Beware of scope creep

As the wheel start turning for the 2010 InAVation awards, Chris Fitzsimmons paid a visit to 2009 residential category winners, Smartcomm to meet a company which walks the line between the residential and commercial integration markets with seeming ease. How do they do it?

Smartcomm is a UK-based specialist AV integrator working in both the residential and commercial sectors. In recent years they have made short-list making entries to the InAVation Awards, and won the Residential categories on two occasions, most recently with The Darlands, a luxury family home located in London.

Managing Director, Steven Worrell has been around the AV block a couple of times, but after a ten year stint in broadcast before coming back to the true faith he was involved in buying out what was then Smartwall with partner and long time friend David Savage. The two renamed the company Smartcomm, before looking around at ways to expand the business. But how did they hit upon getting into the residential market?

“That came about because at the end of ’99 I moved into a new property. I was looking around in terms of putting in some toys and some multi-room audio and things like that. I’d got a local company involved, which turned out to be a very painful experience. They were a retail outfit who’d positioned themselves somehow into custom installation. They sold me this system, and after they’d installed it and had some teething issues, I learned it was the first system they had installed, and it was also very early days for the manufacturer. Obviously the research from my point of view wasn’t as good as it could have been, but eventually with a bit of help from the manufacturer we got it all done.

“The whole way they went about the installation, the cable management and planning, was all thrown together. That’s what made me start looking at it and thinking there’s money to be made here. If I’m prepared to spend x-amount, then someone else will spend more, and on a much bigger house!

“We did a lot of digging around at first without actually making any financial commitment, or signing up manufacturers. We visited shows, and spoke to a lot of people, and once that process was done, which was about six months, we did decide to go for it. Our first customers found us on the internet, and it was a £40,000 job. Not a bad start.

“The initial learning curve was very steep, in terms of how you deal with residential projects. As time went on we could see where the value was, and that there was margin to be made if the jobs were designed and project managed correctly in the first place.”

Service and maintenance has become a really important aspect of the business to Smartcomm. “In the early days, we really struggled to sell the benefits of the service agreement to the residential side. They just saw it as an extended warranty, when in fact it’s so much more, especially when it’s your house!

“If someone’s boardroom or meeting room falls over, then they go into another meeting room. But if it’s your house and your heating goes, or the remote isn’t working when you sit down to watch the TV, you want someone to fix it, and quickly. That is as much a customer education thing for us, as a learning curve, getting across the message that you need to invest in that.”

So is the general level of customer hand holding much higher for residential business? “Yes it is, and it takes time to get used to giving that level of support, and to being responsive enough. If you’re not, and you can’t be flexible then you just won’t get the business,” states Worrell.

He believes that this need to nurture the customer extends from start to finish in any project, from sales, though the design process, the installation and beyond.

“On a project we could go through seven to ten iterations of a proposal before we reach an agreed specification. It’s always chopping and changing when you’ve got architects and interior designers involved.”

But no matter how much chopping and changing goes on the key, according to Worrell, is to be on top of the customer’s expectations, and to really be certain about the scope of a project.

“That’s the most important thing. I guarantee that if you haven’t nailed that down at the beginning, and got the customer to sign off on it, then you’ll pay for it at the end of a job. The difference between what you’ve installed, and what the customer is expecting can be miles if you aren’t very careful. Then they end up withholding final payment until you give them what they were expecting. You have got to square away everything from the functionality of the panel in each room to the layout and design of the buttons. You don’t want to have the ‘but I thought I was going to be able to do this…’ conversation.”

So how does Smartcomm’s work in the residential sector feed back into what they are doing in the commercial world?

“The amount of front end design effort that goes in now has definitely increased because of what we do residentially. Our paperwork, touch panel layouts and so forth are really tight now. We give demos of the layout before they are signed off by the customer. If we tell them what they are going to get, get it signed off and then deliver it there’s no problems.”

And finally what are Worrell’s pearls of wisdom for anyone thinking of broadening their horizons and getting into the residential game?

“Don’t, leave it to us! No, seriously, remember that equipment is equipment. Boxes connect together with wires and if you design the system properly then you won’t go far wrong. Where you will lose out is in underestimating labour costs, much more so on a residential job than a commercial one. It comes back to the front-end design. If you don’t get that right, then scope creep will come in every time, and it’ll cost you.”

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