Losing to Lowballers? This is Nothing New, and Neither Are the Remedies…
Note: Chuck Espinoza, CTS-D/I,CQT,ISF-C,DMC-E,EAVA is a co-contributor to this blog article (where noted).
After being through the bidding and install job competition wars for over 15 years in the AV industry, I can safely say that I along with others who have written blogs and articles have some great (and frustrating) stories to tell. Many of us certainly have the capability to specify the proper equipment and scope of work, and deliver as promised to the end user even at times going above and beyond to further earn that trust.
Below is of course what you’d like to see in a well-installed room system rack:
This one, not so much:
As with anything involving sub-par work and inadequately specified equipment, solutions to such problems are what’s needed, not just speculation as to what’s proper or necessary. I’ll get back to that shortly.
First, one of my lowball bid stories:
One of my markets was K-12 education to go along with higher ed and corporate. One bid especially sticks out in my mind as possibly the most outlandish — bordering on the absurd — that I had ever been involved in. When I got to the high school (which I drove over almost two hours to), there were about 10 different companies represented although the job was certainly worth being present at the bid meeting for. I did business with a major university that would literally have up to 15 different companies show up and I could never fathom how you weed through a bunch like that. I’m sure others have seen bid meetings where participants could fill a whole arena.
Anyway, to cut to the chase the final bidders left were my company and another that specialized in security systems. Not AV mind you (even though their profile consisted of small room installs), but security hardware and networking. How much security system hardware was required for this job? That’s right — zero. However, to go with their rock-bottom bid, as we know bids read a certain equipment model or “the like.” Well, they took full advantage of the like and may have actually placed one or two of the specified brand/models in their bid along with a multitude of lesser or no-name products. To say the least, with my bid specifying most of the equipment models listed in the documentation, the fact that I was a bit higher priced should have put me squarely in a good spot since I was picked to stay around.
Then came the meeting with the administrator to state my case. In essence, as I had presented a bid close to spec in terms of equipment and scope of work, wherein after examining their bid (and of course they examined mine), I found it to fall way short of client need and expectation. I had given the customer (in a diplomatic way of course) an explanation and the administrator was convinced that the job should be ours. However, the district heads had to meet and of course you know what that means. Right, anything can happen as it can become as arbitrary as the weather. And as I figured, the arbitrary won and a company that had no business whatsoever doing a job like this got the job. And the slow burn began…
Did I give up on it? No, I was determined to restate the case to give them the full idea that they were putting this job in the hands of a security company and that we had had to actually fix jobs that were installed by others who were not familiar with installations like this and could not provide a proper scope of work to go with it. Did it fall on deaf ears? The answer to that of course is an easy one… yes. Did the company complete the installation properly? I have no idea and received no call after the fact. Either way, so be it.
I found a great article from October 2010 Selling Beyond Price that begins this way:
Recently I have been hearing a recurring comment from dealers – both integrators and stagers – that customers are very price-focused, margins are too low already, and it has become increasingly difficult to convince anyone that one company is worth more than another. “The lowballer always seems to win.” For years we have been earnestly trying to level the playing field to get to an apples to apples comparison. Now that we’re there, we need to realize that the whole purpose of the level field was to showcase our differences.
Yes, this was published almost four and a half years ago, yet the message eerily resembles that of today where lowballers are disrupting the industry and bottoming out margins. Apples to apples? Just read my story again to see a true apples to mangoes situation.
The article goes on:
How can I differentiate when I am doing the same thing as everyone else?
The glib answer is, “Stop doing it like everyone else.” Ask yourself, what value can you sell at a premium? There are two things for which customers might pay extra.
- Any product or service that uniquely meets their needs.
- Any feature that unexpectedly adds value to the outcome, but is difficult to quantify.
Let’s examine point #1. Go back to my story as I provided the apples and the other company provided anything but apples in their bid. Yet, they won so I’m not sure exactly how you actually qualify “unique” but the challenge to do so is undoubtedly there and could have been a possibility in this or just about any other situation. In fact, I know there are companies today who are employing this train of thought offering such things as structured cabling (below) with RCDD‘s on staff or contracted, AV and IT managed services, advanced UCC capabilities including enterprise cloud hosted telephony and contact center solutions (ShoreTel Sky and Corvisa being examples), and more.
As for #2, I invited Chuck Espinoza, formerly a member of InfoComm International’s Certification Steering Committee (2010 – 2014), as well as Leadership Search Committee (2013) to give his own viewpoint on this one:
“The sales, design and system engineers are CTS/CTS-D certified. There will be at least one (if not more) CTS-I [employees] on the job site, and over 75 percent of my technical staff have their CTS, as well as manufacturer certifications, so the chances that a majority of the personnel working on your project have been “weighed and measured” and have been deemed certified.
Now, a piece of paper does not prove anything… except that the person who received that piece of paper has the training and knowledge it takes to pass the CTS test. There are many in our industry who don’t possess that credential that are outstanding AV professionals and do their job well. There is just no way to distinguish the uncertified “good guys” from the uncertified “not so good guys.”
The certification is just a little bit more in the “piece of mind” category… and, usually, the skill will follow.
It’s like looking for a dentist. I could look in the yellow pages and call 20 different guys. There might be someone out there who can yank out my teeth and dig out my cavities (or give me a root canal) who does not possess the DDS credential. He might have studied dentistry for 100 years under “the masters.” But I would not be able to distinguish him from a hobo with a drill until it was too late.
The guys with the DDS behind their name – no gamble there. I KNOW they will do it correctly. It might no be as good as the guy who studied with “the master,” but it will definitely be better than the hobo.”
The article goes on:
In the custom project business (Event Staging or Design-Build Integration), being mysteriously expensive is all about image before the sale and execution afterward. You have to look like a company that provides a premium experience, and that is impossible to do when you look like your competition. For the consumer, mystery is expensive. If you can describe an outcome that meets the customer’s needs, provides them an experience they want (but perhaps didn’t know they needed), and demonstrates that you know some sort of magic that no one else knows, then you have created at the very least — a need for further conversation.
Here’s the statement that makes a ton of sense. In fact certain solutions are discussed today that could have possibly been foreshadowed by this article. First — UCC as it exists in the moment. After attending Enterprise Connect a few weeks back, I had seen a multitude of solutions that could also set me apart from the competition from Crestron, X2O Media, Riverbed and more where end users might open the door further. Next, digital signage. With the numerous solutions available today, leveraging as many diverse solutions as possible can give you a major leg up in a major AV market realm that is growing by the day. Wireless presentation and control with mobile devices – these solutions and more certainly exist in a very strong AV technology market now.
Managed services. While service contracts were really the name of the game back then, managed services with built in structured SLA’s will likely win or help win deals vs. those that are written as standard or even sub-standard. Some would be very surprised as to the solutions that exist in managed services nowadays.
Keep Redefining Your Product
Innovative companies are continually looking for their next differentiators… Teach your sales team to recognize the right kinds of buyers, and task your marketing team with creating more demand for your unique approach. Management must continually look for chinks in the armor and take responsibility to be two steps ahead of customers that will tend to commoditize anything they get used to, and one step ahead of your own employees who will tend to rely on old successes to make new ones.
2010: An AV Odyssey that makes a whole lot of sense today…