Experts argue that upselling to existing customers is a great (and relatively easy) way to grow business. And when it’s done right, AV integration firms not only benefit from increased revenue, they also earn the status of being their clients’ trusted partner.
The process of upselling has its risks, however. Jay B. Myers, speaker and author of several books including Rounding Third and Heading for Home: The Emotional Journey of Selling My Business and the Lessons Learned Along the Way, argues that if a salesperson is perceived to be squeezing the client for more money by pushing them to invest in a more expensive system that they don’t believe they require, the entire project is at risk. “While [upselling] is a Sales 101 strategy, you’ve got to be careful with it because it can be misinterpreted,” he said.
Myers, who sold his AV design and integration firm Interactive Solutions Inc. (ISI) to AVI-SPL in 2018, prefers a consultative sales approach. He argues that this can lead to upselling opportunities because it focuses on not only the client’s present-day needs, but what they will require in the future. “You certainly don’t want to limit a customer because you want to keep your numbers at a certain level on the proposal, but you don’t want to make the decision for the customer by trying to upsell without talking to them. You’ve got to have an open dialogue and listen to what their needs are,” he said. If the client is growing quickly, it’s likely there will be upselling opportunities linked to infrastructure so that they can scale up easily when the time comes to expand existing systems.
Charmaine Torruella, GMS account manager at Verrex, said that existing enterprise-level clients are prime candidates for upselling simply because of their size. While an integrator may be working on a project with one relatively small group in the organization, that company may have multiple subsidiaries and business units that are also looking for AV solutions. She calls this “becoming viral” within that client’s organization: while you may be working with the technology team on a specific project, there may also be opportunities generated by the marketing team and other departments. “Certain business departments and units have their own budget that no one else can touch, and they decide how their technology should look—and they need different types of technology, 9 times out of 10,” she said.
[ Where Does AV as a Service Fit in the Industry’s Future? ]
Torruella cited one organization she worked with that had 210 different business units. “When they came to me for streaming solutions, they didn’t have the ability to survey their 210 business units, so I offered to do the survey for them.” This got her “viral” within the larger enterprise, she said. “That’s the first step in upselling: become viral in terms of your communication, and get permission to go into the environment and learn more about the different business units.”
One error salespeople make is trying to solve problems that the client doesn’t have or doesn’t view as important, noted Brock McGinnis, CTS, principal of Avitaas Consulting and Advisory and vice president of sales and operations at Nationwide Audio Visual. He also observed that AV firms sometimes promise too much. “[An increasingly common error] is trying to extend reach within a customer organization by [falling into] the ‘Oh, I’m pretty sure we can do that, too’ trap by offering systems and solutions the integrator has little or no experience in,” he said. He cited examples of AV integrators offering things like electric blinds, window film, lighting, Wi-Fi enhancement, networking, access control, or security cameras—areas that are usually handled by specialists. “Personally, I think these are high-risk endeavors unless the integrator is acquiring businesses or personnel who already have the experience and expertise.”
For McGinnis, it’s much wiser to take advantage of opportunities related to an AV integrator’s core competencies. He said that the hybrid work model is providing many inroads for AV firms to engage with their current client base. “Fortunately there are huge opportunities right now in reconfiguring and reallocating existing AV assets for use in different places and different ways as offices and meeting facilities are reconfigured for hybrid work,” he said. “The hardware revenue isn’t as significant as selling all-new systems, but the profitability of properly managed services revenue will more than make up for it.”
Julian Phillips, senior vice president, global workplace solutions at AVI-SPL, argues that it’s time for the AV industry to move away from a transactional business model, where sales opportunities—upselling included—are linked to individual projects. “The real opportunity is to build a relationship [so you’re] able to get the customer to buy in to services and solutions that we’ll sell them that might be small initially—and so there isn’t really an immediate upsell/cross-sell—and have a strategy about growing those revenues through utilization and optimization,” he said. A three-year AV-as-a-Service contract that brings in $10,000 a month is actually worth $360,000 … and then comes the upsell. “My real opportunity is to grow that $360,000 to $3 million by sharing the value of what that software is doing for the organization and expanding it in the enterprise, and [proposing] some cross-sells and other features that expand the utilization and value.”
[ Shifting to an OpEx-Based AVaaS Model ]
This model requires AV companies to invest the time in qualifying the client up front. Are they a growing organization? “Because I don’t want to just hop around doing $10,000 deals for everyone—yes, we might want to do $10,000 [at first], but it has to have the potential to be $300,000 a month,” Phillips said. “We, as integrators, need to adopt that model because that’s the consumption model that most organizations are going to want to move to.”
Like Myers, Phillips, and Torruella, McGinnis believes that the best approach to uncovering upselling opportunities is by making the effort to get to know the customer’s business. “Smart upselling is a process of looking for and discovering problems that need solutions,” he said. “That means becoming an expert on your client and getting to know their operations, workflows, challenges, and opportunities. It also means getting to know multiple people—or stakeholders—within the organization, not just the ‘client.’”
Opportunities for Now and the Near Future
Continued distancing requirements in the physical workspace will require systems integrators to take a different approach to the deployment of AV, UC, and collaboration technologies, according to Brock McGinnis, CTS. He noted that huddle rooms, for example, are being replaced by flexible open spaces, necessitating wireless, mobile, and combined solutions. “Clients are looking for direction and solutions they can implement quickly, easily, and cost-effectively using as many existing AV assets as possible,” he said. “We, as integrators, need to be just as flexible in how we approach the challenge.”
AVI-SPL’s Phillips noted that the hybrid work model has emphasized the importance of providing both on-site and remote participants the same high-quality experience—what he refers to as “meeting equity.” “If we are going to accept that the world is hybrid and that people need to meet and collaborate, we need great equity of experience, which ensures that everyone can be seen, everyone can be heard, everyone has access to the whiteboard, and everyone can share their documents,” he said. “We have to design the collaboration experience to deliver that wherever you are.”
Click here to read more stories from the July 2021 issue of SCN.
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