As regular readers know, I tend to write about things that get under my skin. These are things that, in my mind, beg for exploration and clarification. This is one such topic. What originally brought on this need to explore and clarify was while at the biggest trade event in commercial AV — InfoComm. Each year, in preparation for the show, I like to peruse the website and see all the exhibitors.
AVIXA posts the names, booth numbers and, most importantly, descriptions of the exhibitors. Of special interest to me are the product categories that are represented. These provide insights into trends, old and new companies, and the degree of exposure that a given category has. In a very real sense, this tells us where the industry is headed — at the very least, as far as the manufacturers that exhibit are concerned. Trust me: If you value time management and productivity, this is one of the best ways to start your preparation for the show.
What Really Caught My Eye
As you probably know, I am a “display person.” So, what really caught my eye this year — and the catalyst for this article — was the number of companies exhibiting in the direct-view LED (DVLED) category. When I counted them, there were more than 70! Just think about that for a moment.
A couple of years ago, InfoComm had less than half that number. When any product category is hugely populated, it invites the question of whether that fact indicates abundant market demand, an oversupply of manufacturers or some combination of both. What I can say is this: The sheer number of vendors in several categories — but especially DVLED — is overwhelming. It’s perhaps even a little intimidating. It makes even a seasoned industry professional wonder how to approach and evaluate the plethora of choices in a well-populated category, as well as which one to ultimately select as a vendor partner.
At first glance, the quick and easy answer is to select the vendor partner that has “the best technology.” Well, I’m sorry to bust your bubble, folks, but, in my research and tracking of AV manufacturers, including more than 100 display companies, I’ve drawn this conclusion: Most of the major suppliers manufacture comparable products. They might call things by different names, but, in terms of overall quality, the products themselves are similar. At this point, there is not a single major disruptive technology or manufacturer, display or otherwise, that is head and shoulders above the rest. (I won’t go off on a technical rant, but let’s use DVLED as a prime example. If all else is equal, a good 1.5mm-pixel-pitch display is a good 1.5 mm-pixel-pitch display.)
Ah! But here is where we get to the point: my “if all else is equal” caveat. Without fear of contradicting myself, I will declare this: All else is rarely equal. And, although the DVLED category caught my eye, the following lessons apply to most of the technologies in our toolboxes. Permit me to explain how to navigate the uncharted waters of differentiation. This information should help to empower you as a commercial integration business owner or operator.
A Bit of History
We’ll start with a bit of history, which will lead us to where we are today relative to products and whom we select as vendor partners. Prior to the turn of the century, our products were traditionally categorized as good, better and best. With respect to automobiles, Chevrolet, Buick and Cadillac existed as good, better and best, respectively. Suffice it to say that there were clear differentiators. Fast forward to 2023 and this distinction, for the most part, has gone away. We have evolved — or devolved, some might say — to a world of parity and commoditization. A commodity is a good that is supplied without qualitative differentiation. The technical term is fungibility. This refers to a product being interchangeable with other products of the same type.
Products possessing the property of interchangeability “simplify” the exchange/trade process, as they work on the underlying assumption that everyone values all goods of that class as the same. Many goods that formerly carried premium margins for market participants have become commodities. Goods that fit that description include silicon chips, laptop computers and, for the AV industry, displays.
Keeping things honest, if you look at the top four or five competitors in almost any technical category — and if you set aside marketing jargon — they appear quite similar. For example, a 55-inch 4K flatpanel has become a commodity. Especially among the “biggies,” they all look great. There is differentiation to separate consumer or commercial versions, but, even there, the lines are blurred. In your heart (and, hopefully, your head), you know I’m right.
This is not to say that products are not important. In fact, the product is at the top of the list of what might be called “the business order of things.” By this light, the “proper order” is Product, Marketing, Sales, Support and Operations. A great product is the proverbial price of entry, but, when the products in the marketplace are at parity, it does not and cannot end there. The 5P Analysis for Vendor Selection is a set of evaluation tools to help you make buying/selling decisions that are correct for you.
Exploring Each of the 5Ps
The 5Ps are as follows:
Product: A product with robust features and benefits is a given. But, as noted previously, due to commoditization, the product itself is seldom a true differentiator or a key reason to buy from a particular vendor partner. There are many solid and comparable products from which to select.
Price: Prices fluctuate and seek their own levels. There is parity here, as well. Price can be a temporary deciding factor, but it will not outweigh other factors.
Program: Much as with pricing, programs quickly resort to a position of parity. What one company does, another one will mimic. Examples are freight, return policy, warranty length, etc.
Process: All good feelings stemming from product, price and programs can easily be negated by poor processes and difficulty of doing business. One of the largest AV integrators in the U.S. told me this: “I would rather pay more for a product and have a good process and representation, since we will spend more overall just trying to manage lack of attention and poor processes.”
People: AV is still a relationship business and, quite often, the vendor personnel calling on an integrator make all the difference. Do prospective vendor partners call on you in the way that you want them to? Do prospective vendors’ personnel know and serve your needs, or do they just try to sell their widgets? Do prospective vendors know and respect your staff?
Not ‘If’ But ‘When’
In the world of commercial AV, it’s not a matter of if a problem will occur; rather, it’s a matter of when one will occur. And how that problem is handled will determine the quality of the relationship. If Product, Price and Program have a semblance of parity, then Process and People will make the difference. Another of the largest integrators in the country told me this: “We do business with those who make doing business the easiest, and [we choose] those we and our people like the most.”
Here are some parting words to the wise: Product, Price and Program are the price of entry. The vendor partner you select, however, should come down to a combination of Process and People. Ask yourself if a prospective vendor partner has done their homework. Do they really know you — or do they just know of you? Keep in mind that many contact you via email simply because they’ve seen your integration business on a list of companies. Have they been to your offices and met with your people? What do they understand about your project-based business structure and your clients? What is their order process and support structure? How does it work?
In a very real sense, prospective vendor partners are applying to you for a job. The job is to become your vendor partner. As you would look at a potential employee, look at the prospective vendor. No more and no less is required. Do they practice “give me sales, give me sales,” as so many do? Or do they want to earn your business and become your partner?
As the iconic newsman Paul Harvey would say, “Now, you know the rest of the story.”
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our digital newsletters!