ProSource Pushing Education, Business Practices as It Looks to Member Growth

The organization is focused on “high-quality” dealers versus sheer member numbers, and won’t “stack dealers on top of dealers,” Workman said. The latter is part of preserving the group's value to members, he said. ProSource dealers don’t necessarily want to be exclusive in a market, “but they want to make sure that anybody else that’s in the same classification in the same market is compatible,” he said, and that's measured by business practices, good vendor relationships and reputation. The specialty AV buying group has more than 500 members.

ProSource’s alliance with USAV to launch CI Edge for dealers targeting the commercial market was one of the structural changes it made to support its larger custom dealers, and it announced at its Summit last month a member services portal for information, services and tools. ProSource plans to step up efforts in education and best practices, Workman said.

There's a lot of that going around lately as the growing connected home market is creating a need for trained installers and simplified customer solutions. The fledgling HAUS (Home Automation University) company said last week (see 1603160041) it plans its first weeklong training session in April, looking to build a 2,500-member group focused on education and product training with Savant and Sonos as anchor vendors.

On how the emergence of HAUS, whose systems will involve a predictable set of curated products, will affect ProSource dealers at the mid-market level, Workman said he viewed HAUS as a “hybrid” between the do-it-yourself market and custom integration.

Both HAUS and ProSource are pitching dealers on the education they can offer. HAUS, with annual dues of $5,000, brings a training element ProSource doesn’t offer, and ProSource, with $3,850 in annual dues, brings buying discounts that HAUS doesn’t offer. A dealer might not pay for both.

The two groups say there's plenty of opportunity for each because they address different market segments. HAUS Senior Vice President-Business Development John Carlen told us there's a “gigantic, multibillion-dollar market opportunity” for dealers and manufacturers in the IoT. With a curated set of products, currently anchored by Savant and Sonos, HAUS has little product focus and more emphasis on “how to make your business successful,” he said. “Buying groups would occasionally have a speaker, but for the most part it’s one of those experiences where somebody comes in and lectures for a couple of hours, you listen and nothing really changes.”

HAUS doesn’t see the Azione Unlimited, Home Technology Specialists of America (HTSA) or ProSource buying groups -- or the Custom Electronics Design & Installation Association (CEDIA) -- as competitors, said Carlen. HAUS is targeting “a small group of the hundreds of thousands of dealers” providing home electronics services in the IoT space, he said.

ProSource’s Workman views HAUS as a hybrid organization doing some of the business management teaching that ProSource dealers get through the group’s affiliation with Vital Management and some of the training ProSource members can get as members of CEDIA. Workman’s take on HAUS: “It’s trying to hone down a simplified vendor roster of -- not plug and play -- but much more easily integrated vendor partners,” he said. Savant and Sonos are funded by the Kohlberg Kravis investment company and “collaborate differently than most vendors do,” said Workman, referring to HAUS' plan for “repeatable” Savant control and Sonos multiroom music systems. “It sounds almost like creating a replicable franchise model that could be nationwide,” he said, citing the 2,500-dealer number that HAUS hopes to reach.

“There may be a model for that,” Workman said, breaking out the installed home electronics market into two segments: customization based on the dealers’ and homeowners’ needs and a prescribed package such as the one HAUS is developing. The latter, he acknowledged, could bring the concept of custom electronics to a much broader audience. “We’ve all heard that home automation and control is going to be expanding,” Workman said, but DIY has yet to succeed because products don’t yet play well together.

HAUS’s turnkey approach is one way to address that midrange level of the market, but “I think there’s going to be other moves in that direction because every manufacturer in the control and automation space recognizes that products are going to have to get simpler, easier to install and more plug-and-playish,” Workman said. “The question is whether you go with a one-size-fits-all or whether you go with a more simplified platform that still allows a level of customization to the customer.”

IoT is one of ProSource’s target growth areas, said Workman, and its approach is to work with partners that recognize the connected home but still allow dealers to address customers individually and determine the best system for their needs. “When you get into a home, there are so many variables,” he said, citing legacy equipment and which products customers want to integrate. “You’re not starting from zero in most cases,” he said, “but integrating existing equipment with new products and bringing customers into new applications.” ProSource recognizes the IoT market is coming but is choosing to work with its vendor partners on simplified solutions rather than restricting dealers’ options to “five or seven products” that work together, said Workman. The HAUS approach “isn’t wrong,” he said. “It’s just different than what we’re looking at.”