Digital Signs Mark the Way to Profits

By Mike Strand, StrandVision Digital Signage

We hear a lot about life cycle management. It’s usually in reference to a technology or a product. But the concept is equally important to our businesses and business marketing opportunities. Resellers tend to specialize in technology, develop an expertise and build their businesses within that market – but markets have life cycles too.

As long as the business market is growing and dynamic, it’s easy to grow along with it. But growing faster than a mature market is difficult – it requires winning additional business from your competitors or expanding your reach to new geographies or industries – both of which are expensive. At the same time, as a technology matures, your pricing power is compressed so you make less profit on each hardware and service sale.

That’s why many systems integrators seek ways to add to their offerings. In doing so, they often ask the following questions to determine if a new technology or business model is worthwhile:

• Will it complement my current offerings?
• Do I have (can I develop) the needed technical expertise?
• Is it something that I can cross sell to my current customers?
• Will it grow my customer base for my current products?
• Is it a growth market?
• Will it deliver post-sales revenue?
• Most importantly -- Will it be profitable?

To my mind, digital signage is the ideal new market for many resellers. In fact, I sold my Automatic Identification and Data Collection (AIDC) software company, StrandWare, a few years ago and started a digital signage company. I’m not a reseller, but I asked and answered those same questions and the answer came back -- electronic digital signs.

Digital signage delivers promotional business marketing messages and graphics (even videos or live TV), as well as community news, national and local news and weather, and other items of interest in lobbies, waiting rooms, service areas, and employee break rooms. They are generally networked and use flat panel LCD and plasma displays.

Here’s what you’ll find when you look into digital signs:

As far as complementing current offerings and building technical expertise are concerned, any reseller who works with AV systems, computers or networks is a candidate for digital signage since today’s digital signs are PC-based and run over standard Internet and network connections. You probably already have the technical expertise in-house.

You may think that digital signage is for the audiovisual guys. Even though digital signage is a graphic medium, you don’t have to know anything about graphic design. The new generation of digital signage suppliers delivers content over the Internet so you or your customers can log onto an Internet dashboard that has all the tools needed to easily input, update and maintain the pages. The content is then delivered directly to their displays at the times and locations they specify. You don’t have to actively host or manage the system.

As for cross selling, virtually every business and organization is a candidate for digital signs -- manufacturers, retailers, doctors, industrial distributors, car dealerships, schools, colleges, non-profits and religious organizations, are all interested for marketing and for employee communications. Many of these organizations are also new to traditional products such as RFID or bar coding providing additional reach to your existing offerings.

A lot of companies and organizations have already experimented with digital signs. Some have cobbled together repeating PowerPoint presentations. Others, such as banks and public venues, have sophisticated systems; but even these organizations are prospects since they often have expensive, inflexible, older systems that must be updated by the specialized vendor they bought it from – a perfect opportunity for a creative reseller.

This leads to the next benefit. Digital signs are at the leading edge of a growth market. Think about it: How many digital signs do you see out there today? How many do you think you’ll see in a few years?

Finally, profitability. Digital signage sales generally include hardware (personal computers, networking gear and high-end TVs) that still commands high margins – Okay, maybe not the PCs – and service revenues.

We’re finding that system expansions and upgrades drive incremental hardware and service sales. Beyond that, subscription revenue sharing will give you steady income as long as you renew your customer’s subscription – without the hassle of day-to-day system administration and support. Think of it as selling the bar code label print stock – and your customers don’t want to buy from anyone else.

For all of these reasons we’re seeing more and more resellers add digital signage to their portfolios. It’s a logical business extension, there’s a short learning curve and it’s very profitable.

Mike Strand is founder and CEO of StrandVision LLC, an Internet-based subscription digital signage service that is distributed through resellers. Previously, Mike founded StrandWare, a leading bar code software and AIDC company. Prospective resellers may contact Mike at mjstrandweb at StrandVision.com.