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Dealers who are looking to expand their product and service offerings should develop a game plan bef




Think back to when you began your business. The revenue stream barely trickled in, you worried about the bills, and you had a great personal relationship with your customers. Since then, your business has grown. You now are earning more money, yet you’ve had problems with employees and maybe you’re not as close to your customers as you once were.

Growth represents not only new opportunities, but also new challenges. As a small- to medium-sized alarm firm, your company now is faced with a decision. Should you continue to grow, and if so, how? Or, should you try to maintain the “status quo?”

In the real world, the status quo doesn’t exist. If you try to stand still while everything around you is moving, you’ll either fall back or gain ground in spite of yourself. Standing still is not a viable option.

Obviously then, dealers must not only decide how they want their companies to grow, but also what they need to know and do. Following are a few things to consider before executing your plans for expanding your services.


LOOK AT LONG-TERM STRATEGIES, ORGANIZE GOALS BY PRECEDENCE

Jim Lees, president of Sentry Protective Systems in Malden, Mass., began his business in 1975 with no accounts. Today, Lees has a dealer program that includes 14 dealers installing about 1,000 systems per month. When Lees entered the mass-market arena in 1995, he traveled across the country seeking input from other companies. He learned the mistakes and benefits that other companies already had experienced.

“Prepare for growth by placing your priorities properly,” says John Hesse, executive vice president and CFO of Protection One in Portland, Ore. “Stress company service and quality of delivery of service. If your top priority is not customer service, then as you grow, and management gets further away from the actual interface with the customer, the delivery of service is going to deteriorate and the company won’t grow successfully.”


DEVELOPING A STRATEGY FOR EXPANDING SERVICES IS VITAL

Geography of service also is a factor. What happens if one of your best customers moves outside that area? Will you still provide them service? One option is to open satellite offices. When Sentry entered into the mass-market arena and began its dealer program, Lees had to find sub-contractors who could do the installation and service throughout New England and upstate New York.


CUTTING CORNERS TO SAVE TIME PROVES COSTLY IN THE END

Changing products might offer new opportunities, but be prepared. For example, imagine that it takes 12 hours of labor to install a high-end, hardwired security alarm and by switching to wireless you cut the installation time to four hours. Do you do it? You gain time, but what is the additional cost of perceived or actual reliability?


SEEK PROFESSIONALS TO MARKET SERVICES, CREATE AD BUDGET

Once you add new services or products, you must tell people. “If you’re planning on incremental growth, you most probably won’t have a significant increase in advertising and merchandising expense. But if you go from a door-to-door, referral-based, residential sales company to a mass-marketed, residential sales company with newspaper ads, TV support, and radio and telemarketing, your ad expenses will jump right off the page,” says Leiser.


SMALL FIRMS HAVE THE ADVANTAGE OF GETTING TO KNOW CLIENTS

Top management can’t be involved with the employees on a daily basis. Nor can entrepreneurs-turned-managers have the same relationship with their customers they once had. One of the strengths small-sized alarm companies have, is that in general, they have personal knowledge of the customer. They might even be neighbors in the community. But as the business grows, or if you become a mass-marketer, can you hope to establish more than a momentary repertoire with customers?


CONSIDER ALL THE BENEFITS, FORGE A PLAN, COMMIT TO IT

Lees contends that traditional alarm companies will continue to thrive at what they have done best in the past. “Other companies that have the right vision, the right commitment and the right people should give it a try,” he says.

“An entrepreneur is a person with a vision and a personal commitment,” says Leiser. “Generally speaking, they don’t have a lot of capital, but they are willing to sacrifice in the short term for long-term goals.


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