Let’s face it; the audio visual integration industry is in a constant state of flux. Mergers and acquisitions are happening, and the larger players — backed by private equity firms — are in a race to get bigger and bigger, focused more and more on growth and increasing the bottom line. It is an environment where quarter over quarter and year over year, growth is the only metric used to measure success.
I’m acutely aware of what this environment is like. Not because I read about it on the internet or because I’ve seen it in movies, but because I’ve lived it. I started at Applied Global Technologies in 1998, after serving six years in the US Navy. I was part of a team that grew the company from a small startup to a large organization acquired by a private equity firm. I spent three years as a Senior Executive and three years as a CEO working for that private equity firm before acquiring AGT in 2016 with my business partner.
Fundamentally, everything is different when a PE firm owns a business. They’ve invested their hard-earned capital in the industry, and they expect and deserve a return on their investment in a three- to five-year timeframe. This return on capital is the driving force behind all the decisions made by the company. Growing larger, adding layers, attaining growth, and cutting costs are great formulas for increasing your enterprise value to a future acquirer. Still, they don’t do much to increase your value to your customers.
A Major Pain Point in AV Integration
We hear this every day about the larger integrators in our industry from potential clients and partners. It takes weeks and weeks to get site visits, or to get quotes turned around. There are long wait times for jobs to be scheduled and completed. The result is that clients get inconsistent experiences on projects because of employee turnover or unreliable subcontractors.
We hear that clients are getting hit with endless change orders or being nickeled and dimed to death over small things. Taking weeks to get issues resolved. Meanwhile, all the metrics for those large integrators look good. Sales are up; costs are down. All is well.
But hey, don’t hate the player, hate the game, right? Well, we’ve chosen to play a different game.
We are playing the long game, and we use a different set of metrics to measure our success.
How We Do It
We’ve chosen to build long-term value in our company by investing in our people, building a solid back-end infrastructure with sound processes, and taking care of our clients. Our value metrics include:
- Customer satisfaction scores
- Client retention rates
- Companywide accreditations and certifications
- Employee training and certifications
- Length of employee tenure
- Low turnover rates
Naturally, we do track financial metrics as well. Those, along with our other value metrics, are essential for building a healthy and robust company that will continue to serve our clients well into the future.
How AGT is Different
Playing the long game means that we put the happiness and satisfaction of our clients above squeezing out a few extra dollars of profit. We believe that if we treat our clients right and consistently do great work for them, it will return many times. That means we do what it takes to get things done right the first time.
Then, maybe something comes up, and it wasn’t our fault. Maybe the client messed up and ordered the wrong thing or wasn’t ready to start the project when they said they were.
We could hit them with a change order, charge for additional travel, make them order that $300 cable to finish the job, or pull out the statement of work and point out how it’s not our responsibility. Or, we could just get the job done and fix the problem and put a smile on clients’ faces. Maybe we do charge the client for that $300 cable, but we worry about that after the fact.
Why AGT Works
I have been through many iterations of the company, from small bootstrap startup to a large company to private equity-owned and finally to the mid-sized, privately-owned company we find ourselves in today. I like where we have positioned ourselves to be. We have the depth, experience, talent, and scale to handle any size or caliber of client. Yet, we’ve still maintained the culture, relentless drive, attitude, and client-first mentality of a small business.
We believe that playing the long game and investing in our people, processes, and commitment to our clients will build greater value over time — more than obsessing over growth and cutting costs ever could.
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