Like the U.S. Calvary charging over the hill as a bugler belts out “Charge!” to rescue an imperiled wagon train, managed access control has arrived to save installing security contractors under attack by shrinking margins, fierce competition and a savage economy. But does this new service offering really have the mettle to fend off these threats? If so, what strategies do security company owners or managers need to know to win this business battle? To find out, SSI enlisted its own brigade of experts in the field for a unique and special roundtable.
The discussion, held during this year’s ISC West in Las Vegas in cooperation with Kantech (part of Tyco Security Products), involved a wide range of North American providers spanning from the West Coast to the Midwest, as well as Canada. The participants were Randy Brown, president, Fahrenheit 451, Calgary; Doug Penson, president, My Managed Security, Toronto; Ken Robison, co-owner and VP of operations, California Commercial Security, San Diego; and Steve Sharp, president, DigiCOM, Milford, Ohio.
As they explain, although it was not without a fair share of trial and error, these four progressive executives have fully adapted to the bold new security frontier by adopting hosted and managed services using Kantech’s hattrix platform. Step inside the war room to find out how they did it, what you can expect in doing likewise, the recurring revenue opportunities, and why doing anything less could leave your business pushing up cactus on a desolate prairie.
What have been the top challenges for delivering managed access control services? In terms of the product solutions, manufacturer support, staff and training, sales and marketing, pricing, deployment, service, the whole gamut.
Ken Robison: Marketing has been one of the largest challenges, mainly because of resources both on the financial side and time. I would say pricing has also been something we’ve struggled with, to try to find that sweet spot that would really prove to the customer what their ROI would be by going to that. That really took quite a bit of time. We’ve really got a high return on closing sales on the managed access side of things. We’re at about 70% versus 30% that want to keep that in-house. Other than that, it’s been training on the sales side. If there was stronger marketing it would help complement that as well.
Doug Penson: The software as a service (SaaS) component is certainly new to my ears. Understanding and wrapping my head around the concept, and how it functions, and what it does, and the purposes it serves have probably been the biggest challenge. When you’re having these conversations with people — we were the first managed hattrix dealer in Toronto — and you’re leading that race and there’s no one else there, like a competitor to draw some strategies and ideas from, that was a little challenging for me.
What kept me on track was the fact that we’ve been dealing with Kantech since I was 18 years old when I founded the company. A company like Kantech isn’t going to spend millions of dollars with research, development, and implementing the product in the market if they haven’t crossed their t’s and dotted their i’s. I knew I had an opportunity at that stage of the game to be ahead of our competitors in the industry.
Right now our biggest challenge is changing the mindset of the client to embrace this new path of how we do business. In our industry when selling access control traditionally, there’s a lot of infrastructure expense and time that’s never been really put on the table and exposed to the client. Now we’re pulling out and extracting those costs that were really unknown to the client, and giving that analysis and comparison to say this does have a great return on investment. It’s breaking down the nuts and bolts of it.
Steve Sharp: When we got involved cloud-based computing was really a new term that was just starting to be thrown around. We found it difficult to figure out what the story was going to be and how to explain the value to the customer. As time went on we kind of figured that out, with the help of cloud computing; everyone is using it now. People are grasping the concept much easier.
The other point was the price point. What do we sell it at? That was difficult as well, a lot of trial and error. We started taking it from the perspective that we’ve got to lower the upfront cost to make it more of a relationship with them. Then just believe if we do a great job they’re going to keep the service, much like someone keeps cable TV or satellite at their house. Those providers can’t bring cable TV to your house for $100, they’re obviously banking that you’re going to keep that service for 10, 12, 15 years. That’s much the same approach we try to take; building the long-term customer.
Randy Brown: The biggest challenge we had was me. We started doing this a long time ago because our clients were these condo buildings where they just stick a computer in the electrical room and they call us one day and say, “Our computer’s broken, can you fix it?” We started hooking up; we just put software in an office, connected to the sites by modem, and we pull the data every day. We had a backup. We knew what we were doing with the safety of the data but we never charged for that. We just did it because it was safer. We were making our money by adding the cards, key tags and all that with a big markup, but we never charged for it.
When hattrix comes along and we changed all our software, now I have to justify in my own mind that this is actually value and I’ve got to bill for it. That was the biggest challenge, getting me to turn around. It was a good learning curve.
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