CI Premium: 3 Firms That Successfully Sell Service

Some integration firms are finding success in the challenging fight to earn more revenue from services versus products. Learn what they’re doing right.

Before running an integration firm, Brad Peterson was a sales associate at Best Buy in the 1990s and a damn good one.

“I was one of the top selling salespersons in my store,” says the now CEO of Mesa, Ariz.-based Level 3 Audio Visual. He did, however, struggle with one aspect of selling.

There was a board in the back of the store that kept track of each salesperson’s equipment and warranty sales. “I was always in the top three of equipment sales, and always one of the last in selling service contracts.”

Peterson’s bosses didn’t like that. “I’d get in trouble with my managers. But I’d tell them, ‘Look, dude, I’m not going to sell those on every product.’ I’d sell them on a camcorder, which had lots of moving parts that were always breaking, but I wouldn’t sell a warranty on a CRT TV, for instance, that never broke,” he recalls.

Two decades later Peterson finds himself in a similar boat at the helm of an integration firm — and in an industry — that in large part is struggling to figure out the proper approach to earning more revenue from service contracts versus relying on product margin revenue all while delivering maximum value to clients.

The colossal shift from product to service revenue hasn’t been easy for the integration industry, and that’s been well documented. It appears that the needle is finally starting to move. Of integration firms that submitted revenue data for CI’s August 2014 coverage of 50 CI Industry Leaders, 14.6 percent of a typical company’s revenue is reportedly under contract. Six firms say that more than a third of their revenue is locked up.

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