Connected Design: Talk about your background in the rep business. Were you always a rep in the service of CI vendors?
Doug Cuneo, Co-Principal CET & Associates, Denver, Colo.: My personal background includes some college and then 15 years as an infantry Marine. I came back to the States and left the Corps in 2008, seven months before the world went crazy – the Recession. I started working for my father who started our company with a partner. They were an electrical wholesale commodity rep – your standard electrical rep who sells conduit, pipe and wire – but they had the Lutron line. A big part of Lutron’s basket is high-end residential lighting control and shades, so they asked me to run with that ball for them. So for the first few years it was just me, solo, covering Colorado with Lutron lines. Then, my partner, Adam Owens, had owned his own company. He was in his mid-20s, and I needed help in the beginning of 2012 so I reached out to him and asked if he’d like to work with me. Today, he and I are 50-50 partners of CET & Associates. We have three facilities: one in Park City, Utah, our main one in Denver and a satellite office in Basalt outside of Aspen.
David Thomas, President, Momentum Group, Denver, Colo.: I started in 1984 as a part-time inside salesperson on the order desk for the Mountain States Sony distributor, while majoring in Industrial Psychology at CU. Never left the industry and have been on the wholesale side ever since. Momentum was founded (originally as Sound Marketing Concepts) in 1994 by Ron and Blair Perron, and I joined as partner in 1995. Sound Marketing Concepts became Momentum Group in 2006, wholly owned by me in 2010. Rio Grande Reps was added as another rep firm in 2019 for the CI channel in the TOLA (Texas, Oklahoma, Louisiana and Arkansas) market.
Robert Keeler at CEDIA suggests that reps are the “unsung heroes” of the integration discipline, and that one of the most important functions of a manufacturers’ rep is to act as a mentor to integrators, in addition to being the conduit between integrators and the vendors who serve the CI market. Can you elaborate on whether you perceive that function as integral to your job as a rep? How do you work at helping integrators become better at their jobs?
Thomas: Momentum and Rio Grande define “acting as a mentor” to mean ethically educating the dealer on best practices. Reps are the only part of the supply chain that has the total view of the manufacturers, the dealers and the overall economic dynamics of a given market. That is hugely important when helping manufacturers forecast sales and product builds in addition to helping the dealer plan for the future. We believe our primary function as a rep is to be a “trusted advisor” to the dealer and a strategic partner to the manufacturer…
Reps are the “middle man” of the sales channel. Some are looked upon favorably and some are not. It depends on the manufacturer, the dealer and the rep. I believe that reps CAN add a ton of value. Products are important but the partnership is paramount. Value to Momentum and Rio means helping the partners be more successful, both financially and as more knowledgeable about the industry as business people.
Momentum and Rio Grande also offer substantial design and marketing assistance to the dealer community at no charge all in the effort to EARN more of the available purchases. Our firms provide the manufacturers and dealers a very large sales staff in order to support more of the dealer base with a higher level of service.
Manufacturers of all sizes are better off working with good reps, as we offer a variable cost structure. Reps don’t get paid until sales are produced. Note Sony, Samsung, Lutron, Klipsch, Savant, etc. These companies have used both direct sales as well as outsourced sales and all of them currently use reps. It’s a better model for the manufacturer if you get good, supportive, and focused reps.
Cuneo: Part of it is getting our CEDIA member integrators into new businesses. For example, Lutron got into the shading business big time in 2002-03, when a lot of integrators were not offering automated shades as a business category. So It took a lot of sales training, education, technical training, and really, being able to articulate the vision of a new business model for these guys. Now, shades is more than half of our Lutron business in our territory. Now the buzzwords for a lot of these integrators is lighting, how to specify and sell it into projects – architectural, downlights, decorative lighting – in a way that’s profitable for everyone and not upsetting to the electricians on the job, which is a standard profit center for the, as shades used to be for interior designers. So if you’re going to enter into somebody else’s lane, how do you do that?
It’s about having those business conversations, sitting down with ABC Electric and talking to them about ways to work together for profitability [for everyone] – about going in hand in hand and having a united front. It makes everybody more money because that electrician would otherwise probably not specify that high-end fixture.
Looking ahead, one of the things we’re doing at CET is leaning forward. I firmly believe that energy storage batteries are the wave of the future. By 2030, almost every home in America will have some form of energy storage, either photovoltaic on rooftops or if they’re just filling up that battery at night when usage is down and then selling it back to the utility for peak demand. As Sonnen reps, we’re trying to convince our dealers that this will be a profit center in the future – to start thinking of positioning themselves and their businesses to be able to quickly adapt when that change comes.
In fact, Sonnen was a co-sponsor at the recent CEDIA of our big celebration.
Another thing we try to do beyond your average rep firm is to bring folks who may normally be competitors together to try to elevate overall professionalism of the industry. We had 900 people at our party at CEDIA – the Rocky Mountain Mixer Customer Appreciation Night, and rented out the Ellie Caulkins Opera House at the Denver Center for the Performing Arts and got different manufacturers [to help underwrite it]; it was multi-story/food station/bar, just for friends and family of CET. We also invited other rep firms. We said, ‘Hey, you’re probably going to take people out on Friday night at CEDIA, and will probably drop a grand. How about dropping $500 with me, and take out five times as many people and show them a really nice evening?’
Various smaller manufacturers who maybe couldn’t do large parties were involved and their names were on a banner, and they got to invite their VIPs. If a manufacturer wanted to throw a party, getting people there isn’t the easiest thing because there are 800 other parties going. But if there’s one “uber” party, and all your reps are already going there and bringing their customers, it makes sense for a manufacturer to [support this and] get to see everyone they want to see there, and just spend a fraction of what they would have spent to see half the people. We’ve already reserved space for next year.
Training is a crucial element in CI – that is, keeping integrators informed of new solutions and educating them in these solutions’ benefits. How are you involved with the training aspect of being a rep?
Thomas: In addition to two dedicated product trainers and a beautiful training facility and showroom in the heart of Denver, Momentum and Rio Grande have offered the dealer community a one-stop shop for education that is available 24/7/365. Education.momentumreps.com is huge depository of ALL of our brands technical info, training videos, white papers and marketing information. Dealers need instant access to everything their manufacturer partners provide, and we put all of that into a single site so the dealer only needs to go to a single portal to get access. Cost of design at the dealer level is huge today, and the time spent researching information is both a margin killer to the dealer and a job cost increase to the end user. Momentum and Rio Grande spend the time and resources up front on this cost to provide a value to the dealer in an effort to EARN more of the dealer’s purchases. Additionally, dealers get points for product when they use our site. It’s a win-win for us, the manufacturer and the dealer. This education store is part of what we call the Momentum Difference and the Rio Grande Difference.
CEDIA makes it a point to encourage reps to be resources not just for the integrator community but also for the designer, architect and builder communities in building relationships with integrators. Talk about any outreaches you have made in this regard to any of these communities in the service of “bridge-building.”
Cuneo: Another tenet of what we do – we do it well, and the reps that do this are in a class by themselves – is push hard on the specification community. We try to sell our stuff long before the integrator even gets there. We want that architect saying, ‘Hey, I want Lutron on this project. I want this and I need that.’
So we spend a good portion of our time in front of interior designers, architects, builders, engineers, and A/V specification guys.
Thomas: Momentum and Rio Grande believe that outreach is critical but it is also difficult to get the design community to engage with the CI Channel at a high level. Designers and architects have been through the gauntlet with CI systems that have been painful at best. It is difficult to understand what we do and why a client might need our products. After all, the very nature of our business is putting together multiple, highly technical and difficult subsystems to make a single, seamless, fun and easy-to-use system that creates joy and comfort for the end user.
It is critical that the design community know that there are abundant CI integrators that can and do put these systems together perfectly every time.
Momentum Group decided to build the 924 Space to allow the dealer community to engage with the design community in an agnostic space that shows multiple brands of complementary A/V products working seamlessly together as they would in a home or a building. This initiative has allowed the community to see the elegance and simplicity of technology as an element of design vs. products and numbers on a piece of paper. The 924 Space is the epitome of “bridge-building” between Momentum and the manufacturers; Momentum and the dealers; and the dealers to their end users and the design community.
Are there any other aspects of your job that are important to mention to our Connected Design readers that we have not already addressed?
Cuneo: The old version and image of a rep was that they were only order-takers. They’d come by and take people out to dinner, and get the order. Then, through the ’90s, as technology became more complicated, the reps became the repository of all the knowledge and specification points on lines – the knowledge brokers and educators. But just knowledge of a widget’s specs isn’t enough; you can just type that into a computer and it comes up. What the modern rep should provide is more of a business and strategic education showing how certain products make your business more profitable. It’s not so much about technical specs as the strategic opportunities that one product may enable a customer to gain a competitive advantage with or increase their profitability. That’s a harder thing to find on line: how to put that knowledge together. The modern rep is really more of a business and strategy advisor and consultant, and still has to know the product, and how a particular brand fits into the integrator’s business. He has to know the customer’s business, their pain points, their skills, their efficiencies, and then get the right product in front of them.
The rep also has to have the ability to say, ‘Hey, I may rep this, but this is not the right product for you. Go to my competitor because that’s the thing you’re needing right now, and don’t just buy stuff from me because I took you out to dinner.’ You need to be a real solutions provider. That’s how you maintain trust.
Thomas: Reps across the country in all industries work primarily with 30-day contracts. We build our businesses under immense stress and cost with the risk of termination every day. It is a risky proposition and not for the weak at heart. All reps have to be very entrepreneurial, willing to accept working for literally hundreds of “bosses.” Every dealer and every manufacturer has to believe that they are the front and center of our daily focus, and we need to exceed expectations in everything we do. Like any industry, there are great companies and companies that could be better. Our job is to be the best we can be, and Momentum and Rio Grande work hard to build the internal culture that produces the best results. It’s really about the people first, the strategy second and then the products. Being a rep is extremely rewarding primarily due to the relationships and partnerships formed over the last 35 years. Of course, there are a few other small secrets that we can’t share…