Custom Installation – Made to measure

Tough market conditions call for tough action but is expanding your bricks and mortar business into the custom installation sector (CI) a wise idea? In theory the move is an obvious one, a natural extension to the service for which independent retailers are already famed. But the road to CI success is littered with casualties; new entrants from retail that moved too fast or simply too far away from their core business. Conversely, some of the most successful CI operations have grown organically out of high-street show rooms – Sevenoaks and Audio T being prime examples. So why have some succeeded where others have failed?
“Retailers are ideally positioned to move into offering a custom installation service but they need to proceed cautiously,” says Armour’s Custom Installation category manager, Ashley Hutchinson. “It is very tempting to take on a £20,000 installation project on the request of a loyal customer, but that is letting the tail wag the dog. Go in to this arena unprepared or untrained and the project will take weeks or months longer than expected, eroding both the profit and the customer’s good will.”
Approach with caution
Clearly the retail model, even with added value delivery, installation and set-up, is very different from the CI business. CI is essentially ‘project management’ whereby everything from the chosen hardware to the colour of emulsion on the walls at final fix stage are all small jigsaw parts of the bigger puzzle. If you implement a retail strategy to a CI project and start with the hardware, then fitting the parts together to make a whole picture becomes difficult if not impossible.
“You need to take a technical, commercial and project management approach to succeed in CI,” iterates Hutchinson. “You are selling your time and expertise rather than product, so you cannot base your CI product strategy on margin. Choose the wrong product and the additional hours, days or even weeks it takes to get the system running smoothly will soon negate the profits.”
Custom install is all about profit-per-hour rather than profit-per-sale and re-structuring a retail business to accommodate this is the biggest hurdle retailers face when moving into the CI sector. It is vital to enter the CI space by gearing your inventory, supply chain, staff skill-sets, logistics and admin to the task long before you break plaster on the first project. The key to assembling these business strengths is knowledge and experience – which are easily available through training.
Express train
In the UK, two companies lead the way in CI training – CEDIA and Armour Home. The Custom Electronic Design and Installation Association is the definitive CI industry association with over 4000 members worldwide and more than 400 in the UK. The continued growth of the association and its trade shows, both at home and internationally, reflects the increasing demand for the multitude of new services and technologies designed for the modern home.
No longer does custom install mean just simple AV systems with in-wall speakers and hidden cables. The gamut of these home projects now covers everything from high definition home cinema and multi-room entertainment, to intelligent lighting control, security, home-networking, home-automation and HVAC (heating, ventilation & air conditioning). Even the garden offers scope for installation, with facilities such as automated watering and lighting systems growing in popularity. Not only are many of these technologies likely outside of the traditional retailers’ remit but also the task of integrating them as whole-house solutions with a single, unified user interface requires skills in wiring, data-management, networking and programming. All these facets underline the need for effective training in advance of taking on any CI project.
“The CEDIA Education programme continues to underpin the expertise and credibility of CEDIA members working in the building industry today and is much more than attending the odd training course,” says CEDIA UK education manager Peter Aylett. “The training modules are all about delivering real benefits and establishing clear, objective standards for the required skills and knowledge. That’s why CEDIA Professional Certification is such a core part of the education programme, allowing certified designers and installers to be recognised as the most qualified in the field.”
The CEDIA Professional Certification is awarded after completion of Installer Level I & 2 or Designer Level 1 examination. CEDIA-certified professionals must then take a minimum number of Continuing Education Units (CEUs) to maintain certification through regular training over a three year period.
Armour’s Hutchinson is very much in favour of training in advance of entering the CI market and warns against a reactive approach: “In an increasing number of cases, without the skills in the first place you cannot even tender for a project. Or worse, once you have won a project you have no idea how to match the requirements of the longer established trades working alongside you. Once the first project has been won, it is too late for training and all too often the first project earns little or no profit in these circumstances.”
Toe, water
Whilst full certification for many CI newcomers is the likely long term goal, taking part in the CEDIA education programme is an ideal way of finding out about the industry and discovering whether a retail business can adapt to work within the sector. Courses for newcomers run at the annual CEDIA UK Expo and principally at the association’s dedicated training facility at St Neots, near Huntingdon. The newly developed ‘Introduction to the UK Custom Installation Business’ course is a two day taster which provides a comprehensive overview of the custom installation sector, taking in the technical, sales and marketing fundamentals of the industry.
Similar entry-level courses, as well as a wide range of advanced CI programmes, are also available through Armour Home. As a distribution company, more than 40% of Armour’s business is done within the CI sector and it supports the business with both product-specific courses, such as Systemline, and on integrating them into complete CI projects. The Armour Training Academy is fully CEDIA accredited with many modules counting towards CEDIA Continuing Education Units. Courses are run in the company’s flagship £100,000 training facilities at the Bishop Stortford head office – or even out in the field at retailers’ premises if circumstances demand.
Armour’s Ashley Hutchinson comments: “There is a lot more to the custom installation market than simply learning about the products. It is not scaremongering to say many dealers’ future survival will depend on their ability to understand new technologies and the tools involved in the CI market. What they need today is the knowledge and confidence to take the first step and the Armour Training Academy is the ideal vehicle.”
Given all the above caveats and need for advanced training, the independent retailer still has two key assets that give him a head-start when moving into the CI business. The first is existing familiarity with the core technology around which most CI projects are based, namely projector, LCD or Plasma TVs, satellite receivers and home cinema surround sound systems. The second is the shop itself. Not only does a bricks and mortar store offer customers the opportunity to see key components in use before they are installed in their home, it affords a great deal of customer confidence in the company as a whole – critical for securing bigger budget projects.
The individual client spend on a typical custom installation project can be considerable. Six figure sums for whole house AV and automation systems are not unusual. The greater the bond of trust between installer and customer, the more services a client is likely to buy. A neat, well-appointed, modern showroom speaks volumes about the company’s reputation and abilities, giving retailers the upper hand against those moving into the business from electrical contracting or other building disciplines.
Put yourself in a clients’ shoes; If you had a large sum of money to spend on a CI project in your home, would you go with the guy who turns up at your door with a laptop and a clutch of brochures or with the retailer who demonstrates all the suggested products in his reputable, well stocked showroom?
Success story
The advantages of being an established retailer along with a clear CI business strategy and commitment to staff training has certainly paid off for well known Hi-Fi and AV retailer Audio T. This CEDIA member still sees some 80%-90% of its business through its retail branches across the south of England but has recently opened Audio T Custom to cope with the growing demand for custom installation services.
Dave Adams, Audio T Custom’s sales and marketing director, explains, “The custom install side of our retail shop had grown so much I needed to concentrate on it full time and this lead to the formation of Audio T Custom.  The company has its own offices where we can talk to architects and clients, and a workshop where all of the equipment can be programmed and tested before going into customers’ homes. In addition to meeting the needs of the clients from the local Audio T branch in Epson, Surrey we receive leads from other shops in the chain.”
It’s a similar picture with CEDIA member Sevenoaks. A national franchise with almost 50 stores, Sevenoaks has been operating in the custom installation business for around five years. “Our stores are all very different, with some of the most successful being pro-active when it comes to custom installation,” explains Ian Barnett, Sevenoaks’ regional franchise manager. “Many of our staff have been on CEDIA training courses and learned a lot about the custom installation business as a result.”
Around 20% of Sevenoaks’ business is now custom installation based and this figure is steadily growing. “Technology is moving very quickly,” says Barnett. “It’s no longer about selling dozens of black boxes to a predominantly male audience. We have to find ways of making the home entertainment experience more discreet for a family market.”
The face of independent retail is gradually changing. Continuing price-erosion in the CE market, the uncertain economic climate, and the rise of Internet and supermarket shopping means that trying to make a living shifting boxes on price alone is no longer viable. Adding value has always been the independents’ strength and custom installation can be considered as the ultimate value-added service. It takes a clear strategy, commitment and training to succeed, but as Armour’s Hutchinson says: “For new CI projects, the traditional retailers’ customer-facing experience, premises and reputation give them a very significant strength.”