Kaufmannacknowledged that while there are a handful of integration firms with national or global footprints most need to be laser focused on what makes them successful.
“It’s really about ‘this customer works for me and this customer does not’ and when we try to answer to too many masters that’s when we commoditize ourselves. It’s a very healthy practice: Fire a couple of clients. You’ll find it’s a lot like firing a bad employee. It’s very cleansing.”
AV Has a Bad Name.
Let’s be clear. Nobody at the NSCA event was saying that AV deserves a bad name, but the reality is that among the IT professionals making purchasing decisions for many prospective integration customers, audio and video often go hand and hand with headaches.
“A couple of IT people that I’ve talked to have said I really don’t want to deal with AV because AV is a pain,” said panelist Jay Paul who spent several years at AVI-SPL before recently moving to Biamp. “It’s high maintenance. It’s not easy.”
IT professionals often like appliances, he said. They like to be able to call a vendor, order some boxes, deploy them with a limited amount of work on the back end and essentially forget about them.
For that reason, Microsoft entering the AV integration industry with its Surface Hub collaboration solution is attractive to some. “A company like Microsoft can deliver something that can handle UC all in one box that you can put up on a wall. Well, that’s an easier thing and they might want to go for that,” Paul acknowledges.
Integrators Are Partially Responsible for AV’s Bad Name.
Just as Paul explained why IT folks are often more inclined to off-the-shelf IT solutions versus complex AV systems, he argued that AV integrators need to get better at shifting that perception.
“Maybe the thing we need to do as an industry is explain to our customers the value proposition of putting in integrated AV, a control system [and] what do we bring in terms of quality delivery because we are specialists,” he said.
Panelist Dave Ferlino of Whitlock advised integrators to self-assess their brands and their propositions. “How do you articulate it? How do you articulate it to your customers on a consistent, compelling, concise way that is repeatable and [can] all of your employees communicate it effectively to your customers because they’re on the front lines every day? I think this is important in terms of how you overcome the stigma of commoditization.”
For most AV integrators, Paul added, their value proposition can be extremely compelling. “If you’re in our industry you have to understand optics, you have to understand acoustics, you have to understand electronics, communication, networking. We really have to have a very broad view of everything it takes in order to deliver a communication solution to our customers and make it consistent and repeatable.”
Read next: Ultimate Guide to As-a-Service
If integration firms become better at positioning their value propositions, commoditization should have less of an impact, Paul argued. “We’re not going to keep commoditization out of our playground. It’s not going to happen. What we want to do as an industry is do a better job of explaining and defining what value we bring in the door and there are going to be some places where we have to concede to an appliance because the appliance can do a job and the customer really doesn’t want to get into an integrated solution.
“But they’re also going to find times when they put in an appliance and expect it to do more because it’s been oversold. They’re going to come back and we have an opportunity as integrators to get business back.”
Commoditization Has Uncovered Poor Practices.
In some ways falling product margins are unveiling areas where many integration firms need to tighten their business practices. In the good old days of significant margins some firms probably got away with mismanagement.
“Profit hides our weaknesses and our inefficiencies,” said panelist Brad Dempsey of business software provider Solutions 360.
“We can’t hide anymore. Margins are very thin. More than ever we need to understand costs of doing business. We need the correct inputs to make the correct business decisions.”
Dempsey challenged integrators to better understand costs of running their businesses and executing projects and to constantly compare their costs, spending and performance against metrics that they create and continually update.