CE Pro – May 2010 | by Tom LeBlanc

Integrator System 7
Moves in with Builder

Side-by-side showrooms demonstrate synergies, stimulate referrals and reflect System 7’s immersion in the building community.

Integration companies often look to forge relationships with builders and design firms in an effort to stimulate referrals. System 7 has taken that a step further—it has become roommates with a design-build firm.

System 7 recently moved 25 miles south of its already impressive Topsfield, Mass. office and showroom to a building in Winchester, Mass. owned by Lee Kimball design-build firm.

Upon walking in the door, Lee Kimball is on the left and System 7 is on the right.

The two companies already had a strong relationship, says System 7 president Gerard Lynch. Now that they're cohabitating, Lynch expects the two companies' referral streams naturally to grow stronger, even though no exclusivity clauses are in place.

"We understand that they're going to continue to work with other integrators," he says. Meanwhile, System 7 will continue to work with other builders, interior designers and architects.

The bottom line is that the collocation creates a nice symbiotic relationship for the two companies. When Lee Kimball chose a tenant, it "absolutely" considered that an electronics integrator is a nice complement to its offerings, says president Bruce Johnson.

He says clients are increasingly interested in home technologies and when clients ask about energy management, for instance, he can walk them over to experts at System 7.

"It gives us an advantage over our competitors for sure," Johnson says, adding that its synergy with System 7 has already grown even though the building had its grand reopening on May 20.

The builder and integrator are building a home theater to benefit both companies. "We'll do the electronics; they'll do the construction," Lynch says. "It'll be a collaborative project. All said, it will probably be a $250,000 theater, but we'll be able to show what you can get for different [price ranges]."

Thinking Like a Builder

System 7's geographic move is in sync with the direction Lynch is taking the company. He recently hired Ashley Morelli, who has a Masters in architecture, as designer/project manager. With Morelli taking the lead, the company has embraced CAD drawings over traditional integration designs.

Lynch says that by speaking the language of architects and builders, System 7 now has closer partnerships and a better give-and-take relationship with them. "It leads to buy-in from architects because they're able to look at it [CAD drawings] and contribute their own little twists."

Lynch says the architecture-centric approach and adoption by the building community is paying off in 2010. He expects System 7 to be up 100 percent from 2009 to 2010.

Given that the company was down only 8 percent in 2009 (relatively painless, compared to the industry) and was flat in 2008, the anticipated 100 percent growth seems staggering.

"Well, it's only May," Lynch says, adding that the company began seeing business pick up aggressively in 2009 but most jobs were still in the design phase. "We're breaking ground now. That plus the uptick in leads [from its efforts with the building community] are really the reason. We've had a few mega-jobs plus the phone has been ringing more with smaller stuff."

While a 100 percent swing may seem like an inordinate growth spurt, Lynch points out that the company's relative success through the recession is in part due to being conservative. System 7 uses a meticulous approach to inventory control, which Lynch says insulates it from potentially crippling cash flow problems.

"The lean and mean guys are able to get through it," he says.


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