Nortek Changes Everything – Seriously, Everything!

Jeremy Burkhardt is gone, Mark Terry is on his way out and and the company is going to make MAJOR changes — only some of which have been released. What Nortek is saying in public is this:

Mark Terry, president of AVC Group, will leave the company. “Mark and his team have done an outstanding job combining the AVC Group brands together and creating a world class infrastructure to service our customers and dealers,” said Sean Burke, group president of Nortek’s Technology Products Segment. “Mark has decided to move on to other endeavors after providing his full support to this integration effort. I am appreciative of the dedication and high level of leadership that Mark has provided and wish him the very best in the future.”
Jeremy Burkhardt, the founder and CEO of SpeakerCraft has decided to “retire” (using his words) and his exit from the company yielded its own press release and an announcement directly from him, in a video, that said: ““The last twenty years at SpeakerCraft have been an awesome gift,” said Burkhardt, “I am lucky to have experienced it with so many great people. I am beyond grateful. I have been working full time since I was fifteen years old and have decided it’s time for me to chill out.”  In addition, Nortek said, “Jeremy is a true entrepreneur. His vision and leadership has built the SpeakerCraft brand,” said Sean Burke, group president of Nortek’s Technology Products Segment. “Jeremy has been a champion of high quality, innovative products and his personal interactions have benefited our customers and dealers, which has improved the industry as a whole.”

Note the two commonalities in these announcements — we’ll get to that later.

Keith Marshall has been named interim president of SpeakerCraft.

The AVC Group (which include brands NILES Audio, ELAN Home Systems, Xantech, ATON and Sunfire), SpeakerCraft and Panamax/Furman are being realigned into ONE company or group of products that will be headed up by Bill Pollock, as the president of Panamax/Furman. Paul Starkey will direct marketing, Dave Keller will head sales and Keith Marshall will lead SpeakerCraft/Proficient. This part is way confusing. Why? Well, on the one hand, Nortek is announcing that (using its own words), “The AVC Group, SpeakerCraft, Proficient and Panamax/Furman brands will align under one centralized division with a focus on customer-centric product development, brand innovation and dealer support.”

Nothing is mentioned about the other big Nortek AV-oriented brands like Gefen, TVOne, Magenta, Linear or OmniMount.

Remember, last month, SpeakerCraft finally gave up on developing Nirv – pointing out that their sister companies like Elan and Niles already have whole-home AV systems.

So, what’s really going on? Well, the truth about it is this:

The economy has NOT recovered in the HomeAV space and each of these once-revered brands has lost mind-share and value over the past few years to less-expensive alternatives and new design techniques. For example, while SONOS thrives, Niles is no longer the market leader. While Tripp Lite shines and has grown, the Panamax and Furman brands have confused the market with which one does what — money that could have been spent marketing these two killer brands is being spent trying to differentiate them while they carry the same combined parent company names. Magenta used to be the only Cat5 gig in town, but now everyone can do Cat5 distribution. Heck, even Tripp Lite, a company known as a power conditioning company, does Cat5 signal distribution now and Crestron, AMX and Extron do nearly all their stuff via CatX cable. Proficient is the winning brand right now of all these in the HomeAV space.

Jeremy was a pioneer — a visionary. Bill Pollock and Paul Starkey are in a perfect position to turn this around — and they can. But, they need to be able to do the following (so this is a message to Sean Burke, group president of Nortek’s Technology Products Segment, that guy mentioned in both the press releases):

You need to form a NortekAV — or whatever you want to call it. Add Magenta, Gefen, TVOne, OmniMount, Ergotron and Secure Wireless to all the above mentioned brands and give Bill and Paul all of this under one company name — not just a products group. Follow the Cisco mentality of absorbing the brands into the power of their name (e.g., Tandberg and Linksys). You are overwhelming the AV industry with too much confusion. Sure, each brand has its own following, but the brands, together as one, will have a much bigger pull and can accomplish more TOGETHER through the synergistic relationships. For example, your Niles brand has plenty of commercial AV applications, yet no one from the commercial AV segment of the market even knows who they are. Same with OmniMount and Proficient. And Xantech. Magenta has HomeAV applications, but nearly every user is from the ProAV market. Same with TVOne.

Don’t use the name Nortek — bad, bad name. Come up with a new, cool name and use it across all brands — you can accomplish this in less than a year. Share sales and marketing, but have two separate channel strategies for HomeAV and ProAV. The support parts of the company can design systems using all the components. Form all product lines that way — from the start. Right now, as separate companies, there is no incentive for anyone in any of these companies to recommend any of their sister-brands’ products.

Align R&D and engineering such that technologically they’re working in harmony. For example, SpeakerCraft’s integration of Apple’s AirPlay was a brilliant idea — but Niles hasn’t figured that out yet. Niles should be doing that, as should Proficient and Elan. Likewise, everyone should be working on CatX systems — use Magenta technology, but have Niles, SpeakerCraft, Xantech, etc using it so all gear is compatible — sort of plug-and-playish.

Shift your marketing to social. The traditional marketing methods aren’t working. Heck, Jeremy went out delivering a message socially — via video. And, it was personable, not contrived. It was believable. If you don’t know how to do that, send someone to my class at UNC – I teach Social Media Marketing at the University of North Carolina – I’ll let them in to the class for free.

So, Sean, give me a call. I’ve been in this market for 22 years. Call CEDIA and InfoComm if you need a reference. Or, don’t call and just do what I said, above. Or, don’t listen to anyone outside your company — do your own thing. It’s working for HP, isn’t it?