This ISV’s digital signage consulting expertise and subscription-based recurring revenue model are leading it to a sixth consecutive year of triple-digit revenue growth.
Before you can fully appreciate the business strategy of digital media software developer and consultant Industry Weapon, you need to understand how the digital media environment has grown and evolved over the past several years. Research from Borrell Associates shows online media promotions, which represented a $14 billion industry in 2008, reached $35 billion in 2013 and are projected to hit $80 billion by 2017. The same organization predicts that targeted display ads, which represented $3.8 billion in spending in 2012, or 19 percent of all local ad spending, will be more than double the size of any other local ad category by the end of this year.
David Wible, CEO of Industry Weapon, laughs whenever he thinks back to 2007, the year he joined forces with COO Craig Hanna and CTO William Chufo by merging with their private-labeled e-commerce and multimedia company, Adroit Concepts. “We had very little knowledge about on-premises IT, so everything we did was centered on providing IT services via our private e-commerce data center. Who could have predicted that the skills we were developing as an ASP [application service provider], combined with our multimillion-dollar investment in a private e-commerce data center, were putting us on the forefront of the cloud computing era, which came about a few years later?”
The software developer’s success wasn’t merely a result of luck, however. By 2008, Industry Weapon recognized that its private e-commerce data center was the perfect platform not just for delivering websites, but it could be used to allow marketing and communications customers to design, share, and manage digital content more easily, too. “We saw a growing need for publishing multimedia content to digital signs, video walls, interactive kiosks, mobile phones, desktop computers, and IP phones,” recalls Wible. “With so many end devices, we knew we needed to develop digital media solutions that were hardware and OS agnostic, and we needed to make it as easy as possible for customers to pull down socially relevant content such as weather, news, and trivia feeds.”
Build A Profitable Digital Signage Software Company With Strategic Partnerships
In May of 2008, Industry Weapon launched its CommandCenterHD content management platform along with free 24/7 support and free unlimited personalized training. “We patterned this concept after the Zappos business model,” recalls Wible. “The idea is that customers shouldn’t need a manual to figure out how our content management platform works. They only need to call our company — whenever it’s convenient for them — and our certified instructors can walk them through the program at no cost.”
The software developer sells its digital signage software as an annual subscription, starting at $750 per device with discounts offered as customers add subscriptions for multiple devices. After customers make their initial subscription purchase, Industry Weapon finds that they then increase their subscriptions 226 percent the following year, on average, which the software developer attributes to its Stepping Stone Strategy. “We start customers with an introductory program that focuses on a blend of content and tools to meet their most important digital media goals,” says Wible. “As customers work closely with our personal trainers and their dedicated account manager, they are introduced to more advanced uses for their digital content programs, and over time we help move them into more complex programs that help them reach additional business goals.” An example of this could include migrating a client from static kiosk displays to interactive messaging such as customized product configurations and surveys.
The software developer also realized that, due to the myriad of devices and a growing customer base, it needed a way to deliver on-site support and services without losing focus on continually developing its technology and content support. To alleviate that problem, the software developer made another bold decision to develop a reseller channel to perform on-site installations and services. “By forming close partnerships with value-added distributors like BlueStar [see sidebar at left to learn more about Industry Weapon’s partnership with Blue- Star], we’ve developed a channel of 250 resellers over the past few years who use our software as part of their digital signage deployments,” says Wible. “In addition to supporting resellers by recommending specific components to bundle with our software, we support their go-to-market strategies by providing them with free 24/7 support, which they can use to get answers to digital signage product questions and assistance with digital signage implementations.”
Wible adds that since the beginning of his company’s channelpartner program, Industry Weapon has worked only with partners who share the same vision for customer service. “Every now and then we’ll run into a situation where a reseller will insist on using a specific digital signage hardware component because of a commitment to a specific vendor or because of a financial incentive,” says Wible. “If we feel their decision could compromise the project, we’ll walk away from the deal rather than putting the end customer at risk. Smart resellers realize they may have to forgo using a particular vendor and put their long-term customer relationship ahead of the immediate sale.”
But, even in these worst-case scenarios, Wible says Industry Weapon never attempts to sell digital signage displays or other hardware components directly to an end client. “We have a pretty simple, two-page reseller agreement that gives resellers access to our software and allows them to lock down deals,” says Wible. “If we run into a disagreement with a reseller, we’ll discuss the issue, and ultimately we may need to part ways, but we never want to do anything that would disadvantage resellers.”
Maximize Digital Signage Sales With Consulting, Data Analysis Expertise
To date, Industry Weapon boasts a 97 percent customer retention rate, which it attributes to developing a service business that complements its distributor and reseller partners. “We own the day-to-day support and training relationship with customers,” says Wible. “Our resellers own the business relationship when it comes to submitting proposals, conducting on-site visits, installing digital signage equipment, and collecting payment from customers. It works out because resellers focused on hardware and installations are not equipped to deliver a hightouch program for every customer, and we’re not equipped to do truck rolls for customers needing on-premises help installing or troubleshooting their digital signage equipment.”
A typical digital signage project between Industry Weapon and a reseller partner could include a flat-panel display (typically 42 to 55 inches), media player (sometimes embedded in the display and other times physically attached to the display via a dongle), operating system (based on customer’s need/ preference), plus Industry Weapon’s CommandCenterHD digital content management software. The software developer also includes an online portal that resellers and clients can use to create, store, and update content and to integrate third-party content services (e.g. The Weather Channel) into their digital displays, and it includes unlimited content storage with each CommandCenterHD subscription. “We not only remove the complexity of selecting the right size and type of digital signage solution, but we act as an extension of our reseller partners’ businesses by engaging with the digital signage decision makers [typically a director or manager in the marketing or communications department] every 30 days,” says Wible. “In addition to ensuring they’re happy with their purchase, if we uncover any additional hardware sales opportunities, we’ll bring partners back into the conversation to help close the sale.”
How Big Data Leads To Digital Signage Sales Growth
One area where Industry Weapon is seeing a growing interest from end customers is the need to capture metrics from their digital signage displays to make more informed decisions about their programs. Industry Weapon sees this trend as part of the Big Data trend many analysts are talking about. “In a nutshell Big Data refers to all the unstructured information companies have that’s very important but can’t be contained in a database,” says Wible. To make use of this data, Wible and Industry Weapon believe it requires the assistance of a data scientist, and as a follow-up to its hunch, in late 2011 it moved out of its 3,200-square-feet office to a nearby location with 6,700 square feet. “We needed the extra space to accommodate a planned rollout of our expanded data analyses, education, and training services,” says Wible. “Presently, Industry Weapon has three data scientists on staff, dedicated to helping end users leverage their digital communications more effectively. “When hiring for this position, we looked for candidates with demonstrated skills in connecting structured and unstructured data sets,” says Wible. “This criterion alone eliminated many applicants.” These data experts work with Industry Weapon’s customers to analyze information being produced via digital media playback, content experiences, and audience interactions with interactive kiosks and mobile devices. The data scientists evaluate up to 40 data points to spot trends that they then use to advise Industry Weapon’s customers about making specific changes to their digital media programs. The Big Data program also leverages Industry Weapon’s dynamic image and video engines, which enable clients to automatically create personalized video clips from their static images and data and to present key messaging in a variety of formats. Today, 30 percent of Industry Weapon’s business comes from its content creation and data analysis services, and Wible predicts that number will grow to 50 percent within the next three years. “As clients get more comfortable with their digital communication networks, they almost always leverage more of our data services to create more personalized messaging directed to specific departments, executives, and other individuals,” says Wible.
Global Expansion Necessary For Future Triple-Digit Growth
Industry Weapon has enjoyed between 150 and 300 percent revenue growth each year since 2009 (ironically at a time when the economy bottomed out and many businesses experienced downturns in sales), selling subscriptions to its software and providing content creation and data analysis services. “In the past, any sales opportunities outside the United States came from U.S.-based companies with overseas offices,” says Wible. “Going forward, however, we’re being much more strategic about our international expansion.”
In 2013, Industry Weapon selected digital signage hardware providers Elo Touch Solutions, HP, and Intel as its international go-to-market vendor partners, which enabled the software developer to quickly connect with reseller networks outside of the United States. “We’ve developed a presence in 150 countries in the last six months alone and business is really taking off,” says Wible. “Having 24/7 support in place was a great base to have in place, too, since we now have so many resellers and end clients in different time zones. We purposely limited our go-to-market strategy to just three vendor partners because we wanted to ensure our digital signage software solution would be bundled with only quality hardware products. Plus, we felt that each of these manufacturers fit our company’s philosophy of going above the status quo to provide exceptional customer service, which is something that no matter how large our company grows we can’t afford to lose.”