Spring 2016
World Wide Stereo has grand reopening
ProSource Vendors help Eagle Sentry celebrate 30 years in business Great minds want to know‌ what’s so great about OLED? The 4 keys to increasing your profits
President/CRO - Consumer Technology BENJAMIN FELIX (215) 238-5310 bfelix@napco.com
President/Publisher eric schwartz (215) 238-5420 • FAX (215) 238-5457 eschwartz@napco.com EDITORIAL
Content Editor KATIE NALE (215) 238-5417 • knale@napco.com Editorial Offices 1500 Spring Garden Street, Suite 1200 Philadelphia, PA 19130 CREATIVE
Art Director albert j. Gaspari Production Manager JUNE HOLLOWAY (215) 238-5281 • jholloway@napco.com SALES & MARKETING
VP—Account Executive/Brand Director CAROL CAMPBELL (323) 871-1990 • ccampbell@napco.com Associate Publisher/Brand Director TONY MONTELEONE (215) 238-5364 • tmonteleone@napco.com Senior Director, Sales & Marketing MARYELLEN OSWALD (951) 514-0420 • moswald@napco.com Manager of Sales JENNIFER BYTOF Administration (215) 238-5218 • jbytof@napco.com Circulation Subscriptions CARRIANNE RAMSEY (215) 238-5369 • cramsey@napco.com PROSOURCE™
109 River Oaks Drive, Suite 150 Southlake, TX 76092 CEO/President DAVE WORKMAN (817) 428-5212 Dave.Workman@Prosourceinfo.com Director of Finance & Operations, JESSICA PASKON (817) 431-2240 Jessica.Paskon@Prosourceinfo.com Director of Membership Sherry Dantonio (714) 422-0747 • Sherry.Dantonio@Prosourceinfo.com Director of Business Development ANdy Orozco (714) 422-0749 • Andy.Orozco@Prosourceinfo.com
Beautifully designed for brilliant pictures. The new X940D 4K HDR Ultra HD TV offers brilliant color and dramatic contract in a super thin, easy-to-install design. Full-array local dimming controlled by Sony’s proprietary X-tended Dynamic RangeTM PRO technology gives the TV three times the brightness range of a conventional LED-backlight TV, leading to an unparalleled experience with HDR content. And, like all 2016 Sony 4K HDR Ultra HD TV’s, the X940D is IP-controllable with most leading control systems, allowing it to be easily integrated into a whole-house control system.
Director of Field Management Tim Bashford (513) 319-8228 • Tim.Bashford@Prosourceinfo.com Director of Marketing Communications KATHLEEN MARINI (708) 548-4273 • Kathleen.Marini@Prosourceinfo.com Published by: The Consumer Technology Publishing Group
Publisher of Technology Integrator and Dealerscope Custom Publisher of the 2015 International CES Show Directory, Guide and Preshow Planner, CEDIA Electronic Lifestyles®, ProSource™ Insider and HTSA Quarterly. © ProSource Insider 2015, All Rights Reserved
Learn more at sonypremiumhome.com
Install innovation. Install Sony. Screen image simulated. ©2016 Sony Electronics Inc. Sony, X-tended Dynamic Range and its logos are trademarks of Sony Corporation. All rights reserved. Reproduction in whole or in part without written permission is prohibited. All other trademarks are trademarks of their respective owners. Spring 2016
From the ProSource By David J Workman CEO/President ProSource
Building Partnerships that Make You Stronger
D
o you ever get that feeling when you have a little spring in your step? When you want to jump and click your heels in the air like in the movies? When everything feels upbeat? We hope you do, because 2015 was ProSource’s best year ever, 2016 is off to an amazing start, and this is exactly the way we feel. That’s in no small part due to you, the ProSource member. Last year, we had a record level of purchase volume with the group suppliers. It was, in fact, the largest single year of increase in group purchase volume. Members grew their businesses, and we created partnerships, like CI Edge, to help members expand further into commercial integration. We also built a great foundation to offer best-in-class support to our members. This momentum has swept us into 2016, and the year has started like gangbusters. Growth seems more organic, much like in 2015, as it comes more from within the group than externally by adding new dealers or vendors. When our members and vendors grow, ProSource grows. We will continue to help dealers grow their businesses, much like the three members who recently moved up into our PRO level program due to increased sales and volume. The Summit was where all the good vibrations manifested. In fact, the feather in our cap is the partnerships that are becoming stronger and more prevelant within the group. Both members and vendors alike have begun to really realize and embrace the fact that partnerships are what ProSource is truly all about. I’ve never experienced a ProSource event where so many folks—both members and vendors—continually talked about the valuable partnerships they have established. More than ever, the spirit of helping each other is infused throughout our group, and we will continue to foster these relationships, while we all benefit from the strength of the group. It is these partnerships that make this the best group in the industry. With that, I challenge you, the member, to pick up one group brand that you aren’t currently carrying. Whether it’s a vendor you respect but don’t use or one you may not know much about. Why? Because when we act as a group, and support each other, our group is reinvigorated, reinforced, and reiterated to the outside world. Our power as group is strongest when we act like a group.
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Spring 2016
Departments 3 FROM THE ProSOURCE by Dave Workman
6 News Welcome new members; ProSource summit reception in Orlando; Dave Workman reviews 2015; Member portal live introduction session; ProSource creates video at summit; Summit highlights; Welcome new vendors 14 DANA POINT Vendor of the Year Awards; Meeting Recap 6
22 LG OLED What’s so great about it? 26 Four KEYS How to make more money 30 NEW FACES AT PROSOURCE Meet Emily Funk and Ted Bremekamp 32 15 MINUTES WITH... Jason Baumann, District Manager, South Central 34 UP NEXT ProSource events on the horizon
Features 1 6
16 MEMBER SPOTLIGHT Eagle Sentry turns 30 20 Roundtables Sessions get revamped 24 WORLD WIDE STEREO Same company, new look
2 4
Spring 2016
5
News
celebrating 10 years of award-winning digital audio innovation
“I am thrilled to welcome these high-caliber members,” said Sherry Dantonio, Director of Membership. “They serve to strengthen our group with a skill set ranging from traditional CE/CI to IT backgrounds. Everyone benefits as the dealers share their skill sets and learn from one another.”
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2016
Welcome New Members!
2015
Once again, Autonomic revolutionizes whole-home audio for custom integrators. Stay tuned for exciting additions to the Mirage Audio System this year.
We’re proud to announce ProSource’s newest custom integrator members:
KP-6 Designer Keypads
Audio Video Concepts & Design, Inc.
Integrity Sound, Inc.,
Indian Trails, NC
Sarasota, FL
Autonomic starts shipping the KP-6, completing the Mirage Audio System with in-wall elegance, customizable control and dynamic presets.
AV Design Group, Inc.,
National Technology Integrators,
Southampton, NY
Rockville, MD
Bravo AV Consulting, LLC,
Next Level Audio & Video,
Far Hills, NJ
Farmington, NM
CommTech, LLC,
Phoenix AVS, LLC,
Pierre, SD
Broomall, PA
DB Media Solutions, LLC,
Real, LLC,
Southlake, TX
Lindon, UT
Apple TV Control Module
Electronics Professionals, LLC,
Simply Automated, LLC,
Lafayette, LA
Lawrence, PA
2006
Autonomic is first to introduce control of Apple TV with an automation system.
Greenhome Automations,
Southeaston Systems, LLC,
Miami, FL
Mt. Pleasant, SC
Mirage Control System
Home Theater Evolutions, LLC,
Westfair TV,
Sugar Land TX
Fairfield, CT
Imagine Audio Video, Inc.,
Woody’s Home,
Franklin, TX
Pasadena, CA
2013 Mirage Digital Amplifiers
2010
Autonomic launches IP controllable digital amplifiers, perfectly complementing the award-winning MMS.
Mirage Media Server Autonomic introduces the world’s first cloud-based media server, which continues to be the preferred audio source component for custom installers.
Autonomic introduces the first two-way interface to control all music on Crestron and AMX.
Stay tuned for an upcoming announcement from Autonomic:
Impact Audio Video, LLC,
MirageAudioSystem.com /2016
Ocean City, MD
©2006–2016 Autonomic Controls, Inc. All trademarks are property of their respective owners. +1 914 598 1647
Spring 2016
2008
News
A LASER SHOW LIKE NO OTHER.
ProSource Summit Reception in Orlando
WORLD’S FIRST 3LCD REFLECTIVE LASER HOME THEATER PROJECTOR.
Feedback and surveys report members and vendors saw the 2016 Summit as an overwhelming success. Andy Orozco, Director of Business Development commented, “I am proud to see how our family has grown. Vendors, dealers, staff all looking for ways to help one another succeed. It is all about partnerships, and the Summit, as well as all our events, are designed to foster collaboration in a productive and interactive format. Moreover, through this process, it is amazing to see how many of these relationships have also turned into strong friendships.”
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Craig Smolensky, Stephen Paczkowski and Donny Simmons
Todd Broussard and Gustavo Garcia of Home Theater Evolutions
Experience beyond-HD quality thanks to Epson 4K Enhancement and the added benefi ts of laser technology. Lee Travis (Wipliance), Noah Kaplan (Leon Speakers) and Ted Bremekamp (ETC)
• Accepts true 4K content • Absolute Black contrast ratio • Long-life laser light source
Jim Shapiro (Audio Video Intelligence), Sherry Dantonio (ProSource), Ryan Heringer (Sound Concepts) and Andrew Guenther (Advanced ESI)
• Expansive color space; broad color reproduction with DCI and Adobe RGB modes EPSON.COM/LASERPROCINEMA
4K Enhancement Technology shifts each pixel diagonally by 0.5 pixels to double the resolution to 3840 x 2160 and surpass Full HD image quality. Resolution is 1920 x 1080 in 3D Mode.
Jennifer LaBollita (Autonomic), Greg Simmons (Eagle Sentry) and Aaron Chisena (Autonomic)
EPSON is a registered trademark and EPSON Exceed Your Vision is a registered logomark of Seiko Epson Corporation. All other product and brand names are trademarks and/or registered trademarks of their respective companies. Epson disclaims any and all rights in these marks. Copyright 2016 Epson America, Inc.
Spring 2016
News
Dave Workman Reviews 2015 & Looks Forward
Left: Dave Workman gives his State of the Union address
Outlook is positive; IoT is a challenge and an opportunity
Bottom left: Brian and Olivia Gibson of Elite Media Solutions and Patrick Gafney of Harman Luxury Bottom: Lance Anderson (Admit One) accepts his MVP award
By Katie Nale ‘If you don’t know where you’re going, you might not get there,” Yogi Berra once said.
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His famous quote was referenced right before David Workman, CEO of ProSource, held his State of the Union address last month at the ProSource Summit in Orlando, Fla. Judging by his speech, picking a destination is not going to be a problem for the buying group. Workman used his time on stage to give a nod to 2015, as well as to share his vision for ProSource’s future, including the bumps he anticipates along the way. Year in Review
Workman started off by looking at 2015
in review, stating that the year held record volume with vendor partners and the single largest increase in purchase volumes. Workman also noted that the market wasn’t as good as it could have been, but certain areas have been doing well, including luxury and CI. He also talked briefly about the emergence of 4K into mainstream as well as the new CI-focused district management team. Year Ahead
Among the various endeavors mentioned for the coming year, the introduction of ProSource’s newly launched online portal seemed to be a topic worth coming back to throughout Workman’s address. The
portal is intended for users to look up vendor programs, member benefits and more. Live sessions on how to work the portal were held at the Summit. A focus on alliances was also mentioned for the year ahead. ProSource has two new alliances from 2015: one with commercial group, CI Edge, the other with Power Audio Video Group. The CI Edge alliance was created based on the significant number of members branching into the commercial space. The alliance with Canadian-based Power Audio Video Group was based on manufacturers focusing on the North American market as a whole. Workman also noted that the year ahead should be an exciting one for the
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TV business and that the headphone and Bluetooth categories should not to be overlooked, as most customers are now focused on the ecosystems in their homes. He went on to state that home automation networking is expected to grow a minimum of 15 to 20 percent over the coming year. Workman wrapped up the year ahead segment by stating his intent to focus on fewer but larger dealers and his intent to up the group’s educational initiatives and best practices by the end of 2016. Roadblocks to Overcome
The address did not forget to acknowledge the roadblocks the group is hurdling over, including online retail and what Workman referred to as “the elephant in the room” – the Internet of Things. Regarding online retail, Workman reSpring 2016
Spring 2016
minded the room that solution-oriented selling and the services that integrators provide are the reason people still deal with brick and mortar. “The good news for all of you is that online can’t do what you do,” he stated. “Just pushing a box across a counter with no other value added is becoming more of a challenge.” Regarding the Internet of Things, Workman said that ProSource intends to develop a strategy that makes sense in addressing the associated challenges. He stated his intention is to only partner on this strategy with those vendors who are of the mind that something is an assisted product, and not a do-it-yourself product. “I do not want to partner with brands that are going to use us as the fool so that they can sell Home Depot tomorrow,”
said Workman. Although the solution is still in development, he stated that ProSource will pick its brands carefully, while trying to understand the business model, and that there is probably a recurring revenue component involved. Awards
The address ended on an upbeat note with recognition of all 15+ Year Members as well as numerous awards including: • Highest Member Benefit Percentage in 2015: Aaron Sholtis of HiDEF Lifestyle. • Innovator of the Year: Dale Wilhelm of Bekins • Integrator of the Year: Lee Travis of Wipliance • ProSource MVP 2015: Lance Anderson of Admit One PS
News
Summit Highlights
Member Portal Live Introduction Sessions Hosted at the ProSource Summit ProSource hosted six one-hour sessions for members introducing the portal at the ProSource Summit. These interactive sessions provided a venue for question and answer as well as member suggestions for additional site enhancements. Kathleen Marini, ProSource Director of Marketing and Communications, commented, “We are about 80% to goal to have all members with at least one employee to have logged on to the site. Running these sessions did a lot to help get us to that goal. Members that haven’t logged in yet should reach out to their District Manager or contact me at Kathleen.marini@prosourceinfo.com for assistance.” The site initially launched to members on 2.8.16, delivers secure access to vendor purchase volume, rebates, programs, promotions, new product announcements and more.
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Dedicated Vendor Pages on Portal
ProSource Marketing Options for Vendors
The site includes dedicated vendor pages which aggregate vendor content to create mutual wins for both vendors and members. Great for members looking to add ProSource vendor brands to their mix, or for those active with the brand and looking to increase traction with vendor sales, marketing and training materials. These pages additionally include the vendor background, a personal message from the sales executive on the value of the group program, and key contact information.
A series of vendor pages are available on the portal and there are ongoing plans to get dedicated pages completed for all vendors. Marini additionally commented, “Now the site is launched, we wish to remind those vendors who have not completed their dedicated page yet to reach out to me, at Kathleen.marini@prosourceinfo.com, to get their page developed. I can assist in getting any particular vendor communications out to members.”
ProSource Creates Video at Summit
Sherry Dantonio and Derek Johnson of ProSource interview Peter Cook of Automation Design + Entertainment
Sherry Dantonio, Director of Membership, spearheaded the effort designed to capture member and vendor feedback on the group. The initial launch, posted on the ProSource portal has received tremendous, positive feedback. “I am very excited about our new initiative to capture event video footage. These videos will provide a glimpse into our events for our members that were unable to attend. Additionally, working with ProSource marketing, we intend to feature this video, and ongoing videos, as a way to introduce our group to prospective members.” Videos of events including member and vendor testimonials will continue throughout the year. If you have questions, reach out to sherry.dantiono@prosourcceinfo.com. Spring 2016
This year’s summit education focused on helping members overcome challenges related to managing their business processes and finding and retaining talented employees. Experts in both fields were brought in to build our most successful educational seminar line-up to date.
Featured Speakers The summit featured a number of guest speakers addressing current topics and problems faced by integrators. Speakers included:
Jim Carroll of Connected Home Advisory Carroll’s presentation, “The Internet of Things – Disruptive or Creative Technology for the CI Integrator?” focused on the impact of IoT on the current home automation business model for custom installation businesses. Emerging creative opportunities for the CI professional, including hybrid retail, mixed sales and custom business in support of the rapidly expanding landscape of technologies, were discussed.
Paul Starkey & Steve Firszt of Vital Management Starkey and Firszt’s presentation, “Building the Optimized CI Business” gave attendees the chance to look at companies on their journey to optimizing their overall performance. The session looked at a quantifiable approach to achieve higher profitability, key growth success and better company health.
Daniel Abramson of Staff Dynamics Abramson’s presentation, “Recruiting and Hiring Boot Camp 2.1” included recruiting strategies and best practice techniques to increase hiring efficiency and decrease costly turnover. The session addressed how to hire “A-Players” and what the top hiring blunders that managers make are.
Welcome New Vendors: Autonomic, Vantage and Qmotion ProSource has announced its newest vendors Autonomic, Vantage and Qmotion. “We selected these vendors because of their technology and commitment to supporting the custom integration channel,” Andy Orozco, Business Development Director for ProSource, stated. “I’m looking forward to helping each grow their market share inside of our dealer network.” Aaron Chisena, Director of Global Sales of Autonomic
commented, “ProSource is a vital part of the custom install community and joining the group reaffirms our dedication to this industry. An Autonomic ProSource partnership is a win-win for all.” Autonomic is a provider of digital media solutions, Vantage Controls is a provider of lighting and control solutions and QMotion is a provider of automated window coverings.
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Dana Point
Dana Point Vendor of the Year Awards
Vendor of the Year awards are voted on directly by ProSource members and based on the following criteria: - The vendor who, through their engagement of the group, has helped our class of trade more than others in the category. - The vendor who has shown a continued commitment to developing products for our class of trade.
Mixing Business with Pleasure
- The vendor who has allocated the proper resources to individual accounts and can be exemplified as a company that is responsive and easy to do business with. - The vendor who has had the most positive financial effect on dealers’ performance in the category. Based on the above criteria, we would like to congratulate the 2015 award recipients:
The Vendor of the Year Awards were given out at the ProSource Spring meeting in Dana Point, Calif. Award recipients included: Video Vendor
Furniture/Accessory Vendor
Performance Audio Vendor
Custom Integration Vendor
Sony Electronics Marantz 14
AudioQuest
New Vendor of the Year
Streaming Audio Devices Vendor
Overall Vendor of the Year
Sennheiser
Heos by Denon
Events included the annual state of the union address, business roundtable meetings, audio demo suites and vendor awards. Social activities included a wine and craft beer tasting, a private concert and a luau.
Control4
Headphone Vendor
ProSource PRO and Power level dealers met in May for their annual Spring Meeting at the Marriott Laguna Cliffs Resort and Spa in Dana Point, CA.
Origin Acoustics Sony Electronics
ProSource celebrates with a tropical-themed cake
John Collier, Harman Luxury; Dave Workman, ProSource; Lyle Smith, Harman International
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Bill Hettinger, HiDEF Lifestyle; Aaron Sholtis, HiDEF Lifestyle; Ken Welty, LG; Mark Major, LG; Bobby Dodge, ProSource
A professional dancer shows ProSource members some fancy moves
Matthew Campbell, Campbell Audio Video; Greg Simmons, Eagle Sentry; Lance Anderson, Admit One; Nick Berry, Origin Acoustics; Justin Johnston, Twilight Solutions
Bart Greenberg, Bose; Bob Goedken, Yamaha; Mark Fisch, Yamaha Dave Workman (ProSource), Frank Sterns (Sony), Murry Huppin (Chairman of ProSource Board), Mike Fasulo (Sony), Kevin O’Loughlin (Sony), Josh Sy (Sony), Nick Kokkinos (Sony), Gary Frankel (Sony). Spring 2016
Spring 2016
Member Spotlight
Eagle Sentry Turns 30 and Lets Their Customers Know It The group celebrated the event with the help of several ProSource vendors and talked to us about their strategy for long-term success. By Katie Nale
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For Las Vegas electronics design and custom integrator Eagle Sentry, 30 is anything but the new 20. Having spent over the last quarter of a century building and implementing a business strategy that has helped it last through the economy’s ups and downs, it’s no wonder they wanted to celebrate. And celebrate they did. We talked to Vice President Greg Simmons about how the group celebrated, who helped them do it and how they made it to the 30-year landmark to begin with. What are some of the main reasons Eagle Sentry has reached the 30-year mark?
The biggest challenge has been keeping up. In our industry, the technology changes rapidly and you have to be able to make adjustments — intelligent, well thought-out adjustments. You have to take some chances — constantly updating and rotating equipment out of the showrooms so that your showroom facility represents state-of-theart technology basically constantly. That’s challenging. You’ve got to fill that stuff up, you’ve got to bring the new stuff in. You’ve got to constantly send people to training, constantly do in-house training. It’s very challenging to be in a business that alters at warp-speed. This is not the painting industry, or the framing industry or the flooring industry. Our industry, sometimes twice a year, changes somewhat dramatically. What did you do to celebrate your 30-year event?
We decided that one day didn’t do it justice, so we did it over three days. Opening evening was a vinyl night. We brought in key people and vendors like Samantha Summerville with Thorens. We brought in high-end turntables and with our multiple twochannel show rooms, we had a great vinyl night. We had wine. We invited our customers who were interested in twochannel, (those who) have bought turntables and are interested in vinyl. We had a great night. We played music for almost five hours and customers brought their Spring 2016
Spring 2016
talking to to bring in their business. And we invited a ton of people. We had a barbecue company bring a barbecue smoker out in the parking lot. We set out tables out front. We had food, we had drinks, we had wine and beer, and again, our customers were able to tour through the same process of all of the different technologies, all of the new technologies for their home, which really gave them a significant chance to upgrade. We had existing customers who said, “Oh, I’m really interested in 4K”; “ You know what, I’d like to upgrade my system to Dolby Atmos”; “I didn’t know you guys did shades, I’d love to do shading control with you.” So it was just a great fun event, a chance for our existing customer base to celebrate with us [and for us] to thank them for their business and educate them and let them see some great new stuff.
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How did the event help you connect with existing clients?
The most significant thing that I think we gained [was that] it let basically the entire city of Las Vegas — as far as building, contractors and our existing customer base —
s
The adaption of our go-to market strategy has altered as the years have dictated. The company did a very good job navigating through different times in the housing market, good or bad. A lot of business and market adjustments have helped. Probably, internally, the most significant thing is that we built a very strong recurring revenue base of security contracts and when times get tough, people tend to be even more concerned about security than when times are not so tough. That was a big big part of us getting through the recession and surviving that period of time. I mean, ground zero was basically here in Las Vegas for the housing market crash and we survived it because of our people, we survived it because of good business strategy and adjustment, and we survived it because of that great recurring revenue base.
What have been some of the biggest challenges along the way?
own albums, their favorite albums, and we played their songs. Customers told us what they liked about the artist and how much better it sounded and that they had never really heard it sound that way because of the level of quality we were able to show. The second day, we had an open house and we did something unique, we held a Southern Nevada Home Builders Association Event. So it accomplished multiple things. One, all the builders in town, or a big portion of the builders in town, came for the event because it was a Southern Nevada Homebuilders’ event. We organized it as an educational process for new technology for these builders. Our building is about 17,000 square feet and as they moved throughout the showroom facilities, we set it up starting with networking and control and security, then shading and lighting control, and then two-piece video with Epson and Screen Innovations. As we moved around to higher end two-channel audio, we moved them into Dolby Atmos and a small theater with Dolby Atmos and 4K and finished in our large theater with full 4K Dolby Atmos where we did demonstrations for people before they left. Planar displayed video wall technology as people entered the building. So that was great. It was a way to educate the builders. What was excellent was when [the association] sent out their invitations to all the builders in the Valley, it said, “Join us for a night at Eagle Sentry’s 30-year anniversary.” So the goal was accomplished right from the invitations. The goal was just to let everybody in town know we’ve been in business for 30 years. The third day and night was customer appreciation day. We invited our existing customer base and some customers that are people that we’ve been
Member Spotlight lar consumer are always very behind in the knowledge that we as system integrators and ProSource members have. So it was a great way to educate a very large amount of people on what’s new, what’s new in building technology and where the industry is going. What new opportunities did the event present to new clients?
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know that we’ve been in business for 30 years. That was the most significant thing, the most significant benefit. That holds so much water in this day and age, especially, with as many people that went out of business during the recession here, it basically let the community know about our strength and longevity. It says a lot about your company. The second thing it did was, it really was an educational event. The builders and customers and the regu-
For the builders, it let them know that they need to be thinking about their next project. What they might need to implement as a standard or as an option, what are things that they’re not including now. For builders, the biggest benefit was to see what’s coming, to talk about future technology that’s going to help them prepare for the millennial buyer who’s coming up and buying homes. To just prepare them to better sell homes from a technology standpoint. I think for our consumer, it let them know that it’s time to upgrade. We have such a significant change now with Dolby Atmos, with 4K, with how powerful these wireless networks are now. It gave our customers the ability to understand, very easily, what they might want to upgrade to and how they want to improve their existing systems. Do you have any advice for other integrators wanting to reach the 30-year mark and beyond?
My advice at the end of the day is to build a recurring revenue base, whether it’s security, network monitoring or service contracts. Do whatever you can to build that base. It helps make you financially
... we survived it because of our people, we survived it because of good business strategy and adjustment, and we survived it because of that great recurring revenue base.
Spring 2016
strong. Take care of your people. Invest ProSource Attendees: in your people. I Luxul believe that the IC Realtime Security longevity of the Solutions employees is a key to the longevity of Screen Innovations the company. Sony And you know what? Promote. Epson Let the community Alarm.com know when you’ve Thorens been in business 5 years, when you’ve AudioQuest been in business 10 Integra years, when you’ve Origin Acoustics been in business 15 years, 20 years. Make a big deal out of those milestones because they’re huge. Celebrate and have fun. Make it fun. Make people want to come to the event. Make them want to come to your showroom. Make them really get a kick out of walking out of your building with a smile on their face. PS
The goal was just to let everybody in town know we’ve been in business for 30 years.
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Roundtable The New Roundtable Sessions ProSource roundtable sessions rolled out a new format in Orlando this spring, giving attendees more room to be heard and more say in the future. By Katie Nale It was easy to hear the excitement in Lani Godfrey’s voice when asked about the roundtable sessions ProSource held this year at its Orlando Summit and Dana Point Spring Meeting. Godfrey, ProSource’s South Eastern District Manager, talked excitedly about the new direction the roundtables had taken and how the new format will continue to allow them to develop organically. “We really wanted it to be a little lively, a little fun,” Godfrey said, which makes sense, considering the updated sessions have a renewed focus on dealer interaction. 20
What’s New
Starting at the Orlando summit, the schedule of the roundtables changed. The sessions started with dealers giving introductory presentations, which served as examples of the topics to be discussed. Members could then ask questions before each table of dealers was given time to discuss the topic in depth. Seating charts are now used to put people with similar scopes at the same table to heighten discussion sessions. Arguably the most important change, however, is that feedback is now collected from members in order to shape future roundtable topics and agendas. According
to Godfrey, the new sessions are now constructed so that feedback from participating members will help determine discussion topics for future sessions. “We literally took all the feedback documents to guide what the courses are. Those feedback documents decide classes and topics as we go forward, whether they will be used in a roundtable session or whether we hire someone like a Ron Callis of One Firefly,” Godfrey said. What’s Next
The progressive effect of dealer feedback was evident just months later when feedback from the Orlando summit was incorporated into the Dana Point roundtables. According to Godfrey, the big takeaway was the need for more interaction time at individual tables, and moving forward, steps will be taken to ensure there will be. In terms of what’s on the table for next time, Godfrey compared the progression of courses to the way college level classes progress from basic overall training to indepth focused studies. “If you think about college courses, you have English 101, English 201 and 301. Some of these courses will kind of keep walking the path of what’s the next level and what’s the next step….” According to Andy Orozco, ProSource’s Director of Business Development, having members learn “best practices” from each other at these sessions has been one of the most valuable sessions at the member conferences to date. Regardless of what future sessions look like, ProSource roundtable participants can rest assured that their feedback is being heard and shaping the future of their learning experiences. PS
21 Dealers discuss with their counterparts at the Orlando Summit
Orlando Roundtable Topics and Presenters How to Find & Develop New Talent in Today’s Market Place Ted Bremekamp of ETC Topics covered included: • Hiring Technical Talent • New Methods for Hiring Skilled Technicians • Security and Automation Systems • Hiring and Training Embracing Change and Adapting in this World John Prince of Five Smooth Stones Topics covered included: • Change in the Industry • Change in Business • How Change is Embraced
Ted Bremekamp (ETC), John Prince (Five Smooth Stones), Shawn Hannson (Logic Integration), Dave Gilbert (HiFi Sales) and roundtable moderator Sheri Griffin Spring 2016
Spring 2016
Creating a Presence for your Brand in your Community Dave Gilbert of Hi-Fi Sales Topics covered included: • Using Physical LocationEngaging the Local Community • Building the Professional Network Controlling and Accountability Within your Checkbook Shawn Hansson of Logic Integration Topics covered included: • Team Accountability • AV Companies Using a Budget • Work in Progress Schedule
LG OLED
Home Theater That Goes Above and Beyond
What’s So Great About OLED? Mark Major of LG talked to us about the benefits of OLED and why he thinks ProSource members should get behind it. Can you talk a little about LG OLED and why you believe it’s a superior technology?
Over the last 10 years, we’ve had two competing technologies in the TV industry, plasma and LCD. Plasma really went away about a year and a half ago. Both technologies had their own personality traits. Plasma traditionally gave a wider color palette with better blacks and better whites, but LCDs were more energy efficient and lighter. Some people liked the more “cartoonish” looking picture because the colors were very vibrant.
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the best blacks and in turn, the best whites. Any Hollywood producer will say that the most difficult thing to reproduce in the picture is a detailed, deep, rich, dark black. OLED is the only TV set or technology that can do that at this time. So when you have the perfect black you get the perfect white and once you get the blacks and whites down, your color palette is far more true to life. That’s the advantage of OLED. It has the energy efficiency of an LCD. It’s lightweight like an LCD, but it has a wide viewing angle like a plasma with better blacks. Plasma was always known to have a great black and a great contrast ratio, but OLED just does a better job. Why do you think ProSource members should support the product?
So customers were split on both technologies.
OLED takes the best of plasma and the best of LCD and marries it into one technology with the widest color gamut. It gives you the best contrast ratios by giving you
ProSource members should support this because ProSource stores and members are always looking to sell the best to their customers. This is the best solution for a customer looking for a TV experience. The whole industry knows it. If a customer’s concerned about picture quality and getting something that’s really accurate, they’re going to buy OLED. I know that ProSource members love to sell performance products, cutting-edge products, highquality products. OLED fits all of those. There’s no other TV technology like it. PS
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Spring 2016
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World Wide Stereo Bob Cole, Ron Rumer, Ryan Rumer
The Digital Playground
Indoor and outdoor speakers
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Same Company, New Look Legendary Philadelphia-area CE retailer World Wide Stereo adds a Digital Playground By Katie Nale
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large black-and-white picture sits in the patio area of the newly renovated World Wide Stereo in Montgomeryville, Pa. The picture was hardly noticeable amidst the celebratory setup of this spring’s VIP event for the store’s renovation, but those who happened to notice it would certainly be able to recognize the faces. Dressed in his ’70s finest, founder Bob Cole stands with his arm around his wife, Karen. They, along with fellow original Ron Rumer, stand frozen in time at the store’s Grand Opening in the fall of 1978. The picture is inarguably nostalgic, which is why it is perhaps a little disconcerting to see the exact
same faces at the store’s 2016 Grand Reopening. Sure enough, though, Bob, Ron and Karen, all still with the company, spent the night proudly showing off the store’s new aesthetics. The store, which sells a variety of categories, including high-end audio, video, home theater, lighting, shading and climate control, is now broken up into a number of different rooms and areas, all of which host a large array of products suited to the specific space. Designated areas include the patio, living room, signature sound room, den, study, bathroom, family theater, car, digital playground, common area and Kambic room, amongst others.
The Kambic room hosts a variety of speakers, including indoor and outdoor sound solutions. Hidden amidst potted plants, outdoor speakers are displayed to show how they can “promote but not interrupt” the outdoor experience. This theme seems to run through the house-like setup, as most areas host a blend of both discreet and obvious sound solutions. While large, minimalist-looking speakers stand like pieces of art in the center of the bedroom, others blend seamlessly into the wall, appearing, at most, like an intended part of the room’s design. To make room for the new layout, the car stereos were cleared from the Spring 2016
Ron Rumer, Karen Cole and Bob Cole on World Wide Stereo’s Opening Day in the ’70s
store floor and replaced with representative solutions. The store’s Web site can be accessed from the car area for any customer searching for something they cannot find. In the spirit of organization, all “excess,” including a large selection of headphones, has been migrated into a Digital Playground area. More expensive solutions can be found in other rooms like the Signature Sound Room, where World Wide Stereo’s highest-quality receivers and speakers now live. According to Cole, without having to close the store, 90 percent of the renovation was completed within six weeks. When asked what remained of Spring 2016
World Wide Stereo in Montgomeryville, Pa.
the original setup, he replied, “Nothing. It’s all new.” The VIP event included raffle prizes and an appearance by Steve Morrison of the Preston and Steve radio show. The event served as a precursor to an actual store opening event, where World Wide Stereo products and services were offered at special pricing. Later in the evening, Cole and Ron Rumer posed for a photo op with Rumer’s son, Ryan, a new World Wide Stereo employee himself. The store also runs in Cole’s family, as his daughter, Emily, serves as director of e-commerce. Despite the renovation, that ’70s photo of the store’s grand opening is
still representative of the store. World Wide Stereo’s “Our Story” Web page sums up the combination of the company’s evolution and family-like mentality that has kept it going for so long: In many ways, today’s World Wide Stereo feels a lot like the 1979 version. (If it ain’t broke…) But with the addition of e-commerce (and winner of the prestigious STELLA Service Excellent rating), two more storefronts and a growing international customer base, we’ve grown up some, too. Though Bob and Karen – and Ron and Mark and Kristin and Gavin and Frank, pretty much the whole original gang – are still here. After all, why would we ever leave? PS
EMPOWERED
Four Keys
Four Keys to More Profit By Paul Starkey
Y
ou can’t double profits if you can’t count properly and determine what real profit is. Here are four quick keys to doubling profit.
1. Have a proper revenue recognition scheme
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This means aligning revenue and costs as closely as you can. Forget the money, this often confuses operators. First, revenue is realized when goods are shipped/delivered to the customer and labor is billed. To keep up, you need to bill (internally) -- at a minimum weekly -- to determine how costs are being incurred. By using this production-based recognition method, you stay current with the flow of goods and labor on each project. Second, carry inventory and client deposits on your balance sheet to accommodate this process, again keeping revenue recognition separate from cash. Why are these methods important? Because without aligning revenue and costs, we cannot reflect profit accurately and manage it in real time. You could easily see a swing of 1 to 2 percentage points with this process alone. VITAL MGMT offers a free set of process documentation in QuickBooks to accomplish this.
2. Bid your projects
3. Billing Productivity Is your labor force efficient and being productively billed? A full time tech equivalent has the potential each week to bill 40 hours, but we know not all of any tech’s time is fully billable. So what should we shoot for? Getting each tech to a minimum of 20 hours billed each week and generating more than $8,000 per tech per month is paramount to better profitability. We have seen utilization as high as 26 hours and productivity as high as $12,000 per month per tech. One hour of improved billing per tech per month
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How you bid your projects is often the most immediate impact you can make. Classifying revenue by equipment, parts and labor helps isolate opportunities. Your mix should typically be 62% equipment, 8% parts and 30% labor. The typical margin for these is 35%, 65% and 50%, respectively, as minimum targets. Without labor costs, this example, would yield a 56.9% gross margin. With a 50% labor margin applied, this would yield a 41.9% net gross margin after direct labor. If your total gross margin dollars (with no labor cost) is at least two times your total payroll, then you are on your way to consistently making double-digit profits.
If you are not auditing proposed jobs, you are probably under-bidding most of your jobs. A quick audit of the mix and margin estimates of your last 10 proposals will determine whether you are in line with the aforementioned best practice. You will find pretty quickly where your bidding shortcomings are.
Spring 2016
Four Keys
THE CHOICE IS CLEAR CLEAR… …
You could easily see a swing of 1 to 2 percentage points with this process alone.
PARTNER WITH
THE BEST
equates typically to $5K in profit annually. Look for ways to get and keep techs on the job site working, producing more work faster. By keeping the billed hours per tech and the team’s average billed hours visible, they will find ways to do better. Be prepared to respond to their recommendations.
4. Pay your people and yourself
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To get to high levels of profit, total compensation (payroll) should be less than 35% of total revenue. Direct labor should be less than 50% of labor revenue while sales comp should be less than 8% of sales. Owner pay should be less than 5% independent from nonP&L distribution that might be taken. These rules of thumb will put your company in a good position to make consistently high profits. Together, these four keys can mean 6 to 10 points of more profit for almost every CI company. Where does it come from? Typically here: • COUNTING could add 1 or 2 points • BIDDING could be 3 to 6 points • BILLING could be 2 to 5 points • PAYING could be 0 to 3 points And the final question, how long does it take to earn this? The COUNT part usually takes 30 to 90 days depending on your current practice and willingness to change. The BID practice can start tomorrow with conviction. Do the analysis first. Profit will come as these jobs become revenue. Managing the BILL-able work is a team effort, we have seen major changes within weeks, and certainly within months dramatic improvement can be made. Compensation or PAY-changes are tricky. But moving from salary or fixed pay to performance-based pay can be exciting and rewarding for everyone. Yes, you can make a dramatic impact and yes, it can be done sooner rather than later. Take the initial steps and you will be amazed at what’s available to you and not being currently realized. What we have just shared here is work. The longer version for accomplishing this deserves more time and discussion. I hope you will tackle these initiatives because they cannot only provide more profit but when done, as a process, will reduce chaos and improve your customer’s experience. PS
One hour of improved billing per tech per month equates typically to $5K in profit annually.
Consumer Technology Publishing Group ■ CTA ■ CEDIA
■ HTSA ■ ProSource
ABOUT PAUL & VITAL MGMT Paul Starkey is the CEO and co-founder of VITAL MGMT, a CI specific business performance-coaching firm. VITAL’s clients typically are $2M in Sales and larger CI businesses. VITAL’s forte is a standard financial management methodology and its use of metrics to compare performance between companies. For more information go to www.vitalmgt.com
proud publisher of RESOURCES Standard Chart of Accounts Standard Project Management & Revenue Recognition
Spring 2016
■ CE Week ■ FutureVision
New Faces at ProSource Welcome Two Recent Additions! Emily Funk I AR/AP Specialist
T
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o better serve the members after the enhancement of our accounting systems, ProSource is pleased to announce that Emily Funk has joined the team effective April 1, 2016 as our AR/AP specialist reporting to Jessica Paskon, Director of Finance & Operations. Before joining ProSource, Emily worked at Spirit International as their Staff Accountant where she managed all of the accounting for their millwork division and successfully developed client relationships. Jessica Paskon commented, “We are very excited to have Emily join our team. She brings the experience required to further support and streamline our internal processes which will allow us to provide more timely payments of vendor volume rebates to our members.” Emily will work from the ProSource office in Southlake, TX and can be reached at 817-4312240 or by e-mail at emily.funk@prosourceinfo.com.
EMILY FUNK
Ted Bremekamp I Board of Directors
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ed Bremekamp was welcomed to the ProSource Board of Directors this past April. Bremekamp is the Chief Technology Officer of Environmental Technology Control in West Palm Beach, Fla. Bremekamp attributes his success to partnering with the right companies and building collaborative relationships. “I am excited and honored to be the newest ProSource board member and look forward to working with the other board members in continuing the great leadership that makes ProSource the best buying group in our industry,” Bremekamp stated. Alan Guyes of Audiotronics previously held Bremekamp’s position. Guyes stated that it has been an honor to help transition the buying group to its current membership. “Our current Board has an astonishing level of talent that represents the wide diversity of our general membership. On a personal note, it has been my extreme pleasure to have had the opportunity to associate with fellow Board members that share a common vision to make ProSource an even better, stronger and more responsive organization,” said Guyes.
TED BREMEKAMP
ALAN GUYES
Spring 2016
15 Minutes With…
VIDEO SERVICES
Jason Baumann
District Manager, South Central
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Tell us about your career background? I spent the first eight years of my career working the retail floor for companies from Minnesota to Arizona. While working for Hi-Fi Sales in Arizona, I was recruited for my first factory job as a trainer/detail person for Polk Audio. That job soon turned into a Regional Sales manager position. I was relocated to cover the Dallas, TX market and my family and I still reside there today. I was eventually typecast as a ‘speaker guy’ and I moved on to work for two more speaker companies in the CE space - API and KEF. Both companies were great experiences. I love music, movies and all of the sonic intricacies associated with them, so they were great working environments for me. My last 10 years with a vendor were with Milestone, which included the mount companies Sanus and Chief. I joined ProSource after Dave Workman came on with a new direction and vision for the group. It seemed like a great fit. What does your average day look like? For myself and all the District Managers, our efforts in the field vary based on our group plans and strategies. Every quarter we have different initiatives that we manage to continue in our heritage as the best buying group in the industry. At the highest level, I collaborate with ProSource members to ensure they take advantage of a host of opportunities their membership brings. For example, we launched a funds transfer system to speed the payment of member rebates; I ensured my members knew of the opportunity and that we processed rebates as they preferred. More recently we launched a new member portal and I am working with my members to ensure they know they can view their progress in our vendor programs, view rebates paid and more.
We start these sessions by giving the vendor a platform to inform our members about new products, programs, etc. We follow up by touching on what’s new and upcoming with ProSource. Then, we turn the discussion over to our local dealers - and of course, there are no uncomfortable silences when we turn it over. Every session we do our best to connect our members with our vendors so both get the maximum benefits of being part of the ProSource group. What do you like most about your work? Learning. Most people know that we have great programs and a great distribution branch, but we also provide multiple tiers of services for marketing, finance, HR, health insurance, business insurance and more. These types of discussions teach me so much about our members and exponentially increases my respect for them. What is one thing ProSource members should be excited about? Member Benefit Reviews. Twice a year we put together a report for our members with all of the numbers supplied by our vendors, all of the rebates, credit memos, MDF, etc. that a member earns for being a part of this group and present it to them in an easy-to-understand format. We deduct the
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These types of discussions teach me so much about our members and exponentially increases my respect for them.
What projects are you working on? Currently, I am on the road conducting Town Hall Meetings. The company hosts about 24 dinners in all of the major markets throughout the year. This week, I will be hosting in Phoenix, AZ, Orange County, CA and Dallas/Fort Worth, TX. These meetings take place at nice restaurants and include the local dealers, including a select vendor for each dinner.
is the proud producer of
dues that the member pays and show them the total financial benefits they receive from us. This helps dealers feel better about where they stand with us. I believe we are the only buying group who provides this service and that is something to be excited about. What hobbies do you enjoy outside of work? Music, sports (preferably live) and movies have always been at the top of my interests. About two years ago I was blessed with a grandson, so of course being a grandfather is my most important role. And yes I know, everybody tells me I don’t look old enough to have a grandchild. PS Spring 2016
A Division Of
Up Next How do you build a better network? Improve the router? Upgrade the switches? At Access Networks, we believe building a better network starts with building better connections. Connections between your experience and our expertise. Connections to the brightest minds in the business. Which leads to better connections between people and the technology that inspires them.
This is the power of connection.
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ProSource Industry Reception at CEDIA Plan to join us for an evening of networking and fun with industry leaders, your peers, vendors and the press.
September 15, 2016 • 6:30 p.m. to 8:30 p.m. Sheraton Dallas Hotel • San Antonio Ballroom 400 Olive Street Dallas, TX 75201
Women in Consumer Technology 8th Annual CEDIA Breakfast Friday, September 16, 2016 • 7:30 a.m. to 8:30 a.m. Kay Bailey Hutchison Dallas Convention Center Ballrooms C1 & C2 accessca.com Spring 2016
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Perfect Sound in Any Room “AmongfithfifinumfifioufififioomficofififictionfifiyfitfimfifiIfihavfifi tfifitfid,fiARCficufififintlyfifitandfifioutfiafifithfifibfifit.” – David Rich, Secrets of Home Theater & High Fidelity
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