Holding The Line: Part 1 

Holding The Line Lee Distad 1 1Not long ago, I submitted a piece titled “Things That Come Up a Lot” where I dove into some of the common challenges AV and CE businesses face, regardless of the specific vertical they’re in. I made the point that most are more similar than they are different, and while specific solutions may need to be tailored, there are usually lessons to be learned from what your peers have experienced. Even as there are some challenges that vary, there are others that everyone faces.

There’s been a surge of business in the channels I work with in the past couple of weeks. Its cause, I think, has something to do with pent-up demand and forward-looking optimism. While it would be nice to definitively identify the underlying reasons for this surge (if only to be able to forecast appropriately), we should all be grateful for it on a basic level and just roll with it.

Not that it’s all good news. In a recent thread in the AV Nightmares group on Facebook (which is worth belonging to, just to look at pictures), there was much discussion about RFQs coming in from not only prospective but current clients that list absurdly low hourly rates. The general consensus in the group was to tell clients like that to pound sand, as well as a collective pessimism that someone might actually bite at an RFQ like that. This ends up reinforcing bad behavior like that.

I often talk about how the margins on brands and product categories are always at risk; what can be a bread and butter line one year can be a low margin the next. That’s why it’s imperative you defend the one source of revenue that will always be with you. It’s the one you have the most control over your labor, backed up by the expertise and experience that justifies it. 

Billing for your labor isn’t enough, your revenue from it has to be profitable as well. That’s why it’s alarming to see clients trying to chisel away at it. And then, to add insult to injury, act like they’re doing you a favor? Clearly, it’s not okay to treat AV professionals like gig musicians. I mean, it’s not okay to treat gig musicians like that either, but you know what I mean.

Imagine being asked to work for free and “for the exposure.” Really, that’s almost more insulting than RFQs that want your labor to be a quarter to a third of what you normally charge. I’ve joked while working with my clients that in some ways labor is no different from inventory. You need to know what you’ve got, what it costs, what it’s worth and you can’t let it sneak the door without being paid for. 

The simplest remedy for clients who’ve set unrealistic expectations is to reset them. That’s a polite way of saying, “No.” There’s more to it than just that, of course. I’ll go into in my next column, so keep watch for it.