Survey Says… “It isn’t a TOILET”
I recently wrote a piece regarding TaaS, or “Toilet as a Service”. The point I was trying to make is that most of the people that use AV in their work consider it a fixture. AV is like a table and chairs or the air-conditioner. It is just a part of the building…like a door, or even a toilet. It is there, they use it, wash their hands, and go about their day…
My silly article made me think a lot about this rush to turn AV into something other than an object that arrives by UPS FREIGHT on a pallet. Why do we want to turn an appliance into a profession? So I did a little research.
First I looked on the internets using “Google”. I chose Google over Alta-Visa and “Jeeves” on a whim. What I found was that some surveys say less than 2% of conference spaces are video enabled. Other surveys say less than 6%. I guess both of those can be true at the same time. Although these are interesting BS garbage statistics put out by people trying to sell some cheap plastic junk, it was not what I was looking for. What I was actually digging for was what percentage of rooms that had video stuff in them had somebody paid to make sure they work.
My supposition is that we work in an industry that is so bad at selling extended service contracts for the stuff we make… we are so very, very bad at it that we have to turn the whole thing into a service. The only way our industry could figure out how to get some recurring revenue is to pretend our stuff is something it is not.
“See this black box with blinking lights and cords plugged into it? It actually isn’t a box. It is a service!”
I have been renting office space for over 20 years. That means I have been paying for HVAC maintenance contracts for 20 years. I’ve never given it a second thought. I often buy extended warranties on my vehicles. There was even a time I had a “pool guy”. So I have been polling my customers on their service contract attachment rate. So here is my statistic.
“According a study published by the Research Firm Aska-Fewdudes, less than 10% of AV integrators have sold service contracts on purpose.”
Some of the integrators really get the recurring game. I remember one of my first trips to Google. I was so excited to meet a real Google person with a real Google badge. As it turned out, my contact did not work for Google. He worked for one my integrators as an embedded part of a service contract. At the time, I just shrugged and continued my sales pitch on mic-stands or power strips or whatever I was selling at the time. It was interesting, but not enough to make me stop thinking about my sales quota or my cell phone bill.
But now that I have owned this little company for a couple decades, recurring is sort of a big deal. My hair is grey and my back hurts. And in our AV world, that is most of us right now. Most of us have been in this game for a while. Many of us are closer to “what is next” than we are to the time when we started. And for those of us fortunate enough to have some sort of equity in where we work, recurring revenue makes that equity have actual money value. And by actual money value, I mean money you get and can use to buy actual stuff.
Equity is really cool. “I am the OWNER” is pretty fun to say. But a company’s value is exactly only what someone else will pay for it with money. That is the only real value number that means anything. If you have a company that has contracts that have some future money in them, it is at least as valuable as the profit from those contracts. It isn’t complicated. But if you are a dude hanging up TV’s, you might make a great living…but ain’t nobody gonna buy a job from you. That is unless every time you hang up a TV, you get $2 a month to make sure that TV always is on HDMI-1. Think about it. Hang up 1,000 TV’s and you’ve got something somebody might buy….hmm. $24k a year to make sure the TV turns on.
It isn’t ridiculous. The same folks that have coffee service definitely have no problem paying someone to make sure the boss doesn’t flip his freaking lid before the big board meeting when the TV won’t turn on HDMI-1.
I know it is not that easy…but nobody ever lost a customer over asking them if they were interested in an extended service contract. “How DARE you offer me a valuable service, you slimy AV sales SCUMBAG!” It isn’t that hard. Worst case: Punch in the face. Best case: A few points to the bottom line on this job, and probably a few points on this job for a bunch of years.
And what if you DON’T have any equity in your place of business. Why should you bother to increase the value of your boss’s greedy-fat-portfolio? As someone that aspires to have a portfolio, I would say that people that bring me recurring revenue get paid more than the other people. Lots more… and when I am looking at vacation calendars, bonus pools, all that happy stuff, those folks that are actually contributing to making my life and my future better get SERIOUS consideration. And if your company doesn’t high-five you to heck and back when you land a big service contract? Teach them or find another company. The one you work for might not be the best.
So, is AV a service? Nope. It is stuff. But is service something that people want and are willing to pay for? YES. YES IT IS. YES THEY ARE. People want the TV set to HDMI-1 and they are willing to pay YOU $2 to do it RIGHT NOW!
So, if you own a place or work at a place that isn’t selling service contracts like you think it should, pick up the phone and call your Farm rep. Between the sixteen of us, we know a little bit about contracts, service, and how to get people to pay for it. Think about what a rep firm does. We are under contract to perform a service for our factories. And some of us might have some previous job experience that involved selling and executing AV service contracts. Ask us. It is our mission to help. It is how we encourage you to use our stuff. And today, tack a few points on to the next gig you pitch for the first year of extended service. See what happens. You might just get punched in the face!