerings.”
There's a price premium to cover the cost of Starin's engineering and programming time. “But we amortize our costs over many systems, so the premium is much smaller than what the cost would be for the dealer to do the work himself,” Mullins says. “Depending on the situation, the dealer may pass the savings on to the customer, but in most cases he'll keep it as extra profit.”
Starin began developing Ready2Meet about a year ago, with the first sales coming in October 2004. Mullin says the company currently has about a dozen integrators selling the packages, which range from about $6,000 to $60,000.
Mullin says that while selling these systems requires experience in AV design and installation, integrators don't need special training in the particular packages or equipment Starin uses. “We've taken over most of the work in fitting the correct package to the customer,” he says. “We have a site survey that we ask the integrator to use. It gives us all the details: the type of room, function, and what the end-user has in mind.”
However, Starin does offer training in the information-gathering process needed to determine the appropriate package. “It's really sales training,” Mullin says. “It takes about a half day, or we can do it over the Web.”
The advantages of using these packages include faster turnaround of proposals and finished systems, lower procurement costs, and simplified shipping and warehousing. “We can ship these systems on one pallet, but most often the integrator wants the shipments staged, with rack products and items like the screen, projector mount, and ceiling speakers that need to be integrated into the building's structure shipping first,” Mullin says. “If requested, we can drop ship at no extra charge.”
Pope says his goal this year is to double the commercial side of his company's business. “Having a program like Ready2Meet gives us something solid to focus on and sell,” he says. “It allows me to ramp up salespeople very fast, because the 70-some packages hit probably 90 percent of the needs we see out there.”
Pope says selling prepackaged AV systems also addresses another expensive problem integrators face: designing systems for proposals that ultimately fail. Now Pope's salespeople can do most of the pre-sale engineering simply by choosing residential packages from the company's own design department or selecting commercial packages from Ready2Meet.
“We looked at the utilization of my technical services department and found that a significant amount of time was spent designing systems that we never actually installed,” he says. “Now my technical people are working on actual customers.”
Don Kreski is an independent marketing consultant with more than 25 years of experience in the pro AV industry. He holds an MBA in marketing and finance and can be reached firstname.lastname@example.org.