Five Pitfalls For Agencies And Integrators In A Commoditizing Digital Signage Marketplace

August 23, 2018 by guest author, sixteenninewpadmin

Guest Post: Geoff Bessin, Intuiface

Geoff Bessin

You’re probably aware of the Innovator’s Dilemma. An innovative company corners a market and then becomes inwardly focused, directing efforts towards protecting its existing business model and technology rather than innovating further. The result is a company that becomes vulnerable to the type of upstarts they once were.

There is a flip side to this coin, the Commodity Market Dilemma. Commodity markets develop when an outsized opportunity is combined with the existence of a well-defined, universally adoptable technology stack. In such a market there is no incentive to innovate or acquire unique skills. Inevitably, saturation occurs, flooding the market with excess vendors and insufficient differentiation. Companies struggle against virtual carbon copies and, worse, lack the skills to reinvent as – for so long – there was no need to do so.

The digital signage market has found itself in the midst of this dilemma. Sixteen:Nine estimates that there are more than 600 CMS options available today and, ironically, there is limited differentiation between most of them.

In parallel, globally, there are 1,000s of channel partners and 10s of 1,000s of agencies and integrators struggling to stand-out in the digital signage marketplace with their subtle (if any) variations on a shared technology stack.

Natural market forces of consolidation, verticalization, and dissolution are slowly cleaning house and the result is a world of losers in addition to winners – not just among the channel partners, agencies and integrators doing the creating/installing/servicing/managing of digital signage but also the end users who made a commitment to disappearing platforms and vendors.

Survival requires honest self-assessment, identifying weaknesses which – with effort – can become opportunities. The following list is offered to both guide service providers as they look in the mirror and as an insider’s guide for companies in the market for signage-specialized agencies and integrators when confronted with a list of similar value propositions.

1. Failing to track tech innovation

It’s important to be aware of software innovation. First, there’s the low-end, free-to-cheap options for basic signage. If you don’t know how the latest tech is defining good-enough, how can you be sure you’re doing better? Then there’s higher end software that exists to reduce an agency’s/integrator’s efforts while increasing offering options. The old strategy of sourcing everything in-house can cloud an openness to third-party tech that solves problems elegantly, introduces capability flexibly, and does it all at low cost.

2. Failing to accommodate increasing prospect expectations

If good-enough is now addressed on the software-side, your value proposition must raise the bar. Search engines have enabled prospects to self-educate, exposing them to both what’s possible in tech and what projects are making waves. Can you paint and deliver a picture exceeding these increasing expectations? And do so cost effectively compared to the competition?

3. Ignorance of the competitor

It’s business 101 to keep an eye on the competition but remember, innovation can come from the outside. There may be a new market entrant tackling things from a different perspective, placing them outside your radar while they eat your lunch. Trade mags and thought leaders are a start but scan aggressively because you don’t want to be late to the party.

4. Narrow offering portfolio

Non-interactive, environment-unaware digital signage is not new, novel, or – frankly – exciting. Important, yes, sometimes critically so, but it’s not the path to differentiation. Beacon technology, RFID/NFC, accessibility, Internet of Things, real-time data integration, analytics …. What skills does your team possess and can you incorporate them affordably, scalably, timely?

5. Inflexible business model

The subscription (aka recurring) model is settling in as the new way to do business. Subscriptions are a contract between peers, an agreement that payment will be made for value received. For the client, the benefit is predictable expense regardless of how future needs may change, as well as an implied guarantee that its service provider will continue to do a good job on all sides. For the service provider, the benefit is predictable revenue as long as value is delivered and a healthy, open relationship with the client. Finite project costs are risky and subject to a race-to-the-bottom mentality when competing for business.

The threat isn’t a lack of opportunity. The digital signage market is growing at 16% year over year. The threat is complacency. If you’re reading this then there’s still time to go on the offensive.