One of the most pressing questions in MI retail — a question that was asked in countless conversations throughout the Anaheim Convention Center during The NAMM Show — is “How can a music store compete with online giants like Amazon?”
Unfortunately, there is no easy answer to this question. But that doesn’t mean there are no answers. Here at the Music & Sound Retailer, we’ve asked this particular question to retailers, manufacturers and other industry insiders many times throughout the years, and the answers all seem to converge on one central idea: You need to offer your customers what the Amazons of the world can’t. And, when it comes to the realm of pro audio, there is a ton your store can offer that a website can’t. Maybe you’ve already heard all about the bottom-line benefits of pro-audio service offerings and you’re interested in getting into small-scale audio system installs and rentals, but you just don’t know where to begin. With this in mind, we asked music retailers who have had success in the pro-audio market, as well as representatives from pro-audio-focused industry organizations, for some tips on how you can get your own installation and rental business off the ground.
For starters, The NAMM Show offers a wealth of educational opportunities for music store owners who are interested in the pro-audio market. “NAMM is the platform for dealers who are already doing business in this space, or thinking of entering it to find the right products, expertise and training to be successful,” said NAMM president and CEO Joe Lamond. “This segment is growing quickly, and I suspect learning more about the opportunities for their own business to take advantage of this growth might be one of the most important decisions a dealer makes this year. I imagine there are many NAMM member retailers who have been in this space for quite some time. They will see a much larger presence of the leading suppliers and an expansive education track that understands their challenges and will lead them to the latest technology solutions and best practices for implementation. For others who are just starting to think about this, The 2018 NAMM Show is the ideal environment for them to find products and training to get up and running quickly.”
Zach Phillips, NAMM’s director of professional development, pointed to the new AES@NAMM program and The NAMM Show’s TEC Tracks as prime opportunities for music store owners to learn more about pro audio. “The AES@NAMM program alone has multiple tracks, including the Line Array Loudspeaker Academy, Live Mixing Console Academy, Entertainment Wireless Academy and In-Ear Monitoring Academy,” he said. “Then at TEC Tracks, there will be sessions like Optimizing Acoustics for Small Rooms and several sessions covering audio for houses of worship.”
Step One
Before you begin to offer pro-audio services through your music store, you should consider whether you want to be involved in rentals, installations or both. Rentals involve maintaining a stock of complete sound systems to loan out to clients on a temporary basis, usually for one-off events, such as plays or concerts. Your responsibility will include maintaining the rental system, delivering and picking up the system components, and, potentially, providing a technician to run the system. Installations, on the other hand, are intended to be more permanent solutions (although they will eventually have to be updated as time passes and technology advances). These projects involve physically installing the audio equipment in a given space in accordance with an audio design that will maximize the listening experience for audiences and provide a good user experience for anyone using the system. Whichever path you decide to pursue, you are likely to see a return on your investment.
Tuscaloosa, Ala.-based Eat My Beats has seen positive outcomes from both rentals and installations. “Rentals now account for 8 to 10 percent of our income, with a much higher margin than retail, since you can rent the system for years and make money, and then sell it as used when you are ready to,” said Matt Ray, owner of Eat My Beats. “We started getting into the installation market — mainly churches to start with — about five years ago. Installation now accounts for 25 to 30 percent of our sales and continues to grow each year.”
Offering these services has also had a positive impact on other areas of Eat My Beats’ business in the form of referrals and recurring revenue. “Installations have allowed us to get to know almost 70 percent of the churches in our area,” said Ray. “It has allowed us to build trust and relationships with the music ministers and their praise bands. It has also allowed us to offer training classes periodically to help them stay up to date with some of the newest gear out there — digital mixers, etc. We will train the tech team first, then attend a praise team/choir practice to tweak the system and save some settings for them. We also are there the first Sunday after installation, and sometimes the next one, too, if needed. We are always a phone call away, and have at least one guy on call 18 hours a day.”
Prioritizing pro-audio services has also yielded positive effects for Jeffersonville, Ind.-based Maxwell’s House of Music. “The impact we’ve felt by offering to rent gear short-term or design a permanent system has been huge,” explained Maxwell’s resident tone guru Mike McAfee. “We service our installs if needed, and provide onsite training, so end users get the best performance for their investment. The loyalty leads to repeat visits, referrals and community recognition. I truly believe our willingness to walk through our client’s door on their schedule is half the reason we’ve become the go-to place for installations. We often hear that clients have called bigger stores and never been called back, or they found the dealer to be disinterested after hearing the planned budget.”
Once you decide on the scale of your pro-audio business, the most important first step is hiring the right people to design, install, maintain and run your systems. Unfortunately, it can be hard to find experienced technicians because their skills are in such high demand. For this reason, one of your best options may be to work with what you already have and train your current employees.
“Look within first. We have always tried to promote and create growth from within,” said Ray. “We have done some social media ads, but have not really had great luck with those. It’s hard, especially when you are just starting to try and get an installation business going, to be able to afford someone — so it almost has to be someone you have, or who can work retail, too. People skills are huge. You not only have to sell the product, you have to sell your company and what you can do to add value to the client’s business, church, etc.”
McAfee echoed the importance of people skills for installation projects and rentals. “I believe strong people skills are a must for this,” he declared. “Our business needs more than a body, and so do our clients. We can train someone on how to install and demonstrate equipment, or write an order up, so I look for people who truly pay attention to me and our clients. More times than I can count, we’ve heard that the previous dealer didn’t seem to understand the client’s needs, and we will never be accused of that.” He also offered some practical advice for finding likely candidates for your installation business. “Our biggest success with installation hiring comes from the home improvement/handyman job field,” he said. “These people have hands-on experience with face-to-face interactions, deadlines and budgets, and are usually great communicators.”
If you decide that your best option is to train your existing staff on how to install, run and service these systems, then there are several resources available to you in addition to those offered by NAMM. Most pro-audio manufacturers and their reps offer training on specific products, and some even offer certifications that your employees can earn as proof that they know how to install and service specific systems.
Look to Trade Groups
Commercial AV industry organizations like AES (Audio Engineering Society, aes.com) and AVIXA (Audiovisual and Integrated Experience Association, formerly known as InfoComm, avixa.com) offer their own training materials and courses. AES hosts two AES Conventions per year — one in the United States and one in Europe — and AVIXA hosts the InfoComm tradeshow, the largest annual gathering of AV professionals in the U.S., as well as several international events.
“For companies starting out in pro AV, AVIXA has much to offer,” said Brad Grimes, AVIXA’s director of communications. “As the largest global trade association for the industry, AVIXA offers training, certification, standards, market intelligence and, of course, tradeshows around the world. AVIXA also offers community. We represent the entire value chain, from manufacturer, to dealer and distributor, to consultant, to integrator and installer, to tech managers and end customers. It’s a tightknit and supportive community. A music retailer broadening its offerings can engage the entire supply chain through AVIXA and build relationships that will drive success.”
Earning pro AV certifications will help your store’s employees stand out from the crowd. Having certified employees is also a surefire way to assure your clients that they can expect professional-quality results. AVIXA’s certifications are considered the gold standard in the commercial AV market; not only do they offer certifications in audio-related disciplines, they can also teach you everything you need to know about video display systems, unified communications, networked AV and related fields.
AVIXA has also recently started offering a certification program for basic skills, in addition to its more comprehensive certification programs. “One of our newest programs is microcredentials, which teaches and verifies basic installation skills — pulling cable, terminating cable and mounting equipment,” explained Grimes. “For companies and professionals just starting out in installation, this can be an efficient way to establish a skill base and earn a digital badge that can be shared through electronic communications to demonstrate a level of professionalism. It’s a good first step toward more advanced recognition, like the AV Technologist Certificate and, of course, the Certified Technology Specialist (CTS) designation.”
He added, “AVIXA started the CTS credential more than 30 years ago for a variety of reasons. One was to establish a high level of professionalism for the industry — trained CTS holders demonstrate a proven aptitude for general AV skills and knowledge. That’s important for customers looking to hire an installer who can do the job right. Another reason was to ensure that professionals doing AV installation and design were operating from a shared base of best practices; that they’re integrating audio systems in a way that ensures the best possible experience for customers.” AVIXA is also instrumental in designing standards for the commercial AV industry, and offers training materials to ensure your systems are in compliance with these industry standards.
If you’re worried about complying with AV industry standards, there are third-party consultants and organizations that focus on the commissioning of AV systems and quality assurance. Some of these organizations offer compliance checklists that demonstrate to your clients an adherence to industry standards throughout the installation process. James Maltese, in addition to being a senior academy instructor for AVIXA, is also president of Audio Visual Resources Inc., a third-party AV commissioning consultancy, as well as a board member of the Association for Quality in AV Technology (AQAV), which promotes the AV9000 standard and offers business training to its members.
“AVR is largely known for its third-party testing and commissioning services. We are hired by clients to thoroughly test their systems to make sure they are completely installed,” explained Maltese. “However, to do this effectively, we need to keep our hands dirty, so AVR offers third-party engineering services, as well. If integrators require a technician or field engineer for a particular job, and they don’t have the need or time to hire someone, they can tap AVR to provide a trained and equipped AV specialist for a limited time. We are the ‘007s’ of the AV industry, assuming different integrator credentials daily. Several integrators use AVR to augment their team during their busy seasons.”
“AQAV is where you can get trained on the processes required to run a successful AV business,” Maltese continued. “They don’t teach you how to design or install AV. They do teach you how to have processes in place to make sure the AV systems you provide are done correctly. The CQD (Design) and CQT (Install) trainings teach participants how to make sure their designs perform as intended, and how to make sure their installs are done right the first time. There is also a CQL (Leader) training that deals with instilling quality business ideals in organizations from the top down. Basically, if you want to be profitable in AV, get involved with AQAV.”
Maltese offered his own words of wisdom for music retailers looking to expand into permanent installations and some suggestions on starting points for training and certification. “AVIXA/InfoComm is the standard resource for introducing people to the AV industry (Quick Start to the AV Industry Online and Essentials of AV Technology), as well as how to design (CTS-D) and install (CTS-I) systems,” he suggested. “They provide the best avenues for bringing someone up to speed quickly on industry terminology and best practices. Retailers can round out their training with manufacturer trainings and on-the-job experiences.”
Of course, in addition to making the right hires, pursuing certifications and ensuring compliance with industry standards, you should also make sure your store is well stocked with the most popular pro-audio equipment for rentals and installs. “Our bread and butter for rentals have been powered speakers and wireless mics,” said Eat My Beats’ Ray. “For installations, we stock a lot of powered speakers, digital boards, digital snakes, wireless mics, racks, power conditioners, and bulk cable and connectors.”
Maxwell’s McAfee provided a similar list of must-stock products. “Powered speakers, wall mounts, mixers and cabling are must-haves to keep in stock and are the most requested equipment for installs,” he said. “For rentals, we see the most requests for lighting systems and powered front-of-house PA.”
All About Research
If you’re looking for a thorough breakdown of the popularity of product categories in various vertical markets, AVIXA provides its members with access to a wealth of industry research on sales trends, conducted annually. “We offer in-depth research into the pro-AV market,” explained Grimes. “Depending on need, it can represent a significant investment, although AIVXA members are eligible for discounts on market research. We continue to build out our market intelligence offerings, but our AV Industry Outlook and Trends Analysis is a major piece of research that offers sales forecasts and analysis of customer markets and solutions sets across a breadth of opportunities. For anyone new to pro AV solutions and services, it can present a substantial introduction to the market.”
Finding clients for installs and rentals may be difficult at first, but retailers can tap into their existing client base to start with and run some promotions through the store.
“We have never really advertised that we do installations,” said Ray. “We do now have ads on a couple of work vehicles and trailers, but most of our business comes from some other church or business recommending us. We have some digital signage up by our front counter that plays through pictures of some of our installations and production/rental events. This has definitely started many a conversation that leads to checking out an audio problem at a local church or business.”
“We send letters to churches twice a year in our surrounding area that provide an overview of the services we offer. In the immediate area, we call for appointments or walk into churches and schools. This has led to more installs than anything we’ve done,” offered McAffee. “I’m a big believer in cold calls; I make them regularly to businesses, churches, funeral homes, etc., to introduce myself and our company and ask if we can come in for a visit. You’d probably be shocked at how many invite us in to talk! Not all lead to sales, but it allows me to begin our relationship, and that’s never a waste of our time. We also utilize all social media and our email database to make sure we leave no stone unturned.”
Once you start generating some project leads, don’t be discouraged if the scope of some of these projects seems like more than your store can handle. There are third-party organizations like AVR that can help, and most manufacturers have access to a network of reps, vendors and contractors that your store can collaborate with. “We are lucky to have a partner that we can team with in the instances we feel are above our comfort range,” said McAfee. “This partnership doesn’t happen often, but when it does, we deliver top-notch service and gear, and that’s what the client is concerned with. We also take advantage of our vendors’ experience when we have questions or want suggestions on how to provide the best result for our clients. Our industry is blessed with individuals who are willing to share.”
As you build your client base and start completing projects, there will be plenty of opportunities for recurring revenue. Maltese provided some suggestions for repeat business opportunities to focus on. “Recurring revenue strategies have always been a great way to balance out the ebb and flow of project work. However, they have to provide value to the users because it is very easy for a client to stop those recurring payments if they are not seeing returns,” he explained. “Maintenance plans, or service level agreements, are a step in the right direction. You can think of them like AV system ‘insurance,’ where you are paid a monthly fee to keep the systems ready for business. This may include preventive maintenance visits to catch issues before users notice them. It may also include reactive maintenance or ‘break-fix,’ where you are on retainer to fix any issues that pop up within a certain time frame (within four business hours, for example). This can be a little tricky to price without knowing what level of support is required. However, the potential recurring revenue and the ability to review the contract on a yearly basis make the risks worthwhile.”
“Another potential source of recurring revenue is to be put on retainer for general AV services,” Maltese added. “The user can buy a bank of hours of your time. If they need additional training on the use of a space, or they require an operator standby, instead of going through the entire procurement process for every visit, they have a bank of hours they can deduct your services from. Setting up minimum hours per visit might be wise to maintain profitability, but being seen as a trusted partner that is available at the drop of the hat is great for recurring revenue, and to keep your company top of mind for any AV needs that might pop up.”
Armed with these tips, as well as the resources available through NAMM and other industry organizations, you should be ready to take your first steps into the installation and rental business. And, if your store already offers pro-audio services and you want to share your experience, the Retailer wants to hear from you. Email us at avargas@testa.com.