The PMR market has been buoyant for the best part of a decade now for a number of reasons, not least of which is the continued migration from analogue to digital radio. The challenge now for the industry is how to maintain and build on this growth, and to do this in a way that maintains or improves margins along the way.
The advent of digital radio has been core to our recent success. The ability to offer a hardware upgrade path to the end user, which gives them real operational benefit, is a very useful tool. But is not just about the hardware itself, digital radio has had the additional benefit of making it easier to provide and promote applications that run over radio.
It is these that have operational, quantifiable and commercial benefit above and beyond those realised with the hardware. This is where the opportunity for significant additional profit can be found, and where the industry should focus effort for the benefit of all.
Many of us who have made a career in two-way radio will find ourselves, from time to time, being asked the question: ‘why do people still use two-way radio now that we have smartphones?’
It’s a perfectly reasonable question for someone unfamiliar with the technology to ask – after all, if we are doing our jobs properly, two-way radio is often neither seen nor heard by anyone other than the team making use of it.
If we really start to ask ourselves the best way to answer the question, the content is actually very interesting and provides food for thought for all of us in terms of how we shape the industry for the future.
Clearly, we would provide the questioner with all the hardware benefits of the modern PMR radio. The major manufacturers have been successful in making the form factor of their products more aesthetically and ergonomically pleasing, while also providing additional benefits such as IP67 conformance and enhanced durability.
At the same time, digital technology has afforded improvements in battery life, the range of the radio, and clarity of transmission. All great benefits for the end user who requires instantaneous one-to-one or one-to-many communications for an on-site application.
Value of applications
But today the answer can’t stop there, because we want every device in our hands to be powerful and able to perform many software functions. This part of the answer involves the numerous applications on offer to the end user, which provide them with the commercial and operational benefits touched on earlier, whether it is logging conversations for audit purposes, synching with CCTV or geo-locating staff.
That is not to say, of course, that we have not always had access to such solutions for many years prior to digital through analogue PMR, but the perception and reality now is that they are far more easily accessible to the end user, and certainly that the solutions come in a nicer package.
And the integration between the hardware and software keeps improving, with companies such as Hytera releasing the first handsets on the market with built-in RFID chips, and with strong open APIs (Application Programming Interfaces) that allow any number of apps to be built by a growing developer community.
By marrying software and hardware we really can tailor solutions to meet the needs of almost any customer environment, and many that we are perhaps yet to come across. Dealers are adapting to this but we have to remember to keep things simple for the customer, and adapt business models to ensure that apps are part of the consultancy we offer.
For those already doing this, they are stealing a charge and business is good, but we have to remember that we haven’t arrived here by accident, and success won’t continue in today’s fast-changing world without continued investment and focus in the right areas. What, then, do we need to do to ensure the continuance of this success, and what role does each part of the chain play in this?
We all have a part to play in driving innovation
Manufacturers in our industry predominantly use a two-step distribution model. This model has worked across the globe, in many industries, very successfully for many decades – but what do we need to do specifically in our industry to ensure the model continues to work? The answer, I believe, comes in increasing the interdependence on one another and encouraging the symbiotic relationship that the parties in the model have.
In my 15 years of experience, when a manufacturer has trust with their distribution partner, and that distribution partner has trust with its network of dealers, amazing results are possible. Without trust, none of the activities that make the success happen will occur. But what are these activities, how do they work and what results should we be looking for?
The key issues are based around retention of margin and adding value throughout the chain, which should in turn add value to the end user and reduce the dependence on price as a driver for decision-making at end user level. With PMR 446, we are dealing with a commodity – a box, if you will – and it is difficult to introduce any particular added value into the equation.
When an end user realises that they need more from their radio solution – even basics such as increased security – this is where a dealer can show real added value. It is here that the sales person can rely on their training to introduce all of the extra bells and whistles to the end user that make them convinced that radio is a necessary investment, and where one dealer or manufacturer can differentiate themselves from another.
Training is at the heart
So, finally, throughout this whole experience, we arrive at the magic word, and the key ingredient that makes all of the investments made prior to the introduction of this key ingredient finally pay off in the form of increased margin and higher value sales – training.
There is no point in a manufacturer designing incredible equipment, around which an application partner then designs a wonderful application, if nobody introduces the potential for this to the reseller and, ultimately, to the end user with the need for the solution.
Manufacturers need to know what an end user wants from their equipment – they can then design and manufacture it. The distributor needs to have the trust of the resellers they work with in order to provide the training and information to the reseller.
A truly added value distributor will then provide support to the reseller to create interest and awareness of the solutions to the reseller’s existing, and potential new, end users. The reseller then needs to present the benefits of the sum total of the work that the manufacturer, application developer and distributor have undertaken to the end user, and make a sale.
Ultimately, the key to our continued success revolves around partnerships with all of the people involved in the supply chain. The ‘digital revolution’ in our industry has presented us with a host of opportunities to add value to the end user, and in doing so protect and increase profit margins as we go. Let’s not fritter away the opportunities that are before us.