Most integration firms—most businesses for that matter—need to constantly evaluate their processes and practices in order to avoid falling out of step with where their customers need them to be.
The integration industry in particular is at a shifting point. What customers want is changing, but how most integrators run their companies isn’t changing fast enough.
The New Year is as good a time as any to commit to making quantifiable improvements. Following are my suggestions for integration firms to consider in 2014:
Revisit Sales Compensation Structure — As product margins fall, most integrators would like to place more value on service. The pendulum has swung heavily for most firms and profitability is shrinking. One reason many companies struggle to sell differently is that they are compensating their sales staff the same way they always have.
Logic Integration is one firm that has shifted its sales compensation. Its staff is “double incentivized for service and maintenance contracts outside of our standard compensation,” according to business development manager Bill Craig.
Zdi uses a sort of project profitability calculator to recognize which potential jobs are best to pursue. It compensates sales staff based on project profitability. Their “commission could be double on one job versus another simply because it fits our business better,” says CEO Aaron McArdle.
Make a Little Marketing Effort — It’s always been difficult for integration firms to justify spending on marketing, but you should evaluate if there are things you can be doing to help your sales people generate new business and reach new markets. I’m not talking about “Crazy Eddie” type TV ads.
Little things like customer relationship management (CRM) and exhibiting at strategic trade events are examples of expenditures that can more than pay for themselves in resultant sales. For a typical integration firm, marketing and promotion make up only 0.41 percent of its operating, selling and administrative expenses, according to NSCA’s “2013 Financial Analysis of the Industry Report.”
Meanwhile, too many integration firms have zero or lackadaisical social media presence. Throw some effort at building your brand and establishing connections through Twitter and LinkedIn. Keep tabs on the results to see if it’s working.
Become More Balanced and Diversified—Here’s my opinion on why AV-centric firms are too slow to appreciate IT and why so many IT professionals lack respect for AV: integration firms have inordinately thick company cultures. Employees understand and cling to their leaders’ market philosophies.
The problem is—with apologies—those market perspectives are too often out of touch.
When I attend industry executive-level events like CI Summit or NSCA Best Practices Conferences (BPCs), I see similar faces in the crowds. This industry needs to diversify and needs to amplify different voices.
At one of those BPCs, NSCA executive director Chuck Wilson suggested that firms think about implementing a “mentor-mentor” program in which company veterans pair with young employees. The goal isn’t for one party to preach to the other but for each to learn from the other’s unique and valuable perspective.
I love that idea, and a new year is a good time to change perspective.
