Addressing consultants' needs and avoiding competitive practices can help manufacturers increase market share and improve industry relations.
THE PRO AV business isn't just about signal flow, it's also about product flow. The manufacturers build products that go into end-user's installations, and almost always must flow through reps, distributors, consultants, and integrators to get there. Traditionally, pro AV manufacturers market to consultants and integrators, and consultants and integrators then market to end-users. While end-users are the source of income for all AV providers —consultants, integrators, and manufacturers alike — manufacturers mostly deal with and market to the conduit (consultants and integrators) rather than the destination (end-users).
But this has changed over the years, and now there's more direct contact between pro AV manufacturers and end-users. Some embrace end-users because they have divisions that sell products directly to end-users (such as projector manufacturers). Others embrace it because their potential markets or existing installed bases with end-users are so large that they're compelled to build direct relationships with end-users for technical support, if not with sales and marketing.
Although this business chain is well established, there are some challenges involved. To be successful, manufacturers need to understand the market they're selling to, including the context in which their products are used, and how they're selected or rejected. But those that try to work outside the established lines of work responsibilities may be asking for trouble.Who are you selling to?
Manufacturers want their products to be purchased. And for integrators to buy products from manufacturers, integrators need end-users to buy products from them. This is a fairly clear line of product flow, perhaps with a distributor involved in some cases. Although this is where most pro AV manufacturers start thinking about the market they serve, they sometimes fail to understand the place of consultants in this line because they don't directly enter into the product profit chain.
Obviously for design-build projects, manufacturers want integrators to choose their product, and the integrator can either choose or reject it. It may be better, unique, or less expensive than another option, or it may offer a higher profit margin based on MSRP. However, integrators may also choose a particular product because it was specified by a consultant — either as a “sole-source” item or as the basis for design, even if alternatives are allowed.
It's this last reason that many manufacturers have overlooked. Certainly some of the most successful pro AV manufacturers have known this for a long time and have dedicated initiatives and staff to interact with and inform independent consultants separately from integrators. But it can be difficult to quantify. Surveys and studies have tried to quantify consultants' impact on the pro AV market, but results have varied since surveys don't often parse out pure “box sales” from equipment sold with installation services. But for integrated pro AV, the best estimates indicate that about one-fourth of the equipment in the pro AV installation market is specified by independent consultants. Manufacturers that don't recognize this may be missing up to one quarter of their potential market by default.
Yet, like in other businesses, manufacturers must focus on doing their job to make money. As a result, some manufacturers don't get out much. For example, when codec manufacturers started trying to make “installation” codecs in addition to their set-top lines, little effort was made to find out what consultants and integrators really needed and why, and that input was rarely taken into account. It took a long time for the manufacturers to understand the contexts associated with pro AV integration, and some still aren't up to speed. It's important for manufacturers to understand where and how their products are sold and installed, and those that make the effort to reach out will be more likely to succeed. Offering educational opportunities for the engineering and sales staff to learn and see how the overall AV industry really works outside the manufacturing plant can be helpful to the product line as well as the bottom line.Outside the lines
It must be frustrating when manufacturers realize that the integrators they've authorized to sell and install their products in the past may not be qualified to sell their current and future products. This has driven some shake-ups in recent years between manufacturers who have made the leap into networking and DSP technologies and the integrators who sell and install these products, which is a good and necessary thing.
However, in response to this, some manufacturers have offered consulting and integration services that directly compete with their channel partners. Whether driven by the fact that their products weren't being properly installed or just plain market share envy, they chose to work outside the traditional roles in the chain.
Yet, as much of the pro AV industry moves from a hardware industry to a software industry, the links between manufacturers and end-users need to become tighter. The difficult part is that some manufacturers are alienating consultants and resellers in the interim in bypassing their traditional conduits to end-users.