The good news for the custom electronics industry is that it has secured a prime section of floor space at the International Builders’ Show (IBS) where tech companies can show off their latest whiz-bang entertainment, lighting, and home management products. The bad news is that fewer than one in 10 new homes built in the U.S. are sold with these amenities.
AVAD (Alliance of Value Added Distributors), a nationwide partnership of 11 electronics distributors, wants to change that. At this year’s Builders’ Show, the group is launching a dealer-to-builder program designed to resolve some of the issues that have impeded widespread adoption of technology by high-end home builders. The referral and support program will go into effect April 1, 2004.
“We went to IBS last year and asked builders why they aren’t doing more in the way of custom electronics,” says Joe Piccirilli, managing director of AVAD. “The disconnect seems to be that the builder community has had difficulty finding qualified subcontractors who they can trust and who understand the economics of doing business with builders.”
AVAD’s program will train and certify electronics installers in the areas of sales, builder relations, licensing, proposals, project management, permits, insurance, and accounting. Dealers will also have to demonstrate proficiency in seven areas of technology: home theater, distributed audio and video, lighting control, structured wiring, central vacuuming systems, phone systems, and home networking.
Training will take place at AVAD’s 11 facilities across the country. The facilities are also used by the Custom Electronic Design & Installation Association (CEDIA) for training its installer members. AVAD will offer two levels of certification. Level I dealers will be listed as Recommended and will have to show proficiency in home theater, distributed audio/video, lighting control, and structured wiring with a commitment to pass a test for a fifth category within a year. Level II dealers achieve Preferred status by being certified for all seven technology categories. The goal is for dealers to be one-stop shops for builders.
“One of the things builders have been looking for is to deal with the fewest number of subs as possible,” says Kip Dellinger, who’s spearheading the dealer-to-builder program for AVAD. Level I dealers have to certify at least one staff member at $2,500 each. Preferred dealers have to have 50 percent of their installers pass Level I tests and at least one installer certified for Level II.
The curriculum will be determined by AVAD and third-party training partners. The group has reached out to third-party consultants with experience working with builders. One trainer is a certified public accountant who began his career working with builders and later moved into the custom electronics market. Another has an electrical contracting and custom installation background.
A section of the training will deal with working with other subcontractors on the job, Dellinger says. “They’ll learn how to deal with change orders, how to allocate appropriate resources to the project, how to make sure they have enough people assigned to a project for that part of construction or installation, and how to have the right support materials and enough wire on the truck. They’ll also learn what to do if the floor guy isn’t finished.”
Dealers who pass certification for the AVAD dealer program also have to be members of CEDIA. For many of AVAD’s current dealer base of 6,000 to 8,000 dealers who purchase at least monthly from AVAD, that requirement has already been met. But AVAD also hopes to reel in electricians and security system contractors who might be doing A/V installations as an extension of their business. The goal is to raise the level of all boats in the custom electronics waters.
“We noticed at IBS that there were all these manufacturers in the Tech Home Pavilion, but most of the them couldn’t answer the builders’ question, ‘Who’s going to install it for me?’” says Dellinger. “How does the builder know the dealer is qualified? That’s the vagary we want to eliminate as much as possible.”
In many cases, builders have turned to subcontractors they’ve worked with in the past, but electricians don’t know the ins and outs of advanced technology. “The typical security guy and electrician are trying to find the cheapest way to do the job, to take it to the lowest commodity pricing that they can, get it done, and then move on,” Dellinger says. “The problem is, when you get into home theater, distributed audio and video, that’s not really what homeowners are looking for. They’re not looking for the cheapest way to do it; they’re looking for something that suits their needs.”
Dellinger says a lot of these contractors have ventured into audio/video and home theater at the request of their customers but then abandoned the market when they realized they were not properly trained to handle the support required for the business. “We want to teach them how you sell this stuff on something other than price,” he says. “We want to teach them how to sell the value.”
It’s not the first time an organization has tried to bridge the gap between dealers and builders, Piccirilli says. “No one has been able to offer both sides exactly what they want.” AVAD believes it can be successful because it will serve as a facilitator and remain somewhat neutral in the role. AVAD will present qualified installers to builders and let the relationships develop from there. For its matchmaking AVAD gets the equipment sale. “Once you make a deal with us, our gear goes in,” he says.
For builders, in addition to getting referrals for qualified installation companies, AVAD will supply support materials that explain the benefits of home electronics, including brochures and DVDs that builders can give to prospective homeowners. The DVDs will prime dealers on how to pitch builders and give builders sales tools for their model home staff and clients.
AVAD’s charter when it was formed five years ago was to provide manufacturers with a cost-effective way to reach the thousands of tiny dealers that make up the custom electronics network. AVAD has a list of more than 6,000 dealers that buy at least once a month, and it is the exclusive distributor for Bose and Mitsubishi Diamond products.
AVAD will put together electronics packages from an exclusive list of manufacturers with a proven ability to deliver products reliably and on schedule. Manufacturers who don’t fit that profile haven’t been invited to be part of the builder program. “The idea is if you have lighting control, central vac products, and a couple of others, you’ll only have one vendor in each category,” Dellinger says. Home theater will encompass more vendors.
Plans are for three to five product packages for builders to choose from. “We’ll sit down with the dealers, look at the demographics of their customers, room sizes, price range, and we’ll modify the pre-formatted packages for a particular housing development,” Dellinger says. “You’ll have a different need for home theater in a $500,000 home than you will in a million-dollar home.”
Rebecca Day specializes in writing about home electronics. She can be reached at rebecca362@aol.com.
