A word of advice for security dealers that operate a one-dimensional business model based on selling alarm systems to create recurring revenue with monitoring contracts: If you have the expectation to keep these customers for life, you will be doomed by attrition at the hands of integrators that provide a wide range of technologies and services to the residential market.
Many systems integrators have made the transition to multiple product offerings and services that cater to rising consumer expectation and demand. Included among a new breed of clientele is Generation Y, which comprises one of the largest population segments in a 20-year span. This generation is as large as the Baby Boom population; integrators have found success in capturing their attention and retaining them as customers for the long term.
The Gen Y segment has started buying homes, raising families and has the largest amount of disposable income with the understanding, appreciation and knowledge of high-tech products. Consider that for many people discretionary spending begins to fall off, and serious saving for retirement begins, at about 48 years old.
The Baby Boomers offer a great market for personal emergency response systems (PERS), but for substantial revenue growth over the lifetime of your customer, the Gen Y clientele can produce revenue for another 30 to 40 years. Based on the current return on investment (ROI), each account could be worth upward of $30,000 to $100,000, which is a substantial increase compared to the alarm industry business model of $10,000.
Let’s take a look at how dealers can continue providing their core security systems while increasing their customer base by offering new technologies that deliver a fully integrated solution in the home.
Expand Your Portfolio
Low-voltage services to the home include cable TV, distributed audio, telephone, computer network, intercom, home automation, fiber optics, plus many add-on products such as DVRs, IP-based video, even iPods and iPads.
For those of you who haven’t ventured into this area, the technology delivery methods are amazingly similar to the products you are already installing.
Cable TV, antenna and satellite communication is all distributed by RG6U cable, similar to RG59U for your camera systems. Computers are distributed with Cat-5e wire, similar to alarm wiring and the same as IP camera wiring.
Telephone is similar to alarm wiring, and audio is similar to both using RG59U, 16-18 AWG speaker wire and Cat-5e wiring.
Brian Flint of Audio Video Specialists Inc. in LaVerne, Calif., became a systems integrator from the audio side of the business. “Focusing on A/V left the company exposed to the competition,” Flint says. “We simply focused on the audio, but had to add the CCTV and alarm installation to our business to flourish. This helped us become a full systems integration company and added the value as a one-stop shop for our clients.”
Early on as an installation company, Flint would sub the work to other installers that were specialists in alarm and CCTV installations. This left the company vulnerable to other contractor’s work, making Flint seem more like a general contractor with a sub and little control over the quality of work and communication with the client.
Flint made the decision to learn the CCTV side and added a substantial increase to his existing business. Flint describes his company as experts in audio, but adding security to their portfolio has propelled Audio Video Specialists to be a full service company.
Structured Wiring Explained
Structured wiring consists of an enclosure between 12 inches to 50 inches with expansion capabilities, which provide the capability to place products in a uniform, organized and easily maintained manner.
Product modules are contained in an all-in-one low-voltage distribution location. The cable TV, in many cases, has cost installers hours to locate a hidden wire in the wall, only to have outdated and defective splitters and tap systems. Alternatively, in a structured wiring system, you’ll home-run the RF cable using RG6U to send the signal to the other rooms. This same infrastructure will be used for cable TV, satellite TV and antenna TV services.
Telephone wiring to each room for a landline has become a standard for many parts of the nation. Many people don’t realize the value of a landline and the importance of educating customers. For example, the only telephone service in much of Louisiana after Hurricane Katrina was the landline infrastructure system. The cell phone towers were down and out of service for most of the state, but the landlines were still working and operational. Being connected during a natural disaster can be a key selling feature. In addition, telephones in the home can be used as an intercom to the front door, paging throughout the house and over the audio system, adding additional value.
Distributed audio systems will use the same type of wire and have a different approach. Now we’re talking about lifestyle-enhancement technology and how the customer can enjoy newfound benefits. Entertainment has so many values from a mood and health perspective, to the benefits of social gatherings, better known as the party! By pulling a Cat-5 wire from the distribution point to each room, the kitchen and entertaining areas of the house for volume control, and by using 16/4 speaker wire from the distribution point to the in-wall or in-ceiling speakers in each zone, you now have a distributed audio system.
As a bonus, the customer’s iPad can be added to the system and be used as a controller throughout the house. The user can control the alarm system along with their multiroom audio, security cameras, etc. Mounting options are one area that several companies have addressed with a docking station to power and secure the iPad as a wall-mounted controller.
Assisting your client with their existing technology and bringing the sizzle to the sale adds value they’ll remember. Installers may not make money on selling an iPad, but the time to set it up and the accessories that are offered will create the value clients see in an installation company.
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Business Management · Systems Integration · Vertical Markets ·
Selling Systems ·
Structured Wiring ·