One of the most fruitful networking connections at CI and CE Pro Summit 2015 was actually planted at CI and CE Pro Summit 2014. It was then that commercial integration firm support group USAV found its booth situated nearby residential integration firm buying group ProSource in 2014 and they got to talking.
“What became apparent was that [ProSource] had a number of residential integrators that were moving into the commercial space,” says USAV Group CEO K.C. Schwarz.
Meanwhile, USAV tends to create programs that focus on larger integration firms in the $12 million to $15 million revenue range.
When USAV and ProSource considered the smaller commercial firms among USAV’s 52 member companies and that nearly all of ProSource’s 500-plus members do at least some commercial work—”anywhere from 15 to 70 percent of their revenue,” estimates Andy Orozco, ProSource’s director of business development—an idea was developed to form a group focused on firms with small to moderate commercial businesses called CI Edge.
“There was what we perceived to be an unserved niche in the $3 million to $10 million [range],” Schwarz says. Not just from a benefits and programs perspective, he adds, but “from a manufacturer standpoint they all chase the big boys.”
During CI Summit 2015, USAV announced on CISummit.com the following:
The US’s premier team of custom AV integrators, announces a focused solution for mid-sized and small commercial integrators. If you’re a commercial integrator with revenues between $3.0 and $10.0 million, CI Edge will provide you with preferred pricing and performance rebates from major manufacturers. And, you’ll benefit from professional training and collaboration events with peers and industry leaders.
USAV and ProSource leadership spent the nine months between Summits putting together programs for the new group. The plan is to launch CI Edge in early October 2015.
Beyond the group buying power benefit, the plan is for CI Edge members to leverage USAV’s preferred manufacture training. Large manufacturers, Schwarz points out, will do custom training specifically for a large integration firm. “But if you’re a smaller firm, you sort of have to aggregate that.”
Related: USAV Leaders Emphasize Need to Adapt
USAV Group doesn’t currently have a regional sales structure that focused on regional contact with dealers, but ProSource does. “So ProSource division managers will represent CI Edge to the market around the world,” Schwarz says.
A big focus of CI Edge is to facilitate collaboration between the $3 million to $10 million firms. “A big dealer in Philadelphia, for instance, won’t have an office in Phoenix,” Schwarz says. “They need support and a trusted partner throughout the country.”
The last step to forming CI Edge is nailing down the manufacturers support elements. “That’s why we’re targeting October 1, because we have to go back to our manufacturers now and make sure they’re happy with the programs or make modifications as necessary,” Schwarz says.
The bottom line for all manufacturers is that each CI Edge dealer will have to qualify for each manufacturer program individually just as they would with a USAV or ProSource program, he adds. “We don’t intend to change that.”
Current USAV members in that $3 million to $10 million range will not be automatically switched to CI Edge. “We are not going to force anybody to change their USAV affiliation,” Schwarz says. “However, we are going to discuss with those smaller dealers that are below $10M whether they wouldn’t be better served in CI Edge.”
The new group is expected to launch with at least 100 members. Since most of ProSource’s 500-plus members do commercial work in addition to their residential market focuses, there will be a significant influx firms that will have access to the group’s commercial market specific training and manufacturer programs.
Related: Invasion of Residential Integrators
“There are guys who are really wanting to get into the [commercial] business and that’s where the education and best practices really come into play,” Orozco says.
As to whether or not USAV members see the influx as new competition, USAV founder and CFO Chris Whitley says there hasn’t been pushback from the dealer advisory council.
“There is a little bit of a rub, but it will increase their buying power, so it will be more competitive,” Schwarz says. “Let’s be honest. In a competitive, large project situation everybody has the same price anyway. We’re not really adding a lot of competition for anybody.”
The influx of members appears to be a win-win for manufacturers, Whitley adds.
“Vendors are approaching us now about getting in, but we’re going to be strategic and move through the process and work together on it.”