Featured in CEPro Magazine: August 2010

How a Detroit-Area Integrator Survived Recession:

Growth comes from Cash-for-Clunkers-like system upgrade program and assembly line-like approach to system building.

Google “Detroit” and you’ll find some depressing stuff – foreclosures, houses going for $10,000, 15 percent unemployment, auto industry decline, umpire Jim Joyce.

It’s not pretty.

You won’t find many stories about thriving small businesses with anticipated 2010 growth of 25 percent. That, however, is the situation at Spire Integrated Systems. Despite its Troy, Mich. location 20 miles north of Detroit, local construction grinding to a virtual halt and a client market reluctant to spend for fear of losing their jobs, the company has grown over the past three years from five to nine employees and its 25 percent revenue growth this year comes on the heels of 12 percent growth in 2009.

Things aren’t all bad in the Detroit area and that doesn’t just go for Spire Integrated Systems, says principal Navot Shoresh. As a proud Michigander, he doesn’t always appreciate the media’s sometimes-indulgent portrayal of a collapsed region. That’s not to say that he’s in denial.

“The Detroit area has been hit hard by the recession,” Shoresh says. “However, many companies and individuals have long realized that the auto industry is no longer going to sustain their growth or livelihood and so they evolved. Many of our clients are in the biomedical field, military and aerospace, banking, software and so on.”

Thriving auto industry or not, manufacturing and an appreciation for methodical hard work are in the blood of Detroit-area folks, says Spire general manager Jason Bellanti. Spire, meanwhile, takes an assembly line-like approach to system building, which he says plays well with the client base.

Big AMX and Control4 dealers, the majority of the programming and rack assembly is done at its office. “Our customers notice that we don’t spend very much time in their house to complete a system,” Bellanti says. “We test the system in our build area before it ever goes out to a job site.”

Architects and interior designers notice, too. In fact, Spire credits its upstream growth to a referral network of satisfied clients, architects and designers.

Cash for Clunky Systems
A great referral network alone couldn’t have completely accounted for Spire’s astronomical growth through the recession – especially not in greater Detroit. It didn’t. Spire uses a rather ingenious, rather apropos marketing approach for a region affected by the struggling U.S. automobile industry, one that’s very similar to the federal government’s 2009 Cash for Clunkers program aimed at stimulating sales.

Spire began salvaging projects for clients in 2005 when its Lutron sales rep approached with a proposal to save a 30,000-plus-square-foot project done by a now-defunct integrator. “Within two weeks we had redesigned, rewired and programmed the entire system,” Bellanti recalls. “Fixing [it] and making the client happy led to invaluable relationships with the builder and the architect. This is when we realized we were on to something: there is more to be gained than just the profit on the initial sale.”

The Systems Conversion Program was officially started in 2007, two years prior to Cash for Clunkers. It’s based on referrals, often from architects or designers, to clients whose systems “never worked right,” Bellanti says. “Our philosophy was that we will not just take a project over; we make it ours. We insist on doing it our way so we can put the Spire badge of approval on it.”

The Spire approach means updating products, programming, even starting from scratch – a frustrating proposition for customers who already invested in these unsatisfactory systems. “If they agreed to have us to fix their system our way, we would take back all of their old equipment and sell it on sites like eBay and Audiogon,” Bellanti explains.

“We applied 25 percent of the equipment sales as a listing fee, and the rest went right back to the customer. These customers loved the idea, and most of the products sold for a fair amount of money, given their age. We then went to our manufacturers for some additional discount on the product to alleviate the cost, and they helped.”

Read the full article