I often have people ask me how they maintain profitability in a world where technology is becoming more and more commoditized and where the average selling price (ASP) of technology in each room seems to be decreasing year after year. I am sympathetic to these concerns for sure, as it is never a good thing for business when both your margins and ASPs start to drop.
Most AV companies position themselves as either a subcontractor or supplier to the construction industry or the IT department. When we start by placing ourselves in the position of selling technology products and labor services, of course we get commoditized. Our products are placed squarely in the depreciating asset category and our services are merely another cost to be minimized or taken in house.
So what is a way that we can break out of this spiral of diminishing profit margins?
We have to change the conversation. We need to flip the perception of our products and services being a liability to be managed and instead transform them into an asset to be leveraged.
We do this by talking about the idea of a revenue-generating space.
Our customers are businesses. As such, they have something to sell or a problem to solve. Their space not only allows them to be productive but also to generate revenue, either in sales for products and services or in raising money to solve problems, cure diseases, etc.
Public spaces and customer facing areas then by default become opportunities to engage potential visitors, therefore increasing the chance of generating revenue. Lobbies, business theaters, boardrooms, etc. all have the potential to attract new talent as well as convert visitors into customers or donors.
When talking to clients about these types of spaces, we have to be having a higher level business with the owners and C-Suite in order to help them connect the dots between their technology investments and potential revenue.
Think about how much companies spend on their signs, websites, business cards, letterhead, truck wraps, networking events, etc. All of these things are investments in getting the customer’s attention, creating either brand or company awareness.
Yet, once they have the customer’s attention, once the prospect is actually coming into their building to talk about the company’s product, service or mission, they enter a space that has been treated like a depreciating asset.
To use another analogy, their Tinder profile picture doesn’t look anything like the person that just showed up for the date!
Companies need to consider the potential impact of each space on their business. If a meeting goes perfectly in this room, how much money on average will a customer spend? If the meeting goes terribly, how much money is at stake? Then, make an investment relative to the actual impact of the space.
We need to start speaking to value if we are going to continue to thrive as an industry. This means having some different conversations with customers and helping to connect the dots of the customer experience (Yes, I used the “e” word.) from awareness to conversion. If we can do this, we are an amazing asset to our clients.
So… Here are three words to add to your vocabulary —
Revenue. Generating. Space.