What are some specific strategies you are looking to implement in 2010?
Gardner: We do a lot of bid work for municipalities. Our strategy is to put feet on the street; put salespeople in front of the architects, engineers and the electrical contractors and get them to spec our products so we’re written into the specs and we bid them on a level playing field.
Going forward for 2010 we have slated to add three more salespeople to the commercial end and do direct sales to architects, engineers and the electrical contractors. We have slated to add two more reps for direct end-user sales. That is our strategy, get out there and bid the work. Margins are a little tighter than they were and you have more people bidding jobs. You have to do quality work and stand behind it.
Callahan: We have increased the marketing dollars that are being spent. In agreement with Phil, we also have plans to add feet on the street. We currently have a 45-man residential sales force; that is going to 55. We are adding additional sales support on the commercial side as well. We have a business development manager who is charged with finding specific accounts, particularly in the chain account world.
The collections department has been given training and flexibility to help stem attrition if there is an account with a financial hardship; we are providing longer grace periods. We have given some additional latitude to the customer service department to address customer concerns or complaints to stem any kind of attrition as well. That combination is one of the reasons I think we expect to see continued growth in the business in 2010.
Sandes: We don’t get paid for forecasting the future; we get paid for interpreting the present and acting quickly. In February 2009, we had probably our worst month in commercial. We had great numbers on paper, but we really improved our service margins.
Even in the service department, this is not the time to nickel-and-dime the client over time and material [T&M].This is the time to show them the value in a service agreement and leverage the T&M billing to secure the agreement.
Mahler: In 2010, as I said, we are really trying to go after in greater detail the health-care market. Also, we didn’t get into managed access until six months ago. I am telling you it is hot. It really works well in a down economy. The customer either has a full-time person or a part-time person and you can go in and completely take that away, run it for them and save them money.
The RMR you can get on managed access is tremendous. You are talking $300-$500 or more on that. Hosted video will be a big deal for us in 2010 as well. Thank goodness we added those 10 additional commercial reps.
(Editor’s note: Pat Egan was unable to attend the beginning of the roundtable. Alex Nitterhouse, an executive sales manager at Select Security, did participate in answering this question.)
Alex Nitterhouse: We need to adapt to bring in more RMR. Installation is down but the services we can provide customers is going to be up with the advent of managed access, managed video, services we can provide the customer to save them time on running their systems and letting us do that for them. Mike made a great point about going in and downloading into the panels and doing things remotely, which we do a lot of now when possible.
We have an inside salesperson now who is going to be selling key fobs, which can be preprogrammed in-house and mailed to the customer for little expense on our behalf, and is a value-add for the customer. We can do that instead of charging the trip charge to come out to hook that up to the panels.
What technologies excite you and what related services will be looking to implement?
Callahan: The things that are of most interest to us are those that help build the enterprise value of the company. That gets into all the services we are talking about that build up the RMR base. The wireless monitoring falls into that category.
In addition to that you’ve got the video, which seems to be getting some traction in both residential and small commercial. The benefits are not only the life-safety aspect or catching the bad guys in the act, but the lifestyle events. Folks are willing to spend money on things they see that adds value to what they already have installed or are contemplating installing.
When you put out the menu of options that are available to customers now, many systems today are being sold not so much because they can detect an intruder but because they offer these other services. We are focused on those types of products that help build the RMR base and have the sex appeal.
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