Home Automation Podcast Episode #113: An Industry Q&A With Curt Hayes
In this weeks home automation show of Automation Unplugged, Curt Hayes, CEO of Blue Dog Group, shares the importance of data documentation for custom home integrators for a streamlined business process to retain clientele and provide accurate scoping.
This week's home automation podcast features our host Ron Callis interviewing Curt Hayes. Recorded live on Thursday, April 23rd, 2020 at 12:30 p.m. EST.
About Curt Hayes
With 30 years in the audio/video and automation industry, Curt got his start in the late ’80s when he founded Preston Trail Audio in Dallas with his father.
In the early 2000’s Curt founded Florida based Audio Designs, a systems design and engineering company serving integrators throughout the USA.
In 2015, Curt used his experience in the industry to Co-Found South Florida-based BlueDog Group where he now helps streamline and accelerate proposals and system designs for residential and commercial integrators.
- The history behind the founding of Blue Dog Group
- The opportunity to improve the broken project scoping/budgeting process used by many integrators
- How Blue Dog Group’s new app allows integrators to provide quick estimates to their clients
- Approaches integrators can take during COVID-19 to improve their business process
Ron: Hello, everybody! Welcome to another episode of Automation Unplugged. As we've been doing during these quarantine times, trying to bring you more guests, more perspectives, more things to think about, or to consider. We're bringing you more content than usual and this week is no different. I'm excited to bring you today's guest. I've known Curt Hayes for many years, back to the inception of One Firefly, the predecessor brand was Firefly Design Group. I actually launched this business as a system design and documentation company. I want to say Curt launched his business, again one of his old brands, Audio Designs, before I launched Firefly Design Group. He was definitely one of the trailblazers out there trying to bring valued services to the custom electronics industry. Curt has been a busy bee growing his business and his book of services. He's actually rebranded and launched a more comprehensive set of solutions under the Blue Dog Group brand. I reached out to him and he said he'd love to come on. He's also got some exciting updates in his software universe that he'll share with us at some point. Let's go ahead and dig right in. Let me go get Curt. Curt, how are you, sir?
Curt: I'm doing well thank you. How are you doing?
Ron: I'm doing super duper man. You are a fellow Floridian, you're down here in Fort Lauderdale with me.
Curt: I am. I'm just not too far north of you actually, right up in Boca Raton.
Ron: I'm over in Tamarac, so west of Hollywood. I was in Hollywood for years, when I moved to South Florida I actually moved to Hollywood and had my office there in downtown Hollywood for many years and but now I moved west, I want to say in 2013, and lived down in Cooper City and then we just built a house and we now moved up to Tamarac.
Ron: All right, my friend. Many in our audience may not know you and many do. You've been around for a little while. As always, I'd love to start with you introducing yourself and telling our audience a little bit about yourself and your background.
Curt: All right. Well, it's a long background because I am getting old. I started this industry originally back in the late 80s, technically full time in 1988. My dad and I started a two-channel, high-end audio store in Dallas called Preston Trail audio. We started that store and had it for about seven years. We were at that time the fastest-growing company in Dallas. Frankly, the economy down there changed. The savings loan crash and things like that and we closed the retail store but we had gotten into custom installation. That's where I got started, probably about mid-90s that we started doing custom installs. The early, early days of CEDIA, when CEDIA was first coming to Dallas as a matter of fact.
Ron: Did you go to the first CEDIA?
Curt: I didn't! We were typical integrators and were too busy.
Ron: I've heard that before!
Curt: I started making my mistakes early also, too. My background is like a lot of the guys in this industry, I'm one of the guys that have done it all. I've drilled holes and pulled wire and had oversized TV's hoisted through windows on cranes, installed racks, serviced, programmed. Now, extending beyond that, I've gotten involved with data management and software. My background as we approach things is very much from the perspective of trying to think about who it is we're serving, what audience? Because there are elements of what we do that have to support sales and there are elements of what we do that have to support operations and administration. There are also elements of what we have to do that support engineering and programming.
Having touched on all of those and been intimately involved in all those, maybe you could argue that I put too much thought into some of it. But nevertheless, we got involved in custom installation, we sold that company in 2000 and I moved to Florida and got involved in condos down here. I've done high-end audio retail, I've done high-end residential, and I've done condos. We've done production homes and now for the past 15 years, have done outsource design engineering and that's where we are today.
Ron: I want to say when you and I met, it was in that early 2000s are. I'm struggling to pinpoint the exact timeframe but I know you were working with Michael Wohl and David Len over at Media Design or Media Design Associates. It was in maybe the first MDU you boom here in South Florida.
Ron: I say that first. The first where I was around, so in the 2000s and there was another one in the teens. But you were you putting packages together and really had some innovative ideas around design, engineering, and documentation of volume projects like that.
Curt: Yeah. My philosophy is that if I'm going to do something more than once, I want a template for it. Everything's documented, so like our labor catalog that we still use today and continue to expand on started back doing production homes where we really needed to be efficient with our labor. I needed to know how long it took for a guy to do something, screw up a new construction bracket into a ceiling, put up a mud ring. We just started timing it and that way we could manage it.
Ron: You were with an integrator and then ultimately you opened up Audio Design?
Ron: What happened? What services did you offer and how has that transitioned into what you're doing now?
Curt: That was the early days of the Crestron independent programmers. I knew some guys that were going off on their own and selling outsource programming. My thought was, "Well, if there's a market for outsource programming, then there's also a gap if you will in the market around doing quality system design engineering." The premise for Audio Design was I'll offer design engineering services on an outsource basis to integrators across the country. That's how it started. I mean, it wasn't big, it was really kind of an experiment. I started doing that and then that started to grow and we were Audio Design through 2017 with our design engineering business and then into 2015, really as a support service, to that is where we launch Blue Dog Data and Blue Dog Data was simply an extension of the design service. We needed the ability to replicate our master catalog that we use for our proposals and drawings out to multiple instances of software that our clients were using this with the d-tools software. It was really initially a support to that. Now there is a demand for data. We talked about what does Blue Dog stands for and to me, Blue Dog means that we believe successful projects require accurate proposals and everything stems from that.
To have an accurate proposal, you have to have accurate data. Somebody has to be doing the job of entering items correctly into the software and when I touch on all those different disciplines, there's data that supports sales, there's proposal related data, there's data that supports administration. If that data isn't populated consistently and accurately and completely, then the software can't do its job. Fundamentally, although we're a design engineering company and that's our product, without the database we can't do our job. Anyone who's doing this industry has to have a database. That can be an Excel Doc that's really well maintained, it can be software. It can be done in different ways. But fundamentally, I believe you've got to have good data to be able to put an accurate proposal together and an accurate proposal downstream supports your business process.
"I did design work for a while, and data is a beast because if it isn't right and accurate, you can't build accurate proposals."
Ron: There are lots of software out there, d-tools, Simply Reliable, iPoint. A plethora of places. What did you see as the need back in the mid-2000s all the way to the present as you're working and solving and providing solutions around data? What is the problem that exists out there that you're trying to fix that others haven't been able to fix? Or what's the differentiator? It is a hairy problem and I did tell the audience, I did design work for a while, and data is a beast because if it isn't right and accurate, you can't build accurate proposals. And then your challenge is exponentially greater, I think because you're serving customers throughout North America - or just the United States? Are you doing in Canada?
Curt: No, really just the US right now. It's tough enough with pricing and everything else to do in the US. When you start throwing different price books into the mix and when you start throwing metric as opposed to international measurements into the mix. It can be done, but it becomes yet another database.
Ron: Let's say you're solving a problem here in the US. What is it that you're solving, just out of curiosity, that others maybe are taking a different approach?
"What is a proposal? A proposal is really just a compilation of parts and labor. It's a bunch of parts and labor that have to capture the expectation of that client."
Curt: What I hear, I just have to go by what I hear, and what our experiences are, the challenge is really around sales. It is that meeting of a salesperson with a prospective client trying to understand what it is that client wants, what they're willing to pay for, and getting that translated into a proposal. What is a proposal? A proposal is really just a compilation of parts and labor. It's a bunch of parts and labor that have to capture the expectation of that client. I think the challenge is that the way the industry works. Currently, for the most part, a salesperson will go meet with a prospect and like we were talking about earlier, you get the report going, you get salespeople and they have a good rapport.
You're talking about all the things, the dreams, for these clients usually the AV system is running in parallel with a dream. They're renovating a home, they're building a new home and you're contributing to that home just like they're talking to the guy about the pool and they're talking about these other aspects of their house, you're part of the dream. Right now, your dream building and you're collecting all this information and now you're gonna go back and create this proposal. Now that the way things usually work is that it gets built in one of those softwares, d-tools, iPoint, SRS, whatever it is. Fundamentally, you come back with a long report with a whole bunch of line items of brands I've never heard of. And what the disconnect usually is, is they flip to the back page and they see a number that was completely out of the realm of whatever they were thinking. I think that the challenge is, is that qualification of clients is lacking. I think the turnaround of proposals in terms of getting them turned around quickly is lacking. That's what we're trying to focus on, shortening the sales cycle. What we're trying to do is say, "Look, let's help these people understand scope and budget." To me, that's where everything should start. It should start about scope, which is how many things do you want and budget? How much is that going to cost? And if you have that information and like I said, I'd like to ask questions such as, "Where do you want to watch TV? What do you want to watch? Where do you want to listen to music? What do you want to listen to? Do you want to control your lights? How do you want to control them? Do you want motorized shades?" And just talk through the different disciplines of things that we do. If you can then tie a price to each one of those, now six TV's with wall brackets and extenders and back boxes, it's not a six hundred dollar TV that they can buy at Costco it's now a twenty-five hundred dollar purchase and six of those is not $6,500 a box, it's twelve five. You have to help them understand that.
Our industry today, in my opinion, hasn't shared with the marketplace what these systems cost. They certainly haven't made it easy to know what these things cost. Ask anybody about the price range of a new car and odds are, they can get you close. And certainly, if they're going to buy a car. People know, if I'm looking at SUVs, I know that a Range Rover is more than a CR-V. I know the price of a Toyota Highlander or Honda Pilot. I can look and go on a website and there they all are, here's the price range. If you were looking at homes, you drive around the neighborhoods and it says homes from the $250,000 to $700,00 or $1 million to $3 million. You know what the price range is going to be. When you go talk to the builder, he already pre-qualified. But you sit down with an A/V integrator and start talking about all these things, you have no comprehension. You say, "Motorized shades, that would be great. I want them everywhere, I got all these windows." We're down here in sunny Florida. But at twenty-five hundred bucks an opening, they may have an idea that that's going to turn into $50 grand.
Ron: What are you proposing? I know that you have beliefs and approaches to how integrators should or could be doing this. What is your belief system? How could those listening that are seeking to have a better scoping or getting to a number more quickly understand what to do? I call that early phase discovery. Architects will call that discovery where there's a lot of Q&A and education around pricing. But how do you propose integrators do that?
Curt: Well, it can be done really basic. I'll tell you, back in our early Audio Design days, our pricing model for proposals was actually around budgets. Back then, systems were a lot more expensive overall but we had a model. We said, well, up to 50 grand it was going to be this much money and then it was every hundred thousand dollars. Back then what we did was we put a spreadsheet together and by system we looked at audio distribution. I've got speakers from $100 to $1,000 to $5,000 and I'd put an X on the spot and say, "Well, it's gonna be $500 dollars and I need ten of them." And we would just build it out that way. There's no reason why that can't be done. Anybody can do that, you just have to think about what the systems you're gonna sell and break it out in a manner that you could talk about. We've launched an app and all we did was take that concept and put it in app form because that's all it really boils down to, is slide arrangements: good, better, best.
Ron: You have customers around the country and you've worked with integrators for at this point we're approaching two decades, you have a lot of experience knowing what's normal out there. What is normal? What do a lot of the folks that maybe haven't fully refined it, what is the normal state of affairs out on the street today? Again, COVID aside. Let's just talk under normal circumstances.
Curt: Well, it seems to me that normal is what it's been for a long time. You go meet with a prospective client, you being the salesperson, you take a bunch of notes, the client says how much is this going to cost? You say you'll have to get back to them. Price hasn't really talked about very much. That's open-ended. Then everybody's busy so the notes sit on your desk for two weeks and now you've forgotten what you talked about for the most part. Now tomorrow is the presentation, it's been two weeks and it's Thursday night, you're supposed to meet on Friday and you've got to scramble to get a proposal put together. Now, this is gonna be a haphazard proposal.
It's not really detailed and it's a number that oftentimes misses the mark dramatically. What happens is - there's this article I wrote called, "Selling, scope, and budget." The first impression turns out to be bad because the number on the back page is a big disconnect and now you're backpedaling, trying to figure out what you're gonna do. I think that's the normal process. The question is, what can we do as an industry to shorten that? There are other scope and budget software but the challenge is that even if it's superficial high-level stuff, you still have to have a database for that. That's the challenge. If you're trying to send salespeople out and they don't know what the stuff costs and you don't have a tool to help them get to a budget, then that's going to fail too.
Ron: Let me make sure I translate it right. For example, if you're trying to tell a customer, "If you want four zones of audio, it'll cost approximately this. If you want eight zones of audio, it'll cost approximately this" Do you need to have that approximation based on something?
Curt: Right. And that's why I'm saying, you've got to have something that you can punch some numbers into in some shape form or fashion. And if that's a spreadsheet or we've had clients that through the years develop that. I'll give a shout out back to Justin. They sold very successfully scopes and budgets and started with a template proposal and copy and pasted numbers into it. But at least they were deriving scopes and budget, collecting a design retainer so that when it came to us to do the detailed proposal, the success rate was very high because they had gotten the client to buy-in.
"I think scope and budget selling are important. If you can sell a good scope and budget and collect a design retainer, then you don't have to get upside down in the sales process."
That's why I think scope and budget selling is important. If you can sell a good scope and budget and collect a design retainer, then you don't have to get upside down in the sales process. The challenges are learning to do scope and budget selling and getting comfortable with it.
Ron: You mentioned you created a piece of software, just before we went live you sent me to log in. So, ladies and gentlemen, I've had zero training in this environment. If I goof-up, Curt I'm apologizing in advance.
Curt: You can't goof it up, it's a simple app. I mentioned earlier the aspect of having a price range of things: good, better, best price ranges. What we did is we took my old spreadsheet that was built in Excel and we made an app out of it. What you see are estimates, basically getting with the client and going through the different systems, displays, audio distribution, video distribution, theater, surround sound, lighting, shading, structured wire racks, network - all the different systems that go into a smart home, you have to capture a budget. What we did was just built some software to give people the opportunity to develop that in real-time. We released it way early, by the way. I try to make a point of this in the website. In our releases, our initial target for this was to be CEDIA in the fall.
But because we're locked down right now and if you're trying to keep your sales pipeline flowing, our thought was, "Well, the app is good enough right now." I mean, it works. If it gives you the ability to sit in a screen share meeting like this and talk to a client and develop these budgets and do a zoom in or share your screen and talk about what your system going to be.
Ron: The foundational pricing of this, where does that come from? I am going to give an example of a dealer, Justin is in San Francisco and another dealer might be in Dubuque, Iowa - there might be pricing differences in those two markets. You might disagree with that, you might say it's all the same. I don't know. But how do you account for that?
Curt: This was originally an iPad app, by the way. I actually launched this app on iTunes the better part of a decade ago and we didn't have the kind of technical capabilities back then that I have now. I was able to get a developer to develop it and I got it onto iTunes and then immediately found out that we're not a software company, people start saying that it was broken and I didn't know what to do with that. It really just was an internal tool for us, frankly. It took our little spreadsheet and we made an app and we used it to quote proposals but we've relaunched it cleaned it up. What I learned is people don't know install pricing. Some good feedback that we got from that was we moved labor to the bottom and we just made it a percentage.
We're trying to keep this thing really, really simple. Here's the way I present it. The aspect of where do you wanna watch TV and what do you wanna watch? They might say that they want to have surround sound with a big TV in their family room, a TV in their master bedroom, a TV in the outdoor living area. Maybe they're having a pool built and want to be able to do music out there. I also want to mention is, whether you use our app or something else, conceptually, to me, this is the process. The process is, "Alright, so now let's break that down." In the context of our app, if want a better TV for the family room, the slider values are based on values that are current to the market today. If you pull something in that slider range, $3,000 for a better TV. You would enter quantity 1. The outdoor TV is a special application so that might be a $5,000 budget. They need one of those and then they might have a projector for the theater and the projector is going to be $10,000, that's my best display in this in this scenario and I need one of those. Then I'll add three good TV TV's, for those three guest bedrooms and they're $500-$600 apiece. You enter the quantity, you enter the budget range, and you get a number. For that client, you've just established those 7-8 TVs. If they're in their head thinking, "I was at Costco yesterday and I looked at a TV and it was $1,000," and we're talking about 7 TVs, their head is probably saying $7,000. Well, we're going to show them is that those 7 TVs you talked about are going to be upwards of $20 grand. You've got to get there first. Then you move on down. What about infrastructure for it? The Bracket and backbox. What about surge? There are seven back boxes and wall mount brackets and those are going to be budgeted. There are seven IP surges at $300 apiece. And ultimately, there's pre-wire. We just have those broken out so that you can follow it through, you can put a number and a quantity on it so when we're done talking about displays, you can show them the number and see if they're comfortable with that. Either they are or they aren't.
But what we've established now that TVs are $25 grand and that number is going to drop to the bottom. Now let's talk about theater, there's a section for theater. There's a section for surround. What's the difference? Well, a theater in our view is a room dedicated to the accurate reproduction of film. The theater is a hiring thing while surround Sound is a 7.1 one system in a family room. We have two different things for theater. When you're in the theater section, you've got acoustics budgets and things like that that we want to take into account. Going down the line, video distribution, network, etc. Point being, once you get to the bottom and that number is $175,000, we've gotten there block by block - $25,000 here, $15,000 there. If they've agreed, you're getting small yeses and then at the end, you have scoped a number of things and you have a budget based on real numbers, not out of some guy's head or, "Somebody told me and I thought this was pretty good." They'll say, "Well, if it's in the app, it must be right." It builds credibility. The point of all that is, that now I've got a number. We've talked about all these things, fairly quickly, no brands, nothing to get hung up around makes or models and things like that. Now we can go back to our system, and first of all, we've talked about your budget, I'm the sales guy, I get paid on commission but now I've got to go to my sales team. Now it's the over to my engineering team. Now it's gonna go to engineering. I need to collect a design retainer. You'll see we've got now in this version a place for design retainer, so collect 2.5% to 3% as a design retainer, if they're giving you "yes" all the way to the bottom, you've got a number. And if you can collect a check there, your odds of getting the deal just went through the roof. Now you take something back to your design team and for us, what this is, is valuable proposal intake. Because now you've told me I need this many things and this is the dollar amount agreed to. When you say you want TV's in the bedroom, I'm looking and I'm saying, "Well, I got three and I've got a budget of $600 dollars, let's go find a Samsung, LG, or Sony that fits in that budget."
It can't be a grand or we're over budget. Now I can build that detailed proposal, you've gotten paid to have it written, and you've gotten a check from the client. Now you go back with a proposal that's just fleshed out with the makes and models in the rooms etc, but there are no surprises - this is what we talked about. And that's the process.
Ron: What percentage of companies would you say are charging a design fee after they get budget approval?
Curt: Small, really small. Fraction of 1%.
Ron: Why do you think that is?
Curt: I think because it's you have to have something to base it on. How it's done today, I take my notes and I go build the proposal. Well, if all I've got is notes on a yellow pad, I don't have anything to charge a design retainer on. I think the challenge has been that you've got to have a structure. I've sold design retainers on a front and back piece of paper. I sold a half-million-dollar system that way the first time I tried it. This goes back to, I think it was Steve Hayes at Speakercraft. He was a Hayes, so he's a genius, too, right?
Curt: They did a lot of training back then and he challenged the guys in the room, I was one of the guys in the room, that you can do this. I went and I made the pitch and I developed budgets all manually. The project we had was a half-million-dollars and I was like, "Well, I need to collect a design retainer," and we were going to do a full design for this - all the engineering, etc. I flipped it over and I breathed hard and I said, "I need a 10% design retainer," and they're like okay. And I was like, "Unbelievable! It works." But you got to have something to base it on, I think that's the challenge.
Ron: What do you think that the right amount is? And what do you think should be delivered in exchange? Is there a right set of asset deliverables that should be done that should be the product of a design fee? I know that's a loaded question.
Curt: It's all about setting expectations. Yes, there should. You should set an expectation about what you're going to do. I would show them. I'd show them an example of your proposal and say, "I'm gonna bring you this." Now, that proposal in my view now is going to take those 7 TVs that are "good", "better", "best" with a dollar and now they're gonna say to pick the Sony model this or Samsung model that, Sunbrite model this out on the patio or Sierra whatever.
And what you're gonna come back to is what I would call a "detailed specification." It's less a proposal now because we have a scope, we have a budget. I'm now going to come back to you with all the parts and pieces that are gonna be required to make this dream reality for you. And it's going to be these rooms, these makes and models. That should be the deliverable and these days you can do that. I mean 2% is an adequate budget to get an initial proposal put together -
Ron: In terms of project engineering?
Ron: At Blue Dog, this is a big piece of your business, right? Proposal and engineering documentation?
Curt: Yes. And if the question is, what percentage of jobs you get in engineering?
Ron: Yeah, and what should that engineering be?
Curt: All of them! Obviously, we would say all of them. In the past, that was pretty close to true, systems were a lot more complicated and everything was centralized it was all analog, there was a lot of cabling and even a "simple system needed engineering. Today, we see a lot of systems go out that are what we call "hang and bangs." It's a TV on a bracket with a Sonos play bar and a sub and an amp with some in-ceiling speakers. In truth, that doesn't really need engineering. They're going to be done quickly, it's all single point cabling. I would accept that doesn't necessarily need engineering. I would submit that just about anything beyond that benefits from some level of engineering. The question is what level of engineering? Well, if you're pulling wire, I think that you should have what we call a rough-end plan. This doesn't have to be rocket science, you can drop little icons on a PDF if you want. You've got to show your technician your penetration point, floor wall, ceiling and where's it going to be.
You need to be able to show that and if you show that, you don't have to spend a lot of time telling the technician what he's got to do. Your drawing is what's going to support that. When I talk about supporting the different disciplines, we've talked about the proposal and supporting the sales. In your business process, if you have an accurate proposal, that accurate proposal should translate right into engineering, and then the question is simply what engineering. Getting back to how much your design fee should be, we believe that every job needs a proposal. 2.5 to 3% will get your proposal, that would cover your cost of getting proposals written, particularly if you're collecting design retainers because they're paying for it, you're not lost. There's a lot of soft cost that is lost because people don't track how much wasted time there is on proposals that don't close. If you can get your close rate up, you can charge for it then 2%. I think 2.5% I would do, that's covered.
Ron: 2.5% buys the proposal?
Curt: It buys the proposal. And then, what we do is we put in a budget for the actual engineering. When I'm writing that design and that detailed specification, we're going to say, "Well, this job's going to need what to support the installation process?" Well, it's going to need a rough plan, need a rack elevation drawing, a point to point schematic, lighting control. Based on that, now I have the scope. I know what my drawing is going to entail. In our world, we'll do a fixed fee for that now, and internally you could do the same thing. You'd say well if we're gonna do engineering, what engineering you're gonna do?
You might just need a rough plan because frankly, everything is gonna hang on the wall. If the cables are there, you're good. That's what you've got to decide. We put that in as a line item kind of like programming. How much programming you are gonna need? Well, I put that in as a line item at the end of the proposal because that's the only way I'm gonna know remotely closely how much programming I'm going to need. That's the approach we take today.
Ron: What do you say to the folks that are listening that say, "How in the world can I charge my customer 2.5-3%?" I'm going to do simple math in my head, I think I might get this right. For a three hundred thousand dollar project, my proposal fee is seventy-five hundred dollars. How am I going to get my customer to pay me seventy-five hundred dollars if I get this job? They think I'm going to get all the profit from this awarded project. That's the cost of doing business.
Curt: Well, that's a legitimate question. That's why I would actually in these days you could even tear that a little bit because a job that size, what you have to keep in mind is so many of the projects just aren't that big anymore.
Ron: I only went there because the math was simple - I did it in hundreds!
Curt: Well, it's more about $50 to $100 thousand, that's the vast majority. If it's a three hundred thousand dollar job, frankly, you could probably do a 1% but you want to get something because right now you're writing proposals for free. I think that it's a value proposition, it's saying that I've got to go back and I've got to engage my engineering team. Architects drawing up plans and specs. They're gonna charge for their work and I think that you have to have enough respect for what you're giving them to value it yourself. If you're gonna go engage paid people to do work then you should be able to charge for that. I know guys are doing it. I mean I talk to guys around the country that are successfully doing it. I think most prospective clients understand that. But I know one thing for sure if you don't ask you won't get.
Ron: Yeah, amen. If you don't ask, you're guaranteed to not receive it.
Curt: I think you're if you have a process and you're confident in your process and you can show them what your deliverables gonna be, you're establishing credibility and I think people like that.
"There was a period in my past where One Firefly or Firefly Design Group didn't only do work but we went out and did some direct projects. I never had a client once tell us no to a design fee."
Ron: No, I agree. There was a period in my past where One Firefly or Firefly Design Group didn't only do work but we went out and did some direct projects. I never had a client once tell us no to a design fee. I mean, it was almost like we got to go get our smart people and spend hours, days, weeks, and months engineering and thinking about your project.
Of course, we should be compensated for that. I think it's just a matter of those listening, having the confidence and believing in themselves and believing they're worth it and their time's worth it. The customer will pay for it. It's just how you present it. I got a comment here from Steve Powers, he says, "I charge for scope, development, documentation." Thanks for that comment, Steve. Steve tell us how you do it. How often do you get your customers accepting that? Do they ever push back on you? Drop that into the comments. Leslie Albert says, "I still talk about how detailed Curt is and, yes, that scope!" Steve just answered us, "He says you can take the bullet point scope and go elsewhere if desired. I charge for each level of the work because as Curt said I have to do work to do any level of work for a client." I couldn't agree more. Your time is valuable Curt, your team's time is valuable, and everyone listening, your time is valuable.
Curt: I wanted to show you there was another doc that I sent you that we call the "concept drawing." This is something that anybody can do. I mean not to give away what we do, but this particular deliverable is our simplest deliverable. A design fee, that initial design retainer. All this is, is putting pictures on their floor plan. We call it a concept drawing, you can call it whatever you want but fundamentally, I'm going to take your floorplan, I'm going to put it on a nice architectural drawing, and I'm going to put pictures of what's in the room. The concept allows the customers to understand what it is they're going to see in the space. If they're going to walk into the family room, they're gonna see a TV, a remote control, they're going to see or not see speakers if they're in-ceiling or invisible. A concept drawing, we go to a little extra effort in that. We take all the images and make them with translucent backgrounds, we pretty it up. But this can be done in a number of different ways.
This is a great deliverable to take with that report and it's not hard to put together. Now it adds a little more value to what you've done. So you say, "Well, Mr. Client, we're gonna collect this designer retainer, we're gonna go build a detailed specification, and we're gonna build this concept drawing and we're going to help you understand what you're system is gonna be if you go with us to commission your project.".
Ron: The deliverable in your case would be a proposal and this drawing?
Curt: It could be either or both. We let people pick. I've had people go back with just the output from the scope and budget, they'll just go, here's the scope and budget and I just want a concept drawing and I'm going to go back and talk to them about that. You could do that. We have people who just do the proposal and just send me a proposal, that's all I need. We have some that do both. Again, it's what your comfort level is. Maybe one client might be easier or harder than another. It's good to have a few tools in your toolbox. What I wanted to try to emphasize is the process, less than about what can we do. Because this is something anybody can do. And it's really a commitment to an effort to scope, budget, sell, and shorten that sales cycle by at least one revision one meeting. And these are some ways to do that.
Ron: I'm a big believer in this philosophy. Just out of curiosity, you deliver this to your customers as a full-size PDF and they print it locally on a printer in their office and take that into customer meeting? Or how do you recommend it?
Curt: Yeah. Going back to the COVID lockdown, you can share your screen. It's a PDF that you pull it up on the screen and show it to them on screen.
Ron: That's where I actually wanted to go next and that is we are in COVID and folks are having to remote sell or do this discovery process remotely. Do you have any tips or advice for the folks that are listening in terms of how to best conduct that virtually?
Curt: Well, I think we've touched on it. My approach would be, everybody's familiar with Zoom at this point and people that weren't, are now. Approaching your client and saying, "Look, we all believe that this is going to ease up. We all believe that you're gonna get back to work on your house or your house is moving along." What I've heard is that you know the sales process is still moving. What we're accustomed to is having salespeople going and meeting with somebody. Let's stay out of the car and use this as an excuse because frankly, I think going forward there's a truckload of wasted time driving to meet clients. The silver lining to this could be that we could start saving a lot of drive time by saying, "OK, Mr. Client, we're going to jump on Zoom." That gets back to my point of why did we release the app prematurely, it's because it is a tool that you can use online and you can talk about budgets so you could go online with a Zoom call. You could build out a budget, walking through, and talking them through have some numbers to point to and then pull up this concept drawing you're going to present for them that's an example of a proposal and say, "Let's go ahead and get this thing nailed down so when construction resumes in August in full, we'll be ready and have materials ordered, we'll have your drawings done, we're gonna be ready to go to work." It's an opportunity to stay in touch with the client.
Ron: Curt, what advice do you have for the folks that are out there listening? In terms of how to come out of this COVID-19 situation, you've been through some economic ups and downs in terms of being an entrepreneur and owning your businesses and working with many hundreds of business owners. Any advice for our audience in terms of how to make sure they come out of this thing strong? Ready to fight and grow?
Curt: Yeah, I think it's a good opportunity to work on process. I've used the analogy of this industry being like an assembly line and there are six steps. At some point, I'm gonna do a video, "The Six-Step Video." But fundamentally, once you've sold - there's a sales process and we've spent the whole call talking really about the sales process. But once you've sold, now you're going to order, receive, stage, deliver, install, program, invoice. It's seven steps but you're gonna do that over and over. All that really varies is the amount of stuff that's going into the particular project. It's like a remote assembly line.
We really focus on product category selection, if you don't have a product mix that's well thought out like, "What in-ceiling speaker are we gonna sell and why?" And, "Let's not sell every flavor there is, let's pick six models that represent 90% of what we do and sell those." Now, I can buy more of them. I can get better pricing on them. I can have my own advanced replacement. If I'm selling the same control processor over and over, if I'm selling the same TV or the same projector, I would focus on your product by category. Take each category - display, speaker, rack, surge, and don't buy a bunch of them. There's a learning curve to everything you order and you're ROI is how many of them can you sell once you've sold the first one because every item I talk about volume control, even volume control - I've run into this before where there are eccentricities to it the stupid little terminal block on one model wouldn't stay on. We'd always have to fidget to get the thing in the wall because as it went into the wall, the terminal block would come loose and you'd lose the channel. We'd have to scrap that one, find one that works, and then sell a bunch of them because you've got to get it into your system, you've got to order them, you've got some degree of - it can be a TV wall mount bracket, there's still a way of getting it assembled.
So pick it and stick with it and sell as many as you can until it's discontinued, ideally, or a better enough model comes along that it warrants changing it. I'd work on product line selection, I would work on process in terms of reports. You can work on your report structure, getting labels printed. I'll close with this thought, back when I was in the integration business and we were using these tools, I got introduced to d-tools back in 2001, but just insert software because the software will do it, I look at it as being the seat of a three-legged stool and the legs were sales, administration, and operations. If you had that accurate proposal, then you have a deliverable that will support those three areas of the business, you'll have reports to support sales. Report drawings. A concept drawing is a drawing or a proposal is a report. You have purchase orders and picklist for administration and you have engineering drawings and checklists to support operations. What I hated was the Monday morning four-hour marathon meeting where we all talked about all the different projects. You have the whiteboard, "What's going on in this job, and what's going on in this job?" I'm like, "Let's just print a report. You know what? Where are we in the assembly line around the Jones project? Well, we need to order this. OK then give a P.O. for it the order entry people." And they'll order it then they're going to receive it and slap a sticker on it and stage it on a shelf. Then you're going to put it in a truck and you're gonna go install it ideally with a rough plan and a checklist and the technicians can do their work. Why does a project manager have to look over their shoulder if they've got a drawing that says you're going to pull three wires to the spot? I'd work on process.
Ron: Amen. It was a pleasure to have you on Automation Unplugged, my friend. Thanks for doing this.
Curt: Well, thanks a lot. I enjoyed it.
With his experience in the consumer electronics industry, Curt Hayes, CEO of Blue Dog Group, brings a unique perspective and insight into the importance of data documentation. He creates innovative solutions that can help integrators streamline their projects and improving the broken project scoping/budgeting process.
Ron Callis is the CEO of One Firefly, LLC, a digital marketing agency based out of South Florida and creator of Automation Unplugged. Founded in 2007, One Firefly has quickly became the leading marketing firm specializing within the integrated technology and security space. The One Firefly team work hard to create innovative solutions to help Integrators boost their online presence, such as the elite website solution, Mercury Pro.
Resources and links from the interview:
- Media Design Associates
- Simply Reliable
- Blue Dog Group Documentation
- Blue Dog Qualifier for Resi-AV App
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