The times are a changing

Why does a company with a strong brand and a successful history choose to reinvent itself? Chris Fitzsimmons went along to the newly rebranded POLARaudio to talk about the changing face of distribution in a rapidly evolving AV market.

Beyerdynamic GB, as it was known until very recently, was founded in 1969 and Managing Director John Midgley has been with the company since 1984. During this time he has seen changes in his core markets and expanded into totally new ones. For almost forty years, the company has made good use of Beyerdynamic’s reputation as well as contributing to its continued success.

So when I learned shortly before PLASA this year that the company was to be renamed, rebranded and relaunched as POLARaudio my first reaction was: Why?

“For the last four years, we have been banging on about being solutions providers,” began Midgley when I visited him at the company’s offices in West Sussex, England. “We can provide everything from the microphone right the way through the control system to the loud speaker, and Cue allows us to provide control over the environment as well.”

Midgley’s main problem though is one of perception: “We sell a lot of microphones to a lot of companies, a lot of Biamp to some companies and a lot of conference products to other companies. But, when we looked at the larger spread of what we’re selling, and the customer base to which we are supplying it, only a small number of those customers realised the benefits of buying all of the products from us. Or indeed that we even sold all of those products, despite all the marketing, the price lists and the DVDs and everything else.

“When we stood back and looked at it we realised that the comfort that people gain from coming to us because of the Beyer name, also had a masking effect on what we trying to do as a company.”

Obviously as a distributor of thirteen brands there is an advantage in not having a name that seems to prefer one of those brands. But there is another driving force behind the decision, one that reflects the changing role of the distributor in general.

“Part of the rebranding has been based on enabling us to have an image for the company as a distributor and to attribute to that company facets, services and facilities and so on that aren’t associated with a manufacturer. And that really was a big problem. We’d go and talk to consultants and they would say ‘hmmmm, didn’t realise you did this’.

“I also think that we can’t ignore what’s happening in the market around us. The more business we’ve done in the installation arena, the more apparent it is that the market isn’t keen to employ people within the audio sphere and who have the technical expertise to support some of the technology being employed.”

As far back as 2000, Midgley states that he was looking ahead four or five years and seeing a real threat to what he was doing. The web was beginning to have an impact on his key markets and with the adoption of Clear One the company was propelled into main stream audio and video conferencing and therefore systems integration.

“The premise was that we had to add value to this product or otherwise we were going to be superfluous to requirements. If we were just an extra margin and cost, then we weren’t going to succeed.

“From that point we invested very heavily in the people and the support mechanisms and we went after the products and the markets where we could add value through our technical knowledge and the services we could provide.”

The relationship between the integration market and the distributor isn’t always a smooth one. John describes a situation where an integrator doesn’t really want to buy from a distributor, they’d rather buy direct from a manufacturer. The distributor is a bit of a nuisance. However, the integrator needs technical support, is reluctant to admit that fact and when finally problems do occur and the client is making noise then inevitably the integrator goes back to the distributor for help.

This leads to companies like POLARaudio “arriving a little late on site” as Midgley diplomatically puts it.

“We find ourselves saying ‘well if you had done it like this guys….’. And you can accept that as part of your lot as a distributor or you can turn things around and offer such services up front to the integrators. We want to be much more involved with them, offering then what they might see as sub-contracted services.”

One of the benefits of the POLAR- name is that as John himself admits you can put anything on the end of it. POLARinstallation anyone?

“No, we don’t want to become installers and we don’t want to become consultants. But we are daily drawn into both those roles. People ask us for solutions and designs and that could be considered consultation and they also need assistance on site. It’s not a criticism of integrators, it’s just a reflection of the broad range of the technologies that now come together – nobody can do everything.”

It’s hard to have a business meeting these days, at least in the UK, without talking about the dreaded credit crunch. This issue touches on another less talked about role of the distributor in the market.

“I think one of the important facets of the supply chain is flexibility and this is one of the things you are seeing in the banking chain at the moment, a lack of flexibility because the banks won’t lend to each other.

“What distributors provide is the elastic. The manufacturer has this just in time mentality, and is being run on the basis of an accountancy situation, where they don’t want stock in the warehouse. And of course they want paying very quickly. There is a distinct lack of credit between the manufacturer and the market. At the other end, there are installation companies running two or three projects. And they can’t afford to run those projects without getting paid. Sadly the majority of contracts now don’t enable them to get paid until it’s completed. There is a period where they need funding, and if there was an immediate connection between the integrator and the factory it might actually be a serious problem.

“There wouldn’t be that give in the chain. Very few people in the chain want to admit that this is part of our role, but it is a facet of the business. We’re not a bank, but we can provide the elastic.”

So how does this sit in the context of the wider AV market? John isn’t going shock anyone when he says: “The climate itself is getting tougher every day.” However he does foresee a grace period before things might turn a little nasty.

“The last time we spoke, we had a good looking six months ahead with plenty of things in the pipeline, and that hasn’t changed at this point, just after PLASA. But we also talked about 2009 being a more difficult year, and I think if we talk again in another six months, then you’ll see a different picture.”

And how does Midgley plan to cope with that? Well as we already noted, POLARaudio will be the first step on a longer path:

“We will be addressing the market issue as part of our re-branding exercise. Traditionally one doesn’t do rental unless you set yourself up as only a rental company. However we are certainly looking at sub-renting to rental companies for instance. Conferencing for instance is a prime candidate.

“What very often happens is that you get a facility where they have monthly meetings for 30 delegates and once a year you need to cater for 100 delegates. Now, wireless technology is expensive, but also ideal for that.”

As to further plans, that was all John was prepared to be drawn-on. But then a wise man never gives too much away. And in the current economic climate, whilst there is certainly no need for panic, we should be thankful for wise men in our industry.

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