Not that the situation in the USA should be any indication of what’s going to happen in Australia, but let’s consider it a possibility. In the early 1990’s almost anyone could have started an AV dealership and been successful. In fact, many did and were. Why? Well, with the advent of the LCD projector and then the development of the DLP projector, all of a sudden projectors went from weighing 20 kilos to 5 kilos.

Then, all of a sudden, corporations and educational institutions realized that they needed projectors to connect their PCs and laptops to. So, ProAV dealers have made a killing selling projectors with reasonably comfortable and fair margins. Then came the Box House and the Internet. One day, someone who was selling hundreds of VCRs and thousands of videotapes a day decided they could make a killing selling projectors (without service) for the same margins that they make selling tape. And, customers, without realizing they were being taken for a ride, bought them.

And now, we’ve got the Internet. Now, you don’t even need to stock the stuff (or even have a building for that matter) to make a killing selling projectors through the ultimate “equalizer” (the Web site) that makes a former shoe salesman look like IBM on the Internet.

Some Internet resellers in the USA are even selling projectors BELOW (yes, below) dealer cost. How? Well, they are doing it by selling everything below cost (vacuum cleaners, CDs, pants and carpet – right along side projectors, monitors and PCs) and making up the difference in advertising revenue. Then they plan an IPO (IPO stands for Initial Public Offering and is the term used when you take a company public – to trade on the stock exchange) and make a killing of stock.

So, think it’s not going to happen in Australia? Well, think again. I, personally, know two BIG resellers of all sorts of “stuff” that’s planning an Internet outlet in Australia (not to mention the dealers already on the Internet). That’s not the point, it WILL happen. The point is, what’s next? What does the dealer do next and, what can the customer do to protect him or herself?

Customers need service. They may say, and may even believe it themselves, that service is not important or that these things never break so they don’t need a service agreement or support from a local reseller, but they do. If they don’t buy it at first, wait a few months they will call you back. It’s inevitable. But, what about the dealer that is, all of a sudden, struggling?

Systems. Go systems. Sure, they may be able to sell a projector over the Internet, but they can’t hang it in the ceiling, change the lamp, connect it to a DVD player, a VCR and a computer and make it controllable from one, simple, easy-to-use remote control, over the Internet. That takes a Systems Integration team.

Can you build systems yet? Are you a systems integrator? Well, you can’t sell service agreements without having the capabilities of a Systems Integrator. It’s a team approach to selling, supporting and servicing a client. Think you’re doing that already?

OK, let’s take a simple test: When was the last time you spent six hours with a client (on their turf) asking them questions about the way they run their presentations or will use their training facility (and NOT demo’ing a product)? If your answer was never, then, you probably are not a Systems Integrator.

You see, the first step with a client in the systems design phase is performing what’s called a Needs Analysis. The Needs Analysis consists of determining the usage of the facility, budget, contacts, interviewing the instructors/facilitators and finally evaluating the facility structurally. This takes at least 5-6 hours. I’ve seen someone do it in four hours, but never less. Why? Well, in addition to gathering information, you are also establishing a relationship with the client so that they trust spending anywhere from what amounts to the price of a 7-series BMW to as high as the price of a house. It take more that a demo to get that PO (purchase order).

OK, so what’s the key and why do it? Well, eventually clients realize that they sure could use a facility that had this presentation gear permanently installed in the room instead of bringing it in every time they need to have a meeting; one that is totally automated and operates with an extremely short learning curve and is technically complex but actually easy-to-use.

We’ve been counseling dealers in the USA and Europe to help them make the conversion from a projector dealer to true Systems Integrator capable of designing boardrooms, conference rooms and training rooms; turnkey. It’s not hard, but it does involve a philosophical shift from being a box re-seller to becoming a systems and facility designer.

But the rewards are huge. Long-term relationships with clients that amount to potentially millions of dollars of revenue from one client and profitability from selling, not only the gear, but also the installation services, systems design services and “Proactive service agreements” – not extended warranties.

What’s a Proactive service agreement? Tune in next time as we explain the most profitable part of selling systems and the service with the highest level of customer satisfaction in our industry.

----- Gary Kayye, CTS is Principal of Kayye Consulting an industry consulting firm specializing in providing marketing, business development and training consulting for ProAV dealers and manufacturers. He has developed a business plan that is effectively a “Blueprint” Guide to building a Systems Integration company from scratch or by converting a projector reseller to a Systems Integrator. The Blueprint Business Plan is over 100 pages long and even includes sample systems projects. It’s expensive, but worth the investment. He may be reached at his web site at www.kayye.com or via e-mail at gkayye@kayye.com.