By Chuck Wilson
In a recent Twitter debate, I was challenged on a statement I made in this article, recently published in Commercial Integrator. In this piece, I said that until AV companies have the right people in place, they won’t be able to make the jump to a recurring revenue model.
The debate began with a good friend of mine suggesting that: “The growth of managed services will be determined solely by the market. ‘The right people’ cannot create demand that doesn’t exist. And most of AV is not life safety, security, hospital communications systems, or even mission critical.”
He has a good point. The right people cannot create demand that doesn’t exist. But the right people are essential if you want to be the company that can capture the demand that does exist. If you can’t see that demand, or aren’t prepared for the shift from capital expenditures to operating expenditures – driven by IT influence – and adapt accordingly, you may be at risk of becoming obsolete in today’s changing technology space.
In fact, most project-focused salespeople can pull together a bill of materials and price out the technology necessary to put together a conference room. When proposed in a bid fashion, we often find that customers go to Amazon or others that can do it cheaper than you can. Our technology is at risk of becoming a commodity that will be bought and sold based on features and price. Bundled AV solutions, AVaaS, and several new technology deployment models are being launched successfully to overcome the can-be-sourced-anywhere factor and generate the higher profits we all need.
To make that model work, you need to have the right people in place who can articulate the value to customers. We can’t always create demand, but we can create affordability when demand is identified.
While AV solutions may not be “life safety” technology, copiers aren’t either – but businesses have been buying managed service contracts for copiers for years. Copier companies make it easy and affordable to buy a copier and have it work. That is my vision for AV technology: It will be financed moving forward. I often wonder why 90% of copiers are purchased via the recurring revenue model when likely only 10% of AV is deployed in that fashion.
Could it be that we haven’t instilled the “fear of the invoice” in our customers the way the office equipment folks have? (You know … the $250 bill sent just for looking at the equipment?) An AV integrator might send a bill for $85 and fix the system on the spot. Does that fear drive demand for managed services?
I also think we’re seeing AV become mission critical. I’ve become so dependent on my videoconferencing technology that, now, it would be no different than experiencing a mechanical delay at the gate when flying. You still have to rebook the meeting, rearrange schedules, etc. Our mission is to help members solve critical business issues as quickly and efficiently as possible. To me, this makes AV mission critical. Why? Because we depend on it working to do our jobs effectively.
When it comes down to it, we need to think like the great Wayne Gretzky, and skate to where the puck is going – not to where it is.
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