Article

How integrators are making more money from digital signage services

Digital signage integrators are setting themselves apart by becoming one-stop hubs for their customers and providing a seamless solution for every type of digital signage installation.

June 30, 2016

By Peter Stamos, President, Ping HD

According to industry sources, there are as many as 400 digital signage integrators in North America. Integrators who serve every industry are struggling with how to differentiate themselves while avoiding the need to drop prices to remain competitive.

Competitors may offer similar services, similar pricing and a similar level of expertise. So the question becomes one of creating value while retaining profit margins. Where does an integrator see the highest margin while setting themselves apart from their competition? What combination of services will increase the overall value of the offering to the end user?

Digital signage integrators are setting themselves apart by becoming one-stop hubs for their customers and providing a seamless solution for every type of digital signage installation. Some areas an integrator can explore that will offer a more robust digital signage solution, increase the company's value to the customer and, with the right combination of services, increase profit margin and revenue are:

Providing equipment

Providing digital signage equipment, such as media players, screens and cabling, offers customers a better experience as your company moves toward offering a turnkey solution. Although profit margins on equipment alone are low, bundling the equipment into a package can even out the low return.

Warranty services

Offering warranty services adds a level of trust and commitment to your client. A typical warranty is three years for equipment. Extended warranties are typically five years, which may be a compelling reason to choose one integrator over another. Profit margins on warranty services are low, but combined with an in-house repair service, a business can see a good return.

Installation services

Installation services are where profit margins begin to increase. Customers these days are looking for turnkey solutions, and offering installation services is a way your company can yield higher profits and separate from the competition.

Repair-and-replace services

Repair services are a way to keep costs down by not having to outsource to a third party. Offering a warranty and being able to keep the warranty fulfillment in-house is an area where your business can see solid returns.

Tech support

Having tech support included as a part of digital signage packages builds value for the client and allows higher markups.

Content management software and training

Having proprietary CMS software will drastically increase your ability to yield higher profit margins, while maintaining a competitive price point for the customer. Most businesses don't have their own software IP, so there will always be some level of competitive price pressure for those companies.

Where integrators can see profit margins start to increase — and make more money from digital signage services — is through the bundling of services. Having packages that include some or all of the services mentioned above will allow your business to be competitive without participating in a bidding war. As the company grows, there are additional service areas that you can venture into that can yield higher returns. They are:

Provide content and graphic design services

One potential incentive for an end-user client is the integrator's ability to create the content for their digital signage. If this is something your business can offer, you can add a "Content and Graphics" package to your service offerings. The benefit is twofold; your customer now sees you as a one-stop-shop for digital signage and you have generated another profit center.

Extended warranties

Extended warranties can be a higher-profit-margin service. However there are some risks involved. More established businesses may find that this is a profitable area to explore.

Mobile application development

Mobile applications are now being integrated with digital signage solutions to provide more targeted marketing. The ability to design and integrate mobile applications for customers is a great competitive advantage that can yield higher profits.

Financing

A business can offer one-stop-shop leasing and financing, including all end-to-end services. Keep everything in-house for higher margins.

Peter Stamos leads Ping HD's digital strategy practice, business development and marketing and execution efforts. He is also responsible for the company's growth plans, P&L and customer satisfaction. Ping HD is a full-service digital signage company.