You know you’re at a unique industry event when your answers as a group determine whether the head of your organization has to take a drink. But, such was the case at the 2015 NSCA Business and Leadership Conference.
During the Beer and Bull session, which closed out the three-day event in Tampa, Fla., NSCA executive director Chuck Wilson matched wits with many of the 300 attendees on backlog, recurring revenue, hardware margins, labor rates, ability to talk about IT, benchmarking and NSCA’s value to its members.
“I’ll happily drink to this,” Wilson said with a smile when members characterized themselves as trusted advisors, narrowly edging out Wilson’s guess they’d say “preferred vendor.” Those choices were well ahead of “low-cost provider” and “one of many.”
“Many of us were the low-cost provider at the beginning and eventually became that trusted advisor,” says Wilson.
On backlog, audience members said they were seeing it up significantly as compared to last year. Wilson chose “up slightly,” saying that’s the average across the country, according to NSCA research. “You guys win because you came to the BLC,” he said in explaining his reasoning before taking a swig.
Wilson and BLC attendees were in agreement on recurring revenue percentages being at just below 10 percent across the board, a percentage which matches the industry at large.
CI editor-in-chief Tom LeBlanc wondered if the stagnation of recurring revenue percentages come from a lack of renewals after a year because integrators don’t have the infrastructure in place to do the job well enough for their customers.
“It really changes the way a company is set up to think like that,” says Wilson, noting the shift from contracting to operations. He alerted BLC attendees to “a huge opportunity to have managed services around the whole bring-your-own-device thing.” But, he noted, “it takes a different mindset” to be effective at securing recurring revenue.
Wilson also told audience members that integrators don’t always have to be the ones to do systems installation to secure a managed services deal with customers.
The conventional wisdom, says LeBlanc, is managed services are easier to sell to customers with so-called “mission-critical” applications, but he wondered if there were other types of jobs that might be considered as such. Audience members added courts, school intruder alarms, telemedicine and videoconferencing for a meeting that could land a major contract or customer to the mission-critical category.
Audience members and Wilson agreed that labor rates are in the $76 to $100 hourly range, a ballpark Wilson calls “not that surprising.”
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“It’s certainly something we’re moving that trend up so significantly,” he says, noting the rate was less than $40 per hour a few years ago.
“Everyone has a minimum profit they need on a job,” says Wilson. “It doesn’t matter where they get it—products or service. But you don’t want to get a big job that ties up all your resources but that makes you miss a couple of jobs where you can become that trusted advisor.
“Bidder’s remorse happens every day. The way to avoid that is to always stay toward your sweet spot and let someone else take on the jobs that could max them out,” he says.
Wilson and BLC attendees matched up on saying they have a strong ability to talk about networking with IT directors. As AV and IT continue to be intertwined, though, it’s more critical than ever to keep these skills as sharp as possible.
“We know the type of people we have to bring in, but we don’t know how to pay for that person,” says Wilson. “We can get these kids right out of college and they can teach us things about technology.”
Wilson is concerned about integrators who haven’t embraced or continue to deny the crossover between AV and IT.
“That fork in the road is there many times in the history of a company,” he says. “I worry about the ones who are just sitting at the fork.”
Wilson remains a strong advocate of benchmarking and urged attendees to rely on NSCA to help them do it.
“If somebody’s making a mistake, the other guy doesn’t have to be,” he says. “There’s no reason you have to do that yourselves.”