10 Really Important Questions For A Top Home Integrator

Ambiance Systems, a roughly $2.5 million high-end home integrator in Clifton Park, N.Y., has been on a roll lately, pulling in seven high-profile installation awards in the last year alone, gaining national media attention through creative marketing, increasing service and product sales with existing customers, and implementing new technologies to gain incremental business. Marc Leidig, CEO and president, and his wife, Jennifer, director of marketing, recently spoke to Digital Connect Editor Jeff O'Heir about the state of the home integration industry.

CRN: You recently dedicated one of your best employees to focus on selling services, particularly calling upon past clients to see how see if they need new products or upgrades. How has that been going?

Marc: We've been doing it with purpose, but it's been kind of a soft launch as we've been transitioning the team around. We have a lot of ideas on how to expand it. But just making the commitment to do it has been fantastic; we've seen huge rewards from doing it.

CRN: What are some of those rewards?

Marc: I'd have to say it's a new revenue stream we're finding from that existing clientele. Just interacting with old clients or people that have bought old clients' houses; the new sales opportunity starts right there. That has been enormous.

CRN: Any way to gauge the success through increased revenue?

Marc: From a revenue stream, things have really taken off over the last three months. Are we reaching out out of the goodness of our hearts? No, but it's good PR and good service to reach out to clients. It has uncovered a lot of untapped revenue streams. When we opened it up to him we told him your job is to ask people how things are, what are your needs. Once you start talking to clients, you start uncovering that they were thinking of upgrading something and they didn't even know we could did it. You don't find those things out without having some constructive dialog with people.

CRN: What kind of upsells are you making through those existing clients?

Marc: He did about $100,000 in revenue in a single month. And he has about 20 percent of our overall sales just for this year. During that month, the $100,000 was essentially from three clients. One client was somebody who had purchased a previous client's home where we put in a nice home theater. The new client ended up buying a surround-sound system up in the bedroom with a plasma with a mirror over it. The woman is now mapping out all the different things she wants to do, including another plasma downstairs in the living room. Had we not contacted her, she probably would have went to someone else. Number two was an existing client where it was time to upgrade his existing system. He had done a media room with a projector 10 years ago. So we upgraded it to a new DLP projector with HD, and we're updating a family room where you're watching two plasma TVs.

Number three was a client who had called us in about three years ago to fix a system done by another firm. We originally approached him to do that job but he thought we were too pricey and had someone else do it. Anyway, when we contacted him in January he told use the batteries of one of his touch screens were dead. That lead us to replacing his media wall. We took out a rear projection TV and stacked two 61-inch Runco plasmas and flanked it with two 32-inch Runco LCDs. This all started with a bad battery.

Jen: There are a couple of lessons there. I would say a good 25 percent of our business happens because we had to go in there and fix other people's jobs. Again, we have certified technicians and we have to push that. We're in an industry that has no licensing, so the consumer, unless they do their research, is hiring people who might not be specialized.

CRN: What's the biggest concern you have about today's CE (consumer electronics) and digital home industry?

Marc: This industry has a lot of growing up to do. I find everyone is jumping into this marketplace: electricians, IT guys, retail stereo stores, etc They're beginning to dabble in AV installs, some are getting into networks, some are getting into home automation. In a lot of ways it's a train wreck.

CRN: What needs to be done to increase awareness across the industry for the skilled, professional integrators that provide proven technology solutions throughout the home markets?

Marc: Fundamentally the industry has to shift on a different level of marketing. One of the things I've been saying to our top vendors like Crestron and Lutron is that you've got to get your product line into a situation of where the kitchen industry is today compared to 20 years. There are a lot of models the industry can look at. But what the kitchen industry is plugging for is the kitchen should be 30 percent of the value of your home. It's brilliant.

We're trying to do the same thing, but we're out there by ourselves on this. We're trying to tell people, look, you're going to be looking at technologies that are anywhere between five and 15 percent of the value of your home. Five percent will give you a smattering of technologies with a modicum of coverage and 15 and above will give you total coverage throughout the house. Homeowners don't understand that. But, boy, they've bought into this kitchen thing for the past 20 years. The consumer is demanding stainless steal, they're demanding fine woods and granite countertops. Clearly all those products have become objects of desire, and physically their kitchen will be used less than it has in the last 20 years. In our industry, statistically (the technology) is going to be used more. They're selling form a point of desire and lifestyle. One thing we really try to sell up on in our business is we are not selling technology, we are selling benefits.

Jen: I think the answer is we need a network support or campaign to get across to as many consumers as possible that 10 percent of their budget needs to go to this stuff.

CRN: Any recent shift in the type of client, demographic or home you've been serving?

Marc. We've been in the high end for quite some time. We're not seeing more higher end, but it does continue to propel itself. Every time we do something wacky and crazy and think we're never gong to able to top this, some other opportunity comes along. We are certainly trying to cultivate a more moderate end, because the high end can certainly get pretty out there. We're trying to cultivate a pretty broad marketplace in terms of the business direction we go in. Some of those high-end jobs take five, six, seven years to do. It can become insane. That's why we want to be dealing with more moderate jobs.

I'd definitely have to say that we have seen many more women really involved in the projects we're doing. We've always taken the angle that women are the most important buyer in the household, which is true. It helps that we focus on the benefit aspects of what we do, rather than on the technology

Jen: The more clients you have, the more opportunities you have for word-of-mouth advertising. It's better for us to have more clients than to have the same one for four years in a row.

CRN: What's the price range of those moderate jobs?

Marc: I would have to say $20,000 is the range where we start dropping off. Below that, we're not doing much. That could drop though because we're always keeping our eyes open. Our new sales person is going to be focused on more moderate-type jobs.

CRN: How will you change your solution or product offerings to tap into the more moderate jobs?

Marc: One of the things the manufacturers are doing is coming out with more modestly-priced products. Runco's got projectors now at $3995. Crestron continues to come out with smaller-end processors and less expensive touch screens. Their Adagio line is a great example; we're all over that. Lutron is another one that has come out with great packages over the years. They've dropped the price so we've been able to offer services to a broader range of people. The nice thing about that from a business point of view is that you're increasing your relationship with a partner you've selected years ago, you're now doing more volume with them and you don't have to learn a whole new product line.

CRN: Has there been any major shift or trend in the industry that has caused you to do anything differently.

Marc: We've focused on home networking for some time, providing hybrid networks and wireless solutions. We embraced that a long time ago, whereas I know a lot of people in our industry are scrambling to get up to speed with that. We've done a pretty good job at formatting it so it's easier to deploy. We're using a lot of remote management. What's interesting is that there is obviously a focus on these new companies that are doing these IP-based solutions, and we've taken a slower approach to embracing them. What we have been doing is utilizing existing lines like Crestron and Lutron and we are setting up the network so we have remote connectivity to all those products. We can manage all of them remotely for all our clients. We've taken a very conservative approach to companies like Netstreams, Sonos and Control 4. We have installed a Sonos system in our house. It's a great system. It could be a contender for our clients. We're keeping an eye on Control 4, but I used to be a PHAST dealer so there's baggage there. We're taking a wait and see approach on a lot of different things. And I haven't had a single client come to me and say they've wanted an MCE (Microsoft Media Center) system as part of their house. I haven't done a single one.