Mix it Up with Audio/Video Services

Oct. 9, 2014
How to add more revenue opportunity to your residential security offering

Audio and video services are an attainable growth category for security dealers looking for new business opportunities; in fact, many of the traditional audio/video (AV) and automation companies have roots in security integration. The category is as hot as ever and shows no signs of slowing — so how can a security integrator make the leap into providing AV solutions?

A great starting point is understanding the shifting landscape of the AV and automation space. It is an exciting time, with new consumer hardware and services popping up regularly. Solutions like Sonos, Nest, AppleTV, Roku and Chromecast all signal continued “consumerization” of AV products. Solutions that historically required extensive pre-planning, design and engineering with expensive equipment and implementation costs can now be purchased and installed for a much lower price. This has opened the market to new customers as well as educated them on the joys of distributed audio and streaming video.

Picking your Offerings

With a growing pool of customers and solutions to offer, you will need to determine what your product makeup should include. There are obvious category leaders for many of these products, but some systems integrators may choose to make buying decisions based on distribution channels and product availability.

While these new products come at lower price points, are easier to install and increase your serviceable market, they also present challenges for AV integrators — including declining product margins and revenues that typically come with widely available consumer electronics. AV integrators are learning to capitalize on their time and knowledge as well as create new recurring revenue streams through product offerings which reinvent their business and serve to offset the declines in margins and top-line revenue.

Simultaneously, consumers are becoming increasingly educated on the many advantages of new technology and the experiences of high-quality audio/video. The high-end AV markets have undergone a resurgence in the past few years, as customers who initially purchased entry-level equipment look to upgrade their experience.

The beauty of high-fidelity/high-resolution audio and video, outside of the jaw-dropping performance, is that it often carries a healthier profit margin. These technologies can also lead to customer interest in total systems integration and bring automation and additional services — such as security — into the conversation as well.

The Network Connection

The majority of new consumer electronic devices all rely on network connectivity. AV integrators are having to master a new trade by becoming network savvy. In fact, AV technicians are finding that networking skills are virtually a requirement for their daily job.

Any security integrator who is considering adding audio/video services must also recognize that they will be learning quite a bit about network engineering and information technology. As a result, a security integrator should also consider Information Technology as an additional growth category once they become more firmly grounded in this discipline.

Training and education does not end with the network infrastructure — audio/video systems come with their own unique set of required skills. Determine which technicians should be trained on these new solutions and immerse them in the technology by sending them to manufacturer and trade group training and conferences. Invest in some of the actual hardware the technician will be installing so that they can take it home and get familiar with the setup, programming and operation of the system.

It doesn’t stop with technicians — the sales team will need to become comfortable speaking confidently and intelligently about these solutions to customers and prospects who have likely already researched the available options.

An invaluable resource for training in the residential audio/video and electronics systems space is CEDIA, the Custom Electronics Design and Installation Association (www.cedia.net). Within the commercial realm, InfoComm International (www.infocomm.org) is a similar organization, and in the Information Technology arena, CompTIA (www.comptia.org) is the leading organization. The largest technology trade show in North America is the Consumer Electronics Show (CES), sponsored by the Consumer Electronics Association (www.ce.org). Given the timeliness of this show, held in January each year, consider sending your lead engineer and sales staff to the often overwhelming but highly educational trade show.

Service & Maintenance Opportunity

All these new technologies and sophisticated electronics require proper maintenance and ongoing management. Device firmware needs regular, consistent upgrading; software licensing agreements need to be maintained; systems require calibration and proactive, rather than reactive maintenance — these are all mandates to optimize these solutions.

A clear trend in the audio/video world is obtaining recurring revenue through ongoing service and maintenance agreements. These service contracts also bring more predictable revenue, increased system reliability and better customer retention. And, service and maintenance contract revenue makes for a healthier company overall and a stronger bottom line.

Keep Learning

A final suggestion for successfully entering the realm of audio/video solutions would be to spend time learning from others. Find trade publications and read what successful companies are doing in this space. In addition, there are often dozens of regional trade events right in your backyard to attend at little or no cost — including product demonstrations, training and hands-on experiences.

Leverage your distributors and sales representatives for training opportunities and advice. Last, but certainly not least, find a peer group of others in non-competitive markets who are also adding these new solutions or have already successfully done so. Don’t reinvent the wheel — collaboration is an extremely powerful tool, so be sure to take advantage of it as you grow your business and your recurring monthly revenue.

Audio/video solutions present some challenges, but none that cannot be overcome with the right mindset. Proper planning and dedication to training and education will certainly ensure success. Take time to evaluate the options available, create a plan and realize that you can start with just a few small subsystems, such as thermostats or distributed audio, and grow beyond those over time.

Michael Maniscalco is co-founder and VP of technology for ihiji (www.ihiji.com), and served as one of the principal architects of ihiji invision, the company’s award-winning cloud based real-time remote network management solution. 

About the Author

Michael Maniscalco

Michael Maniscalco is co-founder and vice president of technology for ihiji (www.ihiji.com), and served as one of the principal architects of ihiji invision, the company’s award-winning cloud based real-time remote network management solution.