There is no doubt that the economy is stagnant. Everyone in Washington, along with the GOP candidates are pointing their fingers at each other, blaming everyone and everything, except themselves. We all know that this is the worst economy since the great depression. But, like with all market downturns, companies consolidate, diversify and aggressively promote their business.
Infocomm reported a 30% decrease in attendance for the training sessions, which is a big indicator that business is weak, because companies tend to cut their training allowance, all though training is critical to an integrator. Fall behind in training, and an integrator will see problems crop up when business picks back up. When business is slow, this time should be used to get as much training as possible, learn about new technologies and plan for the future.
This is also a good time to diversify, especially if your key market is home theater. With 14 million people out of work and many more worried about their future, there are fewer investments in home theaters. Many large corporations are investing in technology so that they will be ready for the economic upswing, which they are hoping will happen in late 2012 and 2013.
Corporate business appears to do better in a down economy than the residential market. Construction, that was started, must be completed. Many corporations are cash rich, but are not spending their reserves until they see the economy improve, while others are using that cash to expand.
Aggressive integration companies know the value of marketing. Many of them will maintain their sales force even when sales are slow, and to support the sales force, they increase advertising.
Don’t stop advertising! People have short memory spans and you need to keep your name out there. Companies that advertise during a down economy seem to fare better than those that do not. Evaluate your advertising. Don’t just advertise in the yellow pages. Review newspaper and magazine ads. Are they giving you a return? Have you tried advertising with the local cable company? Many have good rates. Advertising in good and bad times must give you a ROI. Move your advertising around until you find a source that will give you a good ROI.
If you don’t have a web site, create one and make sure that it is listed on referral sites for your city. HomeToys has a free listing for Integrators. Fill out the registration form and your company will be listed on this web site where it can be found by our readers.
Research shows that most customers looking for a product or service on the Internet use search engines like Google, Bing, ask.com, Yahoo!, AOL, DirectHit, and Netscape. Invest in key word research so that you can identify the key words that searchers use to locate integrators.
Integrators that wish to thrive in this business environment must look for the opportunity that the downturn represents and not dwell on the potential financial challenges. This is a very competitive industry. Why not plan to take market share from your competition, rather than huddle in a stagnant niche?
If the down economy gives you extra time, look for factors that motivated your customers in the past. The old saying goes, 20% of your customers give you 80% of your sales. Who are your 20%? What services or equipment did your best customers buy? Your potential prospects will resemble your top 20% customers. Do some research and find those prospects that resemble your key accounts.
All though many business decisions are made logically, the commitment is usually based on emotion. You need to have the buyer feel good about the decision to use your services. Stress the benefits, not the equipment. Communicate the things that will enhance the buyer’s life.
You might have heard this before, “Marketing is an investment, not an expense.” Marketing takes a steady effort over a long period of time. Do not start advertising and then stop and then start again. Be consistent.
Monitor your budget and stick to it. Stretch your money by looking at the utility, phone, gas, and rent payments and see if you can consolidate and save. When you see “the light at the end of the tunnel,” start investing on equipment and people.
Many small businesses, offer special “off-season” pricing, which covers your overhead, and keeps the doors open, while paying your good talent so you do not have to lay them off. They just might not be available when business picks back up.
Email all of your past customers. Thank them for their business and let them know that you are still available to expand on what you already sold them. Make the email a newsletter to get their attention. Show brand loyalty in the email, by letting your customers know that you still sell Crestron, Lutron, Paradigm, Smart Home, Somfy or other manufacturers. Ask the manufacturers for advertising co-op money and run a small ad in your emails for that product.
Do not make the emails long. Put no more in them than what will fill their screen when they open the email. Most importantly, do not “spam.” I know that it takes more time, but send each email just to one person, not your entire email list. Otherwise, your emails will wind-up in the recycle bin. Companies, like Constant Contact, can help with email promotions if you feel uncomfortable doing this yourself.
Contact your local newspaper, business journal or local trend magazines and send them press releases, or get them to feature your company as a local institution with pictures and projects that you completed. This is “free” publicity.
According to InfoComm International, system integrators have laid off 23.6% of their work force. Do not let your most experienced people go, especially if you have to outsource the help, which 19.5% of the integrators did. Work quality could be compromised.
Start an intern program. Interns could be your future and your experienced techs can train them. The interns will gain industry knowledge, while you save on high-priced employees. When your business picks up, these interns will make good employees.
If you are short in personnel, stagger the work hours so that you will always have someone available for a tech call or to answer the phone. Offer unpaid leave. If an employee has income from a spouse, they might not mind taking some time off, knowing that you’re not laying them off. 13.6% percent of the integrators have cut salaries or benefits. Ask your people for suggestions how they think that you can increase business or slash expenses rather than cut pay. You might get some good ideas that can be employed in the future as well as in the present.
25.9% of the integrators have vacancies, which they do not plan to fill any time soon. If you need office help, hire a temp worker. Just use that person for the times that you require office work done, when you do not have the time to do it yourself. A temp worker comes with no overhead, and if you don’t like that person, you can ask the agency to send a replacement. If the temp does well, you can employ the temp when you start hiring again.
During bad economic times many small businesses pull back, sometimes too far. Benefit from their withdrawal and push your company forward. Don’t forget the military, video conferencing and higher education. These market segments are still buying, but we might see a slight decline in higher education, as enrollments have peaked. Video conferencing is strong, as companies look for ways to reduce travel costs. All military equipment has taken a beating while in the Middle East, and they will be making replacement requests, as the brigades return and upgrade equipment. Electronic equipment and sand do not mix well.
Even in a down economy, people and companies still buy. They just make more conscientious decisions, and do more comparison shopping. If they believe that they need a product or service, they will buy. It is up to you to take advantage of these opportunities.
(Note: Figures come from InfoComm International Market Research Survey)
Len started in the audio visual industry in 1975 and has contributed articles to several publications. He also writes opinion editorials for a local newspaper. He is now retired.
This article contains statements of personal opinion and comments made in good faith in the interest of the public. You should confirm all statements with the manufacturer to verify the correctness of the statements.