Moving Into Commercial: Part Two

straddle-1210In the prior installment, we began to examine the trend where integrators are crossing over: residential companies going commercial, and vice versa. This time out we’re going to take a look at what career residential guys need to do in order to leverage what they’re already good at in order to make a successful jump into commercial AV.

According to John Stumpf, Sales Manager for Fergus Ontario’s Station Earth, there are more similarities between large commercial projects and large residential ones. As he explains, integrators need installation efficiency, project management, and serious logistics with regard to product ordering.  Without those, big projects will kill you. Station Earth is no stranger to large commercial jobs, especially MDUs, and Stumpf mentions that many of these projects require pulling over 100,000 feet each of Coax and Ethernet cable.  Staging your orders so that you have exactly what you need, when you need it, as opposed to having to find room for 100,000 feet of wire all at once is critical. This is when your project and office managers really earn their pay!

Stumpf also points to price sensitivity as a difference between commercial and residential projects. This is due in part to budget concerns, but also because there are more decision makers: many medium sized businesses often have three or more partners invested in the enterprise, and that may require more than one sales pitch and consultation. If there’s a bid process in place, price sensitivity may be an even bigger issue. In the case of crossover business, it’s not unusual for a client who’s splashed out on their residential system to be far more cost-conscious with the system they’re contracting for their business. That has certainly been my own experience.

The need for a simple user interface has been a drum that I’ve beaten for years. That’s triply important in commercial projects. Even a small project may have a dozen or more end-users and if half of them attend your walkthrough and training session at the completion of the project, you’re lucky. If you haven’t written user manuals for your projects before, you need to start.

Building on that last point, design the system so that its operation is as self-explanatory as possible.  Keeping the user interface uncomplicated can go a long way to maintaining client satisfaction.  When reviewing the system’s decision trees, step outside your role of AV or programming nerd and imagine that you’re a bartender or an insurance salesman and ask yourself if you could operate it now.

Looking from the outside in, a common perception of commercial work is that it’s low margin and highly competitive, and it can be. However, the same can be said of HomeAV if you’re doing it wrong. There are two ways to do it right.

The first is to identify the segments where you can compete without losing your shirt. Maybe it’s digital signage, maybe it’s automation for HVAC and lighting control. As a business owner or manager, it’s time to do your homework and identify the SWOT (Strengths, Weaknesses, Opportunities and Threats. Everyone knows this, right?) of the segments you’re considering taking your company into.

The second is client management, which successful residential AV guys already know how to do. As Stumpf says, “You are going to get clients who want it all, but don’t want to pay for it all.  In that case, you need to be firm, and instead of deciding where to shave prices, you need to say to them ‘Look, here’s where we can pare back functions and features. Do you really want to do that?’”

Integrators have to be comfortable saying “no” to prospective clients, and commercial work is no different.  As Stumpf put it, “I’d rather walk a project than guarantee that I lose money on it.”

Commercial and residential projects complement each other, and in light of the economic trends and the need to take the business that’s in front of you, that goes a long way towards explaining why the line between residential and commercial is blurring.

Lee Distad is a rAVe columnist and freelance writer covering topics from CE to global business and finance in both print and online. Reach him at lee@ravepubs.com