Azione Conference Focuses on Labor as Underutilized Revenue Source
"Vis-a-Vis" was the theme of buying group Azione Unlimited's Spring 2014 conference that kicked off March 19 in Las Vegas, and the translation of that phrase "face to face," was not lost on the group's founder, Richard Glikes.
The opening day saw Glikes encouraging bonding and camaraderie between dealer and vendor members of his buying group, along with a focus on potential revenue streams dealer members should make better use of, particularly labor and service charges.
Held at Las Vegas' Hard Rock Hotel, the conference kicked off with a gathering of only dealer member companies (the group's vendor companies, which Glikes considers members as well, would show up later in the day). Glikes commenced the festivities with a run-down of Azione's goals, along with the announcements that the group now has 36 member dealers, and has added a new vendor (Qmotion) as well.
"We are their exclusive buying group," he said of the new Azione vendor company.
"'Elevate' is our goal for 2014," Glikes told the assembled dealer reps, getting straight to the point of how they could elevate their profits: by charging more for labor.
"Anybody know any plumbers not making money? No," he offered as an example of the financial power of labor charges, which are frequently undercharged or not charged at all by electronics integrators.
Additional suggestions from Glikes to boost earnings stated in his address included:
• selling more expensive brands
• selling more expensive models within those brands
Most Profitable Ideas
Glikes followed his opening statements with short presentations by Azione dealer reps offering their best ideas for generating more profits. Speakers included:
• Bill Charney of Advanced Home Audio, who spoke of beefing up his sales department, both by adding a new salesperson, and implementing a new software, Sales Toolz; restructuring by losing some of his staff's "dead weight" and putting veteran employees into positions better suited to their skills; and using metrics to forecast future earnings and run more efficiently.
• Kim Michels of Electronic Environments, who created a separate service department that included a salesperson, project manager, designer, lead technicians and technicians. The new department proved so popular that it is currently booked six weeks in advance, he reported.
• Jon Myer of MyerConnex, who spoke of methods his company devised to boost labor efficiency, including: letting techs take their vans home and then drive directly to jobs; offering incentives such as tool gift cards to techs; raising billing for labor by $20 an hour; and paying himself first and "putting it on the team" to bring in the necessary earnings each month.
Next, dealer David Daniels, co-CEO of Xssentials, gave a presentation entitled "How to Succeed in the Changing Product/Services Business Model," in which he emphasized the importance of being innovative in today's competitive CE marketplace.
The key, Daniels said, was to create an innovative new business model geared for the way business is done now.
"It's not sufficient to just be efficient," he said. "We need a bolder vision."
This, Daniels felt, can be achieved through strategic partnerships that will drive creativity and profits, as well as delivering a superior customer experience.
This can be achieved, he said, by adding value to the customer with a clear value proposition--a dealer's competitive advantage. Competing on price, he said, ultimatey does not add value and is a losing proposition, as it is not sustainable.
The key ingredients of a value proposition he cited included:
• quantified value
• relevant to the shareholders (customers, investors, staff)
• uniquely differentiated from competitors
Daniels next showed a chart that indicated product sales are going to be nearly equal to labor sales by 2010, and service sales will significantly increase by this point as well.
The key to staying on top of the curve with service? According to Daniels, a clear customer focus.
Daniels then showed stats that indicated how much dealers are losing and stand to gain by increasing their focus on providing customer-focused labor and service.
This presentation was followed by a related open discussion in which the dealers presented their own successful new business models, speaking of increasing labor charges to boost profits, as well as steps they took to ensure customer satisfaction such as follow-up calls and visits, the giving of gifts to customers at holiday time, sending thank-you notes, and even wearing protective "booties" when working in customers' homes to avoid leaving mud and dirt tracks behind. One dealer spoke of how these booties can be customized with a company logo to act as a marketing tool as well.
Making Money on Labor
Next was a roundtable discussion in which each table of dealers present had their own talks on what they'd done to boost labor revenue in the past year.
Ideas resulting from these discussions included:
• service contracts
• boosting warranty sales
* adding an 8 percent line item for miscellaneous parts
• billing for such under-billed items as travel, loading and cleaning
* going digital with work orders and time sheets to cut costs and increase efficiency
Following these dealer-only discussions, reps for Azione's vendor members arrived.
Glikes kicked off this portion of the day with the presentation of this conference's awards to:
Dealer--Hermarys, represented by David Hermary
Vendor--Netsertive, represented by Jamie Sasser
This segment of the day continued with get-acquainted meetings between dealers and vendors broken out into 12 groups based on the month of their birth.
All About Bandwidth
This was followed by a brief presentation by keynote speaker Mark Valenti of consultant The Sextant Group, who spoke of rapid changes in technology and how they could affect CE dealers in years to come.
"Bandwidth is going to become infinitely available to everybody," he said. "That infinite bandwidth is going to change our business. It already is."
One result of this change: consumers won't need physical media such as Blu-rays or CDs anymore. Such shifts will also affect the knowledge and technological orientation of young employees new to the industry but well-versed in the digitally driven technology of today.
He also spoke of the coming of mass customization, typified by 3D printers, saying he believes there will be a day when a CE tech will roll up in a truck and manufacture customized speakers, displays and other gear on the spot using such maker technology.
"I'm going to wish you the best of luck with crossing over," said Valenti, who will give a more extensive keynote address on the second day of the conference, March 20.
The evening finished with a dinner at the nearby Hofbrauhaus.