Arguably, no state was hit harder by the Great Recession than Florida. A huge chunk of the Sunshine State’s economy is built around the new home construction market. Starting in 2006, the bottom fell out of the housing market, and with it went jobs and income.
But nine Florida CE pros not only survived the roller-coaster ride, they are now thriving through a combination of ingenuity and solid business acumen. These businessmen shared 19 secrets of success with CE Pro, including leveraging vendor relationships, embracing IoT, finding niche markets to explore and much more.
1. Manage Projects Closely
CE Pro 100 integrator ETC in West Palm Beach has been in business since 1987, and now touts $14 million in sales with 93 employees and a 13,000-square-foot showroom, but owner Bill Maronet doesn’t take anything for granted.
Maronet admits he fought project managers for a long time until a colleague and friend of his set him straight.
“I started working with one builder years ago, who happened to be a great friend of mine. When we were going over the completed project he said, ‘It drove me crazy that I had to call different people to get someone to give me an answer to something.’”
Maronet was grateful in that moment because so often people don’t want to rock the boat, but his friend’s advice drove Maronet to change his thinking and he immediately hired a project manager.
“The truth is when you’re out in the field, the builder’s project manager wants one single point of contact. Yes, you can give him a list of people’s names and numbers, but the truth is that list is buried deep inside of his desk drawer somewhere. What he’s always going to end up doing is just walking straight over to someone physically on the job.”
2. Embrace IoT
A hot debate of late has been whether to embrace DIY, IoT (Internet of Things), and the like, or remain true to just high-end custom installations. On this, Maronet has strong thoughts.
“You should embrace all these people who are doing DIY and interested in IoT. Why would you not? You can put your head in the sand but the world is going to move on,” he says.
Maronet describes what so many dealers’ attitudes are to change. Instead of adapting, they have an attitude that says, “We’re hot stuff, we don’t do it that way, we’ve always been doing it this way, and we’re going to keep doing it this way.”
He notes, “The truth is that CEDIA was started by a bunch of long haired ponytail guys who did stereo stuff. That’s the truth of it. There was a great market for what they did and they were the ones who started this thing.”
Maronet believes IoT is the future, and soon everything will be controllable. “IoT is our salvation. IoT will make our business. It’s really shortsighted not to embrace technology.”
3. Get Some Rest
With such a large company, Maronet is relaxed, calm and unassuming. What is his secret? Maronet points to a book, Rest: Why You Get More Done When You Work Less.
“I read it and immediately bought a copy for one of my salesmen who’s a workaholic,” he says. The lessons from the book hit home when he was on a family vacation in France, and he was growing impatient with how long the infamously slow lunch service was taking.
“It was taking a really long time for them to bring out the different courses. I realized in that moment of frustration though that I was with my family. There was no reason to be frustrated. I didn’t have anything else to do and the trip was taken so that we could spend time together. As Americans we’re taught to always be on the go. The problem with that is that you miss the now.”
Three more tips from Maronet:
- Don’t become too dependent on a sales force.
- Don’t associate yourself with controlling partners that could kick you out of the company.
- Grow organically and hire good people the minute you find them, even if you don’t need them right then.
4. Be the Expert
David Frangioni started playing the drums when he was 18 months old. When he was 2, he was diagnosed with retinoblastoma, which is a rare cancer of the eye. As he grew up he often felt lonely.
“I found music as a refuge. I got real serious about the drums and immersed myself in understanding music. By the time I was 12 I was playing in bands in Boston clubs with my brother’s fake ID. By the time I was 16 I had played a couple hundred gigs. At 16 I caught the technology bug as a means to make the drums sound better, because it was the early to mid ’80s. I fell in love with technology.”
Frangioni then formed his own music technology consulting company, and by 1989 he was Aerosmith’s in-house engineer. He did engineering for acts like New Kids on the Block, Sting, Elton John, Marc Hudson, Big Boi, Styx, Paula Abdul and Ozzy Osbourne.
By the late 1990s Frangioni still thought home automation “sucked.”
“There was no way I was going to ask anyone to pay me for it. But then I met [projector maker] Sam Runco, and he produced products that I felt like I could genuinely offer in a home theater,” he recalls. Today, Audio One in Miami has more than 100 employees and racked up over $8 million in sales last year.
“We’ve been able to figure out how to deal with the most busy and successful people who want A/V in the world. If I don’t think it’s good enough for me and not solid and reliable, I don’t want to sell it,” he says. “If you’re a world-class chef, I trust you’ll know what to use if you’re making me spaghetti. You’ll know what brand of pan to use, you’ll know what kind of tomatoes will be in season. That analogy is how I approach clients. When you buy Audio One, you’re buying my team, not a certain product. … That’s the brand.”
5. Do Right by the Client
Diego del Pino started his first business, APS Security Systems in 1992. By 2009, clients were asking if he could run speaker cables, and that turned into installing speakers and the launch of Audio Video Excellence (AVX) in Santa Rosa Beach. Eight years later, the company employs 39 people and brought in more than $4 million in revenue last year.
“It may sound like a cliché but we’re honest, hardworking, and we always do right by the customer,” he says of the keys to success. “So many times I’ve realized that you might lose money but you’re really winning money. Meaning, I’m willing to lose money on a deal if that’s what’s right for a customer.”
He describes a recent incident in which a salesperson quoted an outdoor installation project to a client, but forgot to include some requisite products. Instead of possibly making the client uncomfortable, or even upset, by asking for more money, del Pino opted to order the extra products at no cost to the client.
The company focuses on security, A/V and outdoor projects, which is a portion of the business that del Pino says has quadrupled this year.
6. Adapt to Changing Market Dynamics
According to del Pino, the Miami housing market is booming, and his company is seizing opportunities. “We have more 1 percenters here than the average American city because Miami has become a destination for people to have fun. We have finance, the arts and shopping … plus incredible beaches.”
He estimates that 75 percent of the Miami area knows how to speak Spanish. “It’s almost like the capital of South America. Right now a lot of high level executives in Brazil and Venezuela are moving their own capital around and starting to relocate their families here because of current conditions in their own country.”
7. Leverage CEDIA Membership
One of del Pino’s key sales tactics has been involving himself within the trade network community and leveraging his CEDIA membership for continuing education. “The reason I’m a member of CEDIA is because I believe in the professional ecosystem of the company. They’re trying to promote our industry and make it better. With AVX, one of our distinguishing marks from all the trunk slammers is being a CEDIA member. Only serious businesses are a part of CEDIA,” he comments.
Using that outreach education enables AVX to forge relationships with various other trade partners, which account for 20 percent of the company’s annual business. Those partners include a furniture store, Italian kitchen store, two Realtors, and around 30 interior decorators.
8. Target Niche Markets — Like Marine Installs
For 14 years Eric Roy Jr. has been the co-owner of Fort Lauderdale’s AVIA, which attributes 80 percent of its business to marine installations. He’s recently started to put forth much more focus on his new adventure, Caribbean Custom Electronics, located in Anguilla. “We’re the only Crestron-certified dealer right now in the Caribbean.”
He’s currently working on the The Reef by Cuisinart, a golf resort and spa being built in Anguilla that’s owned by the family who also owns Cuisinart, the home appliance company. Roy also is trying to get Crestron more market share in the Caribbean.
“One-off projects that U.S.-based dealers do there often turn into problems, because there’s no one there to fix it when things go awry,” he says. “So we’re trying to support the existing community as well as bring in new clients.”
9. Emphasize ‘Custom’
Roy focuses on the custom nature of his business with potential and current clients. Instead of being treated like an A/V guy, he’s aimed to be viewed more like an architect or interior designer. AVIA has to submit custom proposals because there are so many things that could affect the cost.
“For me, the ultimate goal is success on the project, not profit. If we’re successful, they’re going to tell their friends about it and then they’re going to call me. When I sell AVIA, I’m selling the people who work here,” he says.
Roy tries to impart on potential clients that he has a team of professionals who have a lot of experience, and that that experience should be their primary concern when selecting an integrator — not the overall cost. Roy sees himself as an advisor above all else.
“People have no idea what we do when it comes to A/V and it’s my job to lead them down the right path, and prevent them from going down paths that will harm them in the end,” he says.
10. Focus on Designers, Architects
Revenues at Innovative Lifestyles in Naples are up 12 percent this year. How?
Owner Greg Biehl uses the example of how he just landed a 35-home project with a builder. The two were connected via a referral from an interior designer. In fact, Biehl works with about 25 interior designers, and three architects. He finds that working with them is a lot more productive than builders.
“They [builders] are difficult to deal with. When it comes to coordinating schedules, and updating schedules, communication is a big deal, and I’ve run into some trouble. Last week we got a notification that they failed an inspection.”
He likes working with his designers and architects, who aren’t looking at the bottom line, he says. “They’re looking at the finish at the end and how are things going to look. That’s what we care about.”
11. Leverage Vendors
Biehl has been a Crestron dealer since 1994. That relationship has helped him gain more commercial clients, though his business is mostly residential. At the same time, he always utilizes what Crestron gives him to work with.
“I attend Crestron summits and that’s always money well spent. As dealers we go and discuss where Crestron is at, what they’re doing and what we need from them. Last time we needed more marketing material and more diverse kinds of material. They’ve listened.”
For his part, Biehl’s loyalty to Crestron has turned into a business strategy.
“A lot of companies try to be everything to everybody. These dealers will have four to five control platforms. How are you going to be the very best at all of them at the same time? For any dealer that’s going to be a tall order,” he says.
12. Pursue RMR
“We use Ihiji and it works really well,” adds Biehl. “Just this past week we had a notification that a whole bunch of devices went offline which all tied into one network switch and it basically showed me what was happening. I emailed the client and they were out of the residence. There was probably a power outage for 30 minutes because of a thunderstorm, and we had to physically go turn them all back on. If we didn’t have that service the client would have come back to a non-working system, and had to go through the hassle of calling us.”
To generate more RMR, Biehl uses Connect Ninja, which allows him to connect to individual devices to make any changes that need to happen remotely. He’s also taking advantage of Honeywell’s RMR program for security systems, and currently has 100 accounts set up.
13. Optimize Your Website
Biehl has a custom-made website that generates nearly 30 leads per month. This year he’s gotten 10 clients from his website. While that might not sound like a lot, he estimates that those clients have generated his business an additional $240,000 in sales — well worth his $10,000 investment.
14. Explore Motorized Shades
You might think with the sun beating down on the Sunshine State, every integrator is installing motorized shades. Biehl started selling shades in 2005, and now the category accounts for 35 percent of his business. The product line fits well in the southwest Florida market, which has mid-level homes in the $500,000 to $600,000 range, and custom homes in the $1 million to $5 million range.
MORE GREAT INTEGRATOR TIPS, PAGE 2
{pagebreak}
15. Nurture the Next Generation
For 19 years Miguel Gomez ran his business alone, but that changed two-and-a-half years ago when his son, Sebastian Gomez, finished college at Elon University in North Carolina. He was an Exercise Science major, and got drafted by the New York Yankees.
Unfortunately, a shoulder injury derailed his plans, so he came back home. According to Miguel, Sebastian fell in love with working for him right away and loved the technology. He started by completing wiring on projects and eventually worked his way up to overseeing entire projects.
He’s now the in-house Lutron, Savant and Vantage programmer and vice president of Audio Impressions.
“My generation has a big advantage with tech,” says Sebastian. “iPhones were just coming out. I’m very good with technology. I’m a specialist with Apple. My father is an old-school guy but he realizes everything is going more modern. He is getting with the times.”
In 2016, the company celebrated its 21st year in business and finally surpassed the $1 million dollar mark in sales. This year Audio Impressions is up 30 percent and has 27 projects ongoing. Gomez is hoping to clear $1.3 million this year, with 40 percent of that referrals from other contractors or builders, 40 percent from interior designers, and the rest from architects.
16. Focus on Niche Markets
In 1981, a young Les Stephenson walked in and got a job at Bryan’s Music in Tallahassee, Fla. He eventually became a salesperson then a co-owner, renaming the store MusicMasters. The 13,000-square-foot store houses instruments to buy, private lesson rooms, a repair center, and a massive sprawling basement that has thousands of pieces of equipment waiting to be rented.
When they first opened there were four other competitors in town. Now all that’s left is MusicMasters and a Guitar Center. How did MusicMasters survive the death grip that did in every other retail store? Stephenson calls it, “Divine intervention. To sit here and say we figured out all this stuff? No, we didn’t.”
One thing is true, Stephenson is a master of adaptation. If a client comes in asking for something that MusicMasters doesn’t do, he finds a way to take care of it for them.
In the 1980s music was changing within the church, which was primarily what led MusicMasters to pro A/V. People from churches would come in and say, “Is this something that you can do?” Stephenson’s answer was always, ‘Yes.’”
The company became successful because it “wouldn’t quit till it was good.” Churches eventually led them to jobs at commission chambers and courtrooms.
“There are so many brick-and-mortar challenges, which is why there are very few stores left like this. But we realized that we had to adapt to the culture or we wouldn’t be here,” Stephenson says. “When the online world broke out, people started coming in and having us turn instruments into what they should’ve been in the first place. That was an adjustment, but we want to do the best for our customers so that they do come to us for all their needs.”
Despite the many challenges, the diversification of inventory and services is what’s kept MusicMasters successful, with a healthy number of employees at 25. Every August, when schools are back in session the demand for music instrument rentals makes his store look like a “Chick-Fil-A at lunchtime,” he says.
Simplex Integration
17. Target the Broader Mid-Market
Robert Johnson of Simplex Integration in Miami certainly does things to the beat of his own drummer, but it works. Last year he pulled in over $2 million in sales. For example, Johnson calls RMR “generally a scam” and built his new model showroom in his parents' new home.
Even though Johnson believes the middle class in Miami is disappearing, he has focused on it with Crestron Pyng as his go-to option.
“We do quite a bit of Pyng here because not everyone can afford a full Crestron system. It’s a relatively easy system to get up and going. It allows us to cater to certain clients that we weren’t able to cater to before and allows us to broaden our market,” he says.
“This industry overall is getting hard. We have to be more creative in our sales tactics because of the fact that everyone has a phone. Everyone has an app and we have to teach people that one remote is better than eight remotes. In the same way, one app is better than eight apps.”
18. Build a Great Showroom
In the 1980s Swiss audio manufacturer Goldmund made the decision not to come to the U.S. but to go conquer Asia. The company has built a strong brand there, with products being displayed in high-end Asian department stores next to Hermès. The evolution that Goldmund had in Asia has led them to decide to start conquering the U.S.
Juan Sebastian Hoyos of 1 Touch AV Solutions in West Palm Beach is now the owner of the first fully equipped U.S. “Certified Home Cinema Store” in America, which took over $2 million dollars to equip. There are additional ones similar to it in New York and Los Angeles, which are “Bespoke Lifestyle Products Distributor.”
Working with consultant Jakub Paszynin, Goldmund vetted many integrators before selecting Juan Sebastian Hoyos to become its first dealer with a Certified Home Theater Store.
Hoyos is thrilled to have been chosen: “Their entire product line is made by hand in Switzerland. When I’m selling sound, my objective is to take you somewhere else. I can do that with Goldmund times one thousand. I’m so happy to share this experience and showroom with people because only a handful of people will actually experience this level of quality in the world.”
Hoyos is a patient dealer and believes in planting customer seeds that may take as long as one to two years to ripen.
“We believe in making the long term your short term,” he says. “Eventually all that work you put in works, and you’re closing deal after deal after deal. Right now we have three prospective clients, one who already has his drawings in.”
The next project for the U.S. market is Goldmund’s invite-only “season opener party,” happening sometime this fall. The objective is for the showroom to look and feel like a home instead of a retail store. From there, Hoyos will present the showroom to customers in small organized sessions. In addition, opera concerts and real live art exhibitions are planned to be hosted in the showroom.
19. Create a 4-Step Sales Process
Zack Clark, owner of C Global in Port Charlotte, relies on a four-step sales technique that he’s honed.
First, during the “rough” phase of the project, where the bare framing and construction is still in full swing, Clark walks through the site with his clients, deciding on where the electronics will be placed, etc.
The first time Clark ever did a rough walkthrough with clients and a designer, he got to the bedroom and recommended an expensive surround-sound receiver specifically to the husband. The wife instantly was not enthusiastic about the idea. They then entered the master bathroom and the designer recommended an $8,000 claw-foot tub which the wife immediately took to.
That’s the moment Clark realized, “I have to sell to the couple, not just the husband. I’m not just selling them electronics, I’m selling them a lifestyle. If you’re marketing to just the husband, you’re not doing yourself any justice whatsoever.”
Clark’s second step in his selling process is walking the client through the project a second time when the project has reached the six- to 12-month mark. Often, a vendor will have already come out with something new or will have updated a product, so Clark uses that as an opportunity to reevaluate and possibly upsell them.
The third step in Clark’s sales process is near the completion of the project and proceeds after the project has been completed. He talks with clients about the way they want to use their house and how they want to live. He also is a keen observer of how they approach life, and how technology intersects with that. From those observations he’ll often make suggestions for improvements.
Early on in Clark’s career a mentor said, “You’re better off hitting 12 base hits than one home run.” Clark’s proposals now range anywhere between 10 and 60 pages, and everything is line-itemed. He makes it a point to explain to them why it’s there, and prides himself on honesty.
He also always writes out three different options within his proposals. “I give all my clients a good, better, and best scenario. It takes a lot more time to do that, and give the client more options, but 95 percent of the time they’ll choose the ‘best’ option,” he says.
Because of Clark’s reputation, he is constantly having to turn down jobs because he doesn’t have the staff to manage it.
“I’ve been running the numbers and it might be time for me to double down,” he says. “The thing I worry about is my quality of life. At the end of the day, I could make $10 million a year but am I going to be a slave to my office chair with 100 employees? I still want to enjoy my life.”
Johnnie Sanchez is the founder of Johnnie & Co., a marketing and website-development firm serving the home-technology industry.
