Marketing and Sales: The Missing Pieces
AV systems that are technically elegant, adroitly installed, and masterfully commissioned often evoke a single word of appreciation and awe: sweet. Less magical, though no less essential, are the business underpinnings of sales and marketing.
When asked about their general marketing message, integrators betray something of a “nice guy” industry at work. Their number one marketing message is simply themselves: who they are and what they can do. But when it comes to positioning themselves against their competition, integrators take the high road. Their least favorite marketing message is to “point out how our company is better than our competitors,” according to the survey.
That's an interesting choice of messaging when you consider those same integrators identified their top competitive threats as other integrators in their area, particularly security-focused contractors (see “Competitive Threats to Commercial AV Integrators,” page 62). As companies not traditionally thought of as AV companies compete for AV work, it may become necessary to hone more of an “AV experts” style of messaging.
Messaging will become increasingly important as AV applications, such as videoconferencing and digital signage, gain more notice from first-time end-users and those outside the AV industry. Competing for attention against a noisy background of mass media is the biggest challenge and a critical objective of marketing promotion. For companies in the AV integration industry, it can be an especially enormous challenge because AV integrators' greatest competition is anything that distracts the potential customer base from wanting, learning about, and budgeting for AV systems. Integrators in the NSCA studies indicate indirect competition from clients' other budgetary priorities, unrelated to AV systems, is a top challenge. Therefore messaging that not only emphasizes your company's capabilities, its expertise relative to other, non-AV focuses contractors, and the benefits of new applications—bene-fits that deserve budgetary priority—are key going forward.
Then it's just a matter of getting that message out into the market. Surprisingly, integrators in NSCA's research found two dissimilar media to be their most successful promotional activities. In terms of actually generating new business, integrators recommend Yellow Pages advertising (very passive marketing) and face-to-face interaction (very active), such as holding customer/ specifier events and making presentations to decision-makers.
Overall, integrators said that in 2007 they put their marketing dollars to work creating or enhancing their company Web site, advertising in the Yellow Pages, conducting training activities, and attending national trade shows.PIECE #3: The Sales Plan
The majority of firms NSCA surveyed do some sort of formal or informal revenue forecasting. In general, the larger firms are more apt to do revenue forecasting formally and on a regular basis. That said, a surprisingly high proportion (41 percent), mostly the smallest firms, admit that they don't do any revenue forecasting.
It comes as no surprise that among the firms that do revenue forecasting, those people most involved are the owner/president/CEO and executive vice president/vice president. But it can also be a team effort. Just under half of planners involve their sales managers and about a third also involve their individual salespeople (see “Sales Forecasting Tools and Information,” left, for what goes into integrators' revenue forecasts).
For all that, most firms are looking near-term: Almost half the AV integration companies in the study forecast revenue one year into the future; only about 7 percent say they plan ahead multiple years. Interestingly, only about half the integrators surveyed set quotas for their sales staffs, which could make it difficult to estimate the company's ability to execute on any sales plan.
So who executes the plan? How is the salesforce allocated? Survey results show that it varies depending on company size. Among the largest firms, about half of the sales territories are divided by geographic region. When you factor in companies of all sizes, however, the most popular way to allocate a salesforce is by application specialty.
Whether prospective projects are bid or negotiated, proposal generation is an exacting and vital activity in the sales cycle. Overall, about two-thirds of all revenues for systems integrators come from negotiated project sales.
When analyzed by venue type, the NSCA study results show that negotiated sales dominate bid sales in corporate/industrial venues, houses of worship, and health care. K-12 schools and government/municipal venues are split closer to half bid, half negotiated projects. Overall, systems integrators report that they derive about half their income from design/build projects. This proportion goes up as company size goes down, and vice versa. The primary venue markets for design/build projects are houses of worship, corporate/industrial, and government/municipal.