It’s a question that keeps founders, principals, owners, presidents and all other business leaders in the integration industry up at night.
How can my business find ultimate success?
Some firms have found their answer. They’ve continued to grow and find new ways to increase revenue year after year, despite massive changes in the industry in regards to technology, customers’ needs, and overall competition.
But most firms are still finding their way and building on strategies to acquire more customers, bring in more revenue, and increase their growth.
While there isn’t one universal answer to finding ultimate success for all integration firms, there is a golden rule to follow, according to Julian Phillips, VP of Whitlock, one of the top three biggest integration firms in the world. As stated in CI‘s 2016 State of the Industry Report, Phillips says integration firms need to “Get Big, Get Niche, or Get Out.”
According to Phillips, in order for firms to succeed in “getting big,” they must be able to serve customers locally, nationally and globally, and fund the relationships they’re looking for.
Phillips says customers have three priorities: simplicity, scalability, and standards.
Watch the video below to hear more from Phillips regarding “The Three S’s.”
In regards to simplicity, customers want to be able to deploy technology that is simple, not only technically, but also simple in the form of business.
“Part of the benefit of being big is you can drive very simple business models with your customers and align to them,” says Phillips.
In regards to scalability, “If you want to play in the enterprise space, you have to have a scalable organization that can serve your customers locally, nationally and globally,” says Phillips. “The first question is, are you big enough and can you scale to actually support those customers? Because that’s where they want you.”
Customers also want an integrator who can help them drive standard technologies and a standard experience wherever they’re working. If a firm can deliver on all three of these priorities, the better chance they have at becoming a big player in the industry.
Phillips points out, however, that the “Get Big” path isn’t for everyone.
“[Getting big] takes finance, it takes strategy, it takes execution, it takes a lot of things. That doesn’t necessarily mean, however, that every single AV integrator number one, can play in that space, should play in that space, or is actually going to be successful, playing in that space. I think we’ve seen examples of some integrators that like to believe that they could actually play the scale market. They’ve really stretched their resources, to the point where they’ve actually found it really difficult to maintain that,” says Phillips.
Luckily, if getting big isn’t in the cards for various firms, there is another option.
Finding Your Niche
According to Phillips, there are huge opportunities for integrators to grow and become successful in various niche areas.
For instance, a geographic niche could be the right avenue for a firm to take. “If you want to be the very best integrator in New York, that’s your domain and you own that,” says Phillips. Another option is becoming a top-notch integrator for certain types of technology.
“If you want to be niche by saying ‘I am going to be the very best in classroom technology’ or ‘I’m going to be the very best at digital signage,’ you can specialize in that and grow a practice that is really doing that,” says Phillips.
A third option is becoming an expert in a certain vertical market. “You can become the very best healthcare provider for AV, for example. The niche opportunity is massive, and there are a lot of very profitable, high growth opportunities there,” says Phillips.
When to Call it Quits
No firm wants to throw in the towel, but there are certain warning signs that businesses should pay attention to if getting big or getting niche aren’t possible avenues to take.
“I think there are a lot of integrators out there who haven’t really figured out what their value is. They haven’t really figured out what their strategy is, and they’re sort of indecisive. I think that’s really when the warning bells start ringing,” says Phillips.
“If you can’t make up your mind as far as what it is you want to be and what it is you should be, get the hell out as quickly as possible, because don’t believe for one minute that whatever value you think you have in your business is going to be retained. You sort of just hedge your bets and end up sitting in the middle.”
Developing a Successful Strategy
Sticking to, and executing, your business strategy is certainly important for growth and success, but it’s important for businesses to keep in mind that their strategy might have to change.
Whitlock, for example, has grown 54 percent in the past three years, but they aren’t using the same business model as they were during their start 60 years ago.
“We’ve really been through a process of transforming our business model, and that’s really the engine behind our growth. When we did a strategic review about five years ago, we asked ourselves, ‘Where is our business headed? What is the market actually requiring?'”
For Whitlock, this meant moving from a transactional-oriented business model to a relationship-focused business model.
“Where we could actually differentiate against our competition, we realized we needed to shift our model to, effectively a relationship model and very much an enterprise relationship model, where we would be building a lifetime relationship and lifetime value with our customers,” says Phillips.
Despite the recent trend of consolidation in the industry, Whitlock doesn’t see any acquisitions or mergers on the horizon for their company. For them, growth will come through the relationships they build with their customers.
“We want to grow our business by acquiring, not other companies, but acquiring customers…we’ll acquire our competitors’ business one customer at a time.”