I'm On The List

  • Systems integrators have historically focused on two groups for project opportunities-the consultants and the end-users. Across all branches and as the base practice of most AV associations, the central push has been towards building strong professional relationships between these groups. With education and certification as the selling point for many integrators, consultants and end-users have been able to scientifically recommend integrators to the general contractor who is managing a project. But what happens when the general contractor buys an entire project, and gathers bids only from integrators they have worked with on previous jobs? This trend is becoming more prevalent, and has systems integrators across the country struggling to change the way they market their companies.
  • As building projects swell, more and more general contractors are buying the entire project, including plumbing, security, HVAC and AV, on large-scale, multi-million dollar designs. Previously, general contractors have shied away from the AV portion because they didn't know enough about it, and they relied on consultants and AV architects to tell them who were the best companies available. Working with them more often, the general contractors have become familiar with the integration community. As both a means of keeping costs low and working with someone they trust, general contractors often bid a job out to companies they have worked with before, occasionally in addition to companies suggested by a consultant, then negotiate integrators down to the lowest price.
  • David Goldenberg, vice president of ACE Communications, has noticed this process increasing since 2003. As an integrator, he has found that unless he's on the general contractor's bid-list, he is losing major projects. "This is the new face of the AV industry," he explained. "As long as the general contractor owns the projects, those are our clients." As a result, ACE has had to restructure their sales and marketing strategies to become more visible to the general contractors. By eliminating sales positions that deal exclusively with end-users and having a small number of consultants or liaisons who work directly with general contractors, they have become more visible with their target market while keeping costs down, often enabling them to come in lowest on a bid. "We don't call on end-users anymore," Goldenberg explained. "It's easier for me to have one or two people spend more time with general contractors than spending time with consultants, who we still have to spend time with. There are still some projects they have a say in, but I see their role diminishing over time."
  • While creating relationships between general contractors and integrators is significant towards gaining business, the general contractor still needs to weigh the quality of the companies they hire. Accepting the lowest bid regardless of the certification and training of a company is bound to occur, but is a catch-22. For a company to provide the lowest bid, should they save money by not paying to certify their employees? And if a general contractor saves money by hiring a company who is not up to date on their certifications, how can they expect quality work? "Bigger general contractors know that taking the low bid has a risk associated with it," said Chuck Wilson, executive director of the NSCA. He feels the most qualified worker may not always offer the lowest bid. "What I would like to see," he said, "is that we raise the bar, not race towards the bottom. We're working with the design community to help illustrate to them the value of a competent systems contractor."
  • "You've got to educate the general contracting community as to what our industry's capabilities are," Goldenberg said. "And then my job is to educate my general contractors, the ones we work with regularly, on the kind of work we do."
  • The positive result of this emerging structure is that a relationship between a systems integrator and a general contractor can yield more job opportunities down the road, while the likelihood of repeat work for an end-user is slim or improbable. These days most large building projects have some kind of AV work related to them, and if a general contractor has a certain integrator on their list, the potential for work is greatly increased. Obtaining that business by being on their radar creates many new challenges throughout the industry, but could prove well worth it in the end.