Rochester, N.Y.-based Doyle Security is upselling customers on new services.
Founded in 1919, one of the niches that has helped Doyle Security of Rochester, N.Y., keep busy during the economic lull has been working alongside high-end homebuilders as vacation homes are built to install new systems. Lake homes and cold New York winters make remote security management an asset to the business. As detailed in a sidebar within the "A Clear Vision Through the 'Cloud'" feature in SSI's November issue, Doyle utilizes and localizes Honeywell's Total Connect solution with its brand to allow customers to not only monitor vacation homes but also alert them to high CO levels.
In the following Q&A, Doyle Security Director of Sales Todd Julian expands the conversation to reveal how the company has reduced attrition by getting more services into customers’ homes, all the while building more ever-important recurring monthly revenue (RMR).
What are some of the strategies Doyle is utilizing to build its monitored RMR?
Todd Julian: First, I would say RMR product opportunities. The technology in our industry is catching up on about 20 years of being dormant. All of a sudden we’ve got all this technology that is hitting the industry. An example of that would be the Honeywell Total Connect product, which gives the customer an opportunity to use the system conveniently on their PC while at work or on their smart phone. Now a customer can control the security system from anywhere, instead of just something you arm when you leave the house. So because of the additional features and benefits in that product, for example, we are able to charge the customer more per month, and they are willing to pay more for that kind of convenience.
Can you give me an idea of the composition of Doyle Security? Roughly what percentage is residential, commercial, etc.?
On the account side, we’re probably about 60/40 residential/commercial. We have a healthy mix, which has been good for the company to have.
Moving forward, what do you see as the potential and the opportunities to grow RMR?
There are a couple of ways that I want to answer that. To build our company, we want to build our recurring base. I think the one way to do it is through product, or innovative products, that give us the opportunity to differentiate in a competitive environment and also drives more features and benefits to the customers with their security systems, like Total Connect.
There is a lot of other stuff on the horizon that seems to be for the video products. I would say potentially, access control at the residential level could be something that’s a little bit futuristic, but I can definitely see that. Moving forward, that’s a recurring revenue-type product that has a lot of possibilities.
Doyle Securitys Rochester, N.Y., headquarters.
Are there any other areas that Doyle’s been focusing on in terms of recurring revenue?
We certainly have other products that we’re focusing on, too, that are RMR driven. Lifetime warranty is another one. The other big one in that arena is secured monitoring, which is a second way of communication. In the event that your phone lines get cut or your Internet is down, or whatever, we try to get two primary phone numbers of communication on all of our residential installs. For that we also drive up the monthly recurring revenue by about $10.
Have you found that the economy has made the customers a little more reluctant to sign contracts?
We haven’t had that issue. There might be some, but it’s just not an option, so we kind of prevail. All of our contracts are five years in length and once in a while we’ll get a little push back, but not too often.
What about CO monitoring and other similar offerings like that? Are you working those into your RMR also?
Yes. There is actually a law in New York state called Amanda’s Law. There was a person in Buffalo and her name was Amanda and she died from carbon monoxide poisoning. As a result a law was passed mandating there be carbon monoxide protection in all residences. So we’ve been going after that as well. That’s definitely an area of opportunity in our market for sure.
Is growing RMR with existing customers helping to compensate for a downturn, if there is one, in new business? Or is new business as robust as it’s been anyway?
Yes and yes. I would say that it definitely helps. We’re trying to look at our customer base a little bit differently. One of the beliefs that we have is that the more products and services the customer has with us, the better customer they are. Two reasons. A) Because they are paying more, but B) because they are probably way less likely to attrit or leave us.
I’ll give you an example. A customer that’s with us today that only has monitoring, we don’t feel is our strongest customer because they are not really utilizing their system they way they could. They can attrit for a number of reasons and they are probably the highest on the attrition scale because they can leave us for the lower-priced competition. They could leave us because they simply stopped using their system.
And we do get some of that. One of our fastest growing segments of attrition is nonuse and the inability to pay with the economy. So, our philosophy is the more products and services they have, the less likely they are to attrit, and the less likely they are going to be un-hooked by the competition.
We view a customer that has monitoring, lifetime warranty, carbon monoxide detection, fire, Total Connect, and Total Connect video as our strongest and best customer. Not necessarily because they are paying more, but because they have more products and services with us, and it’s going to be very difficult to our competition to unhook it. It’s going to be very difficult for the person to not use it because Total Connect is making it much more convenient, much easier to use.
We’re building habits of use to that product, and to unhook it, they no longer have fire protection or carbon monoxide protection and, obviously, no burg protection.