Tapping into a virgin projector's market

Every day we talk to customers about their needs and although, thanks to Intel and Microsoft, their recently purchased hardware is always out of date, you have to admit it is getting to be a replacement market.

A dealership's sales growth is more dependent on the speed with which companies choose to release a new product than on actions you decide to take yourself.

Pitching to expand your customer base is the traditional method by which a dealership grows, but the snag here is that an account tends not to be profitable until it has become loyal, and that doesn't happen in the first few months.

Faced with this dilemma, one may think about broadening the scope of the product range on offer. If a customer is loyal to you, he or she will listen and probably buy all kinds of things if offered. Many resellers offer fax machines and mobile phones, and if the vendors would let us - which they won't in order to protect a less efficient dealer channel, in my view - we would love to sell PABX telephone systems and photocopiers.

One traditional business equipment dealer product is computer projectors.

These started out as video only products (CVBS/UHF and maybe analogue RGB on separate connectors) and were sold through AV dealers at very high prices to the media industries and top corporates.

Then, the manufacturers realised they would be much more attractive with VGA interfaces to run computer displays. So now, there is a whole range of products available through specialist distributors. And value-added distributors such as CRT Displays will go out with more than one projector, if necessary, and do a demonstration for you.

This market has fabulous potential, compared to the other product markets we work in, and here's why. Projectors are simple to sell. In technical terms, it's just a display, and because projectors haven't quite caught up with monitors, its output resolutions are only the same as a 14in monitor, so anything above 800 x 600 is a bit special.

This is brilliant for telesales-only companies such as ours, but also you know nothing vague can go wrong. It's also great for SMEs who, as you know, have the knack of making almost anything go wrong and blaming anyone but themselves.

The market is truly virgin. I haven't got stats, but I would imagine well under five per cent of UK companies - and presumably a similar proportion of your loyal customers - have got a display system. This leaves the majority of companies open for a call and the potential market is every company and organisation that does group training or customer presentations, which is pretty much everybody.

The pricing is just where you want it to be. Today, the price spread is #2,000 to #5,000 per unit and the most aggressive dealers are still pricing at a 15 to 20 per cent margin, and a 30 per cent margin quote will often win business. The ticket price is high, so the absolute cash margin is excellent.

Because it's a technically straightforward product, you don't really get returns, and if you do they are easily fixed. Meaning, of course, that more of your gross remains in your net.

I prefer products that have high unit prices and are technically simple because they are quick sellers and the margins are higher. Projectors fit the bill very nicely.