Azione Spotlights Trends, Best Practices on Opening Day of Spring Soiree
Buying group Azione Unlimited kicked off its spring meeting on March 17 with a day of sessions geared toward promoting business growth for its dealer members.
The conference, called the “Spring Soiree,” held at the Sheraton Downtown in Nashville, Tenn., began with an update on the group's recent growth from President/Founder Richard Glikes, who announced Azione has expanded its ranks and currently has 110 dealer members and 39 vendor members.
The opening session was a dealers-only meeting in which Glikes reiterated a point expressed at previous Azione meetings—that the dealers were not charging customers enough for their most valuable commodity: service.
“You need to rethink your labor model,” Glikes told the dealers. “You are service companies, not sales companies.”
Glikes also emphasized the growing importance of the control category in times to come, alluding to Samsung's rumored plans to embed every TV it makes with proprietary control systems. He also encouraged the dealers to focus on upping profits, saying “it's not [about] how much business you do—it's how much money you make.”
The first group session was devoted to breakaway roundtable discussions for each table of dealers, who discussed their unique processes for selling, designing and buying. Items that came up included:
• Focusing on quality over price—even to the point of outright disclosing that while the dealer is not the cheapest, it provides far better service than its lower-priced competitors
• Dealers idenitfying themselves to consumers as engineers, not salesmen
• Hiring salesmen from outside of the A/V world for their fresh perspective.
Organizing Business Growth
The first speaker of the day, Frank White of industry marketing firm Weld2, gave a presentation entitled “Grow Your Business in an Organized Way” that presented best practices for organizing local integrator companies such as those of Azione dealers.
White compared organization charts for differently structured businesses, indicating the ones that had less overhead—and frequently fewer employees, or more streamlined structures—were better positioned for profit.
He stressed the importance of hiring the best people, given the investment of time and capital involved, saying “It takes six months to work in new employees and immerse them in your culture.”
One suggestion that came up from an Azione member was to bring in apprentices from local trade schools in the same way companies use college interns to boost manpower without impacting the bottom line.
White offered the following formula that integrators should keep in mind: it probably takes four to six employees per $1 million generated by a dealer—roughly translating to two field techs, one lead tech .75 of a sales/design person, and one or two additional staffers.
Maximizing Builder Relationships
Next was a panel discussion featuring Azione dealers Scott Benkendorfer of Captive Audio, Ltd.; Rocky McCarthy of Starr Systems Design; Mark Ontiveros of Audio Images; Bill Charney of Advanced Home Audio Inc,; and Don Dixon of Definitive Electronics. Covering the topic, “Builders—How Do You Find Them, Compensate Them and Keep Them Happy?,” the panel members disclosed how much business they thought was generated for their firms through associations with builders. For most, this figure was in the 50 to 60-percent range, although Dixon felt around 85 percent of his business came through builders.
While the panelists generally agreed that associations with builders was beneficial and important to their businesses, they stressed cultivating relationships with the right builders, because working with some less functional ones could be an unproductive nightmare.
“We would rather be working more jobs with a particular builder—getting that relationship and trust with them,” Dixon stated. “I don't know that I'd want any new business with any more builders.”
But while some builder/integrator relationships can be successful on an ongoing basis, others can just be a drain. “The worst builder will find the worst client,” Benkendorfer said. “We're trying to cull through those builders and find new ones [to replace them].”
One strategy echoed through the panel that has helped grow relationships with builders was to perform installs at the builders' own homes offering products and service at a discount—or at cost—as a professional courtesy. This goodwill can be strengthened by sending an invoice showing the discount, Dixon said—even if it reads “zero.”
The panelists also discussed building similar relationships with interior designers and architects to gain additional referrals and business.
The RGBY Model
Business coach Peter Sieffert—who has consulted with Azione dealer member Cantara—gave a presentation entitled “RGBY” that broke an optimally functional structure of an integrator down into four color-coded components:
• Red—represents the back office (as red indicates operating costs)
• Green—revenue (as the color green represents money)
• Blue—strategy (as blue indicates blue-sky thinking or other business philosophies)
• Yellow—culture (as yellow evokes a highlighter, or the highlights of a company)
“The most energy is typically put into red and green,” Sieffert said, “but it should be put into Y and some G.”
CEDIA Rep Assesses Top Trends
Glikes kicked off the vendor welcome session, as the dealers were joined by reps from Azione's vendor companies, with an interesting piece of gossip.
“There's a rumor that Azione and HTSA are talking,” he said. “That's true. That conversation may be over. I don't know. … That could be interesting.”
Related story: HTSA to Hold Technology Forum