If you are a frequent reader of my columns, you know that I have been – for years – saying that the AV business is quickly moving towards a commodity where we will need to focus on services as a profit model. The good thing is that service is WAY MORE PROFITABLE than selling gear, so, for those of you who are moving towards a service-based model, you’ll do really well in the future.
Although our market wont get as drastically commoditized as the new NetBook market became this week with the announcement that Sprint and Verizon wireless will be partnering with Best Buy to sell a $500 Compaq-brand NetBook for $1 – turning the NetBook market into something akin to the cell phone market (read this), we will get to the point where a lot of gear will be so inexpensive that it’s margins don’t matter and that Design Services, Integration Services, Maintenance Contracts and, most importantly, Proactive Service Contracts will be the mainstay bread and butter of the AV integration business.
So, how do you make sure you’re a player in this new market dynamic? Well, the first thing you NEED to do is make sure you have four profit centers set up in your businesses. Are you selling Design Services? Are you selling Proactive Service Agreements? If not, why aren’t you?