I was talking the other day with an integrator on the east coast of the US. Like a lot of conversations I have with people in the industry, there’s always some small talk about business conditions in our local markets.
As I told him, in the past eighteen months, in Edmonton and Calgary pretty much all the AV guys that I expected would fail have failed, and the dealers who are left are in good shape. With a couple of exceptions, most of them were Johnny-Come-Lately integrators who entered the channel during the height of the housing boom. The survivors, unsurprisingly, are the guys who’ve been in business for ten, twenty, and in one case thirty years: they’ve seen all this before, know how to deal with it, and most importantly, know how to keep their ship afloat.
Which brings me to my point — none of the integrators I’ve known that have closed their doors did so because they didn’t know enough about speakers. Product knowledge was never the issue. By the same token, they didn’t fail because of what their competitors were doing in the market.
No, the firms that I’ve seen go under did so because of any or all of the following: their install processes weren’t efficient, their project management was nonexistent, they borrowed gear off the shelf from one job to complete another, they took the deposits for new jobs to pay their vendors for their old jobs, and so on. Put simply, they went out of business because they hemorrhaged money.
Way back in the day, my employer once tasked me with doing some competitive intelligence: find out what rival firms were doing in our market. In much the same way I tackle most assignments I went overboard: secret shopping their showrooms, staking out their loading areas to watch them load their trucks, scope out the jobsite they were on, pretty much everything short of dumpster diving for their documents.
After three days of this, reality struck me and I sat down with my boss to explain that it was a waste of time. What was our competition really doing? They were pitching systems, rolling trucks, and running lines: the same things we were doing. From that very brief period of observation it was clear that all that mattered was doing each of those things perfectly. Real differentiation would come from efficient installation and back office practices, and actually finishing jobs on time and on budget. If a dealer does that, believe it or not, it will make them the exception rather than the common denominator in the industry — finishing jobs profitably and making clients happy. What else matters?