Welcome to final installment of SECURITY SALES & INTEGRATION‘s three-part series, “How to Grow RMR With Managed Access Control.” Brought to you by Honeywell Access Systems, this material has been designed to educate security dealers and systems integrators all about managed access control (MAC) technology and how to leverage it to build recurring monthly revenue.
Part 1 served as an introduction to MAC and compared it to the more traditional site-managed access control model. It also explored the rationale for why both customer and dealer would consider MAC and reviewed potential applications.
Part 2 took it a step further by explaining the implementation of managed access control (MAC) in the form of infrastructure (hardware and software). Internet connectivity requirements, staffing needs and the roles required to support a MAC service were also addressed.
Now it’s time to complete the picture by explaining the components needed to make MAC an integral part of a dealer’s overall marketing efforts. Critical elements include changing the mindset of both customers and sales staff, pricing models to generate RMR, and identifying a system provider that will partner in ensuring the MAC program’s success.
Time for a New Attitude
The traditional, site-managed access control model where the customer purchases the hardware and software required to manage the electronic access control system (ACS) themselves has been accepted as the only way for more than 35 years. Customers assume that providing the resources to manage their ACS is the only option and do not understand all of the routine daily and regular maintenance tasks associated with managing the ever-changing access control software database.
The dealer’s sales staff is comfortable with proposing this model and looks forward to the (one-time) commission earned on the sale of ACS hardware and software.
As a result, security dealers wishing to increase the value of their ACS business should educate their sales staff. They need to start thinking more about the long-term value of the sale from the standpoint of RMR business, and how their own earnings can increase through recurring monthly commissions. At the same time, the security dealer needs to begin presenting the company as a service provider rather than simply an installer. The dealer needs to impress this concept upon both customers and sales personnel. With an effective education program, the security dealer can begin offering the MAC model as the only solution, especially for small ACS projects.
Some security dealers and their sales staffs may be concerned about customer objections to a MAC service. They fear losing projects to their competition if they fail to overcome these objections or offer a site-managed solution. However, in reality, security dealers that have already implemented MAC have discovered that the customer actually has very few objections to accepting MAC versus a site-managed system.
Once the dealer has demonstrated the true costs to the customer associated with a site-managed system (refer to Part 1 of this series for examples) the customer realizes the relatively small monthly charge actually reduces the total cost of ownership (TCO) of an ACS. The true reason site-managed solutions are so prevalent today rests on the fact that MAC has simply not been offered as an option to the customer until recently.
While Part 1 of this series explored the many financial advantages of MAC for both the customer (reduced TCO) and the security dealer (RMR), the sales staff needs to also understand how MAC can greatly improve their own financial success. Since a large part of the total sale price of the typical small- to medium-sized ACS project consists of the computer hardware and ACS required to establish and manage the system head-end, it’s understandable a commission-based salesperson would be concerned about reducing this one-time sale.
But, considering that in today’s IT-centric environment many customers are now providing their own computer hardware, some of the overall sales price (and resulting commission) has been eroding away for some time. With the traditional, site-managed model, no matter how good a given month has been in terms of commissions earned from closing sales, the salesperson starts all over again from zero the next month. Just as MAC offers ever-increasing RMR to the security dealer’s bottom line, it also adds growing commission earnings to the salesperson’s paycheck.
Establishing Pricing Models
Developing profitable MAC pricing models or bundles is more complex than simply setting a monthly service fee applied to all MAC client accounts. Although the needs of most small ACS customers will be similar, as larger systems are proposed, it becomes very important to understand your customer and then set up a pricing strategy accordingly.
Although at first glance this appears to involve a significant amount of effort, the good news is that MAC is generating such a buzz and demand is so high that dealers are likely to be able to maintain very lucrative pricing levels and profit margins.
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