Creating New Revenue Streams with Digital Signage

Create: 10/06/2016 - 13:00

Digital signs are everywhere—in retail stores, school buildings, hospitals, fitness clubs, hotel elevators and highways. Digital signage is a way for businesses to display information and advertising as well as gather relevant consumer data. Digital signage is also becoming more affordable and easier to use, so that businesses of all sizes can take advantage of interactive media.

“Digital signage allows businesses to deliver the right message, at the right time, to the right audience,” explains Alex Khalil, Business Development Executive, Advanced Solutions at Ingram Micro.

Solution providers who understand all the parts and pieces of digital sign solutions—and know how to sell it into various vertical industries—can tap into this growing market and earn high margins. According to Khalil, customers turn to solution providers for technical guidance on many different aspects of digital signage, including site surveys, system design, content creation, installation, programming and break/fix. 

Ingram Micro notes that the size of the digital sign market is estimated to be $35 billion in North America, with 40 percent of that revenue coming from services. Sales in display technology are skyrocketing this year. “We are seeing upwards of 27 million displays being shipped out in 2016 among the leading brands, such as Samsung and LG,” says Khalil. This figure represents double-digit annual growth.

Photo credit: Ingram Micro

Margins for solution providers on the front-end hardware for digital sign bundles are typically between 4 to 8 percent, with other parts of the solution much higher, says Khalil. “Media players and content management can yield 30 to 40 percent margins, depending on how intensive the installation is.”

Talking Points to Selling Digital Signage

Selling digital sign technology starts by overcoming obstacles. “A business customer may push back on buying displays from a solution provider and think they can just purchase them at Best Buy or other Big Box stores,” says Eric Kenyon, Senior Sales Executive, Pro AV / Digital Signage at Ingram Micro. He notes that display technology for commercial usage is different from consumer/prosumer models in many ways:

  • Runtime. A commercial display needs to operate 24x7x365, while a prosumer display needs to operate 12 to 16 hours a day and a consumer model approximately 12 hours or less.
  • Warranty and durability. A commercial display should have a more extensive warranty, one that covers hardware that will be turned on and operating 24 hours a day.
  • Orientation. Commercial displays need to have portrait or landscape options.  
  • Security features. A commercial display needs to have higher levels of security, especially if it is located in a high-traffic area such as an airport or retail store.
  • Brightness. Consumer displays are not as bright, and they may not work well (in terms of visibility) if placed in a professional setting, retail marketplace or outdoors.

Making the Sale: What’s Required

Ingram Micro outlined four requirements that will help solution providers make the sale in digital signage:

  1. Knowledge. Big retailers use digital signs in their stores. So do small businesses, schools, colleges, hotels, restaurants, sports/entertainment complexes and more. Get to know specific markets—the language and hot buttons—to sell effectively.
  2. Education. Digital signage is familiar to most people, but not well understood. The technology is evolving (displays, media players, software), and so are the form factors: traditional signs, touch screens, kiosks, embedded signs and menu boards. Be prepared to educate your prospects and explain all the different possibilities for using it.
  3. WIFM: What’s in it for me. You may be selling to the owner of a company, the head of sales/marketing, the CFO or one person who does all three jobs. IT may or may not be involved. A decision maker may have an A/V background.  Be prepared to tailor your sales presentation to different hot buttons.
  4. ROI. Digital signage is not just about flashy graphics and bells and whistles. It represents a significant investment that offers proven ways to increase sales, enhance customer experiences and turn inventory faster. Talking technology alone won’t get you far—be prepared to talk value and bottom line impact.

Kenyon also suggests that if a solution provider is just getting started selling digital signage, use a manufacturer demo program and set up a working system. “Have something to show customers. Getting a demo in your own office will help you in long run, as people need to touch and feel it.”

Get more advice from Ingram Micro by listening to the Social Chat or downloading the full presentation

About Author

Patricia Schnaidt's picture
Patricia Schnaidt
Patricia Schnaidt is an expert business technology writer. She has held top publishing and editorial positions at InternetWeek, Network Computing, Windows Magazine and LAN Magazine. Schnaidt has written countless articles, lectured extensively, and authored "Enterprise-wide Networking" (Prentice-Hall). She holds a B.A. in Computer Science from Columbia College, Columbia University.

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