CEOs Roll With the Punches, Plot Higher Profitability
In an exclusive roundtable, executives from four installing security contractors shed light on how their firms successfully navigated the recession to emerge primed for future growth. Find out how they adapted to changing market conditions, among other strategic moves.
What operational challenges are you facing in 2013?
Lindberg: Staffing has always been a hurdle and it still is. I know we have some relatively high unemployment in this country but they are not knocking on our door to apply for jobs. I don’t know where all these people are. We still have trouble staffing virtually all positions. It’s not just technicians. It’s getting the right person in the office and the right salesperson. Staffing is our biggest hurdle.
Successful marketing campaigns can also be a real challenge to figure out what works. It seems like it was simpler 10 years ago. Today, sometimes you feel like a campaign should be showing results and they don’t. I think it is probably a bigger trend in marketing in general that there are so many different ways to market today. Sending out mailers that may have worked 20 years ago … today everybody is just flooded with information, marketing campaigns continue to be a challenge to figure out which ones work and which ones don’t.
We have a fairly elaborate tracking system to track where every lead comes from. We calculate how many of those leads turn into jobs and how many turn into monitored accounts, and we track that with what the campaign is and how much we spend on the campaign. We actually calculate how much each lead cost for that campaign and then how much each job cost and then how much each account cost. It is challenging to find marketing campaigns that are successful and they pay for themselves.
Morris: I could copy and paste a lot of what John just said, but if I had to name two operational challenges it would be marketing and human resources. The challenge with marketing, we are a whole lot different because we do serve rural markets. So, where do we put dollars into radio and TV and print where it can be effective? It is really hard to do that when you serve so many small communities. The questions we started asking ourselves in 2012 were we getting our message out? Are we marketing to our existing customer base as effectively as we can? Is what we are doing working? How do we measure the results?
In 2011, if I was sitting at this table and being honest, I would tell you you couldn’t find my company on the Internet with a search warrant. You had to search by company name or you had to know our Web site. That was the only way you could find us. I didn’t understand Internet marketing. The easiest thing to do when you don’t understand something is do nothing. As a result of last year’s [First Alert] convention and talking to some other dealers and working with [FAP support staff], we made some significant differences. So the successes we’ve had since , we now have a full-time marketing person on staff. We took control of our Web site. Changes can now be made in a matter of hours rather than days or weeks like before. Social media, we are keeping our YouTube channel, Facebook page, Twitter feed and blog current and relevant.
We continuously monitor Web traffic and search engine keywords. We monitor total number of unique visitors, as well as total page views. You can’t manage what you can’t measure. I could throw dollars out there and feel good about what I was doing but I couldn’t measure it. This is something I can measure.
We produce home technology and commercial technology guides, which have really become our business card. It is a modern day flip chart. The salespeople leave it behind and it gives the customer an idea of all the services we offer. We have actually left this behind and gotten call backs or sales from things our salesmen didn’t even talk about. We also do them for custom builders. It’s just a matter of them copying and pasting their logo onto it and the builders will give it to their customers. We customize programs for builders. Some builders want a percentage. We basically do a 10% rebate to the builder to be able to utilize it anyway they want to.
In human resources, it’s about the technicians. Since we are doing more and more IP-based work, finding qualified, trainable technicians as well as keeping our current technicians and sales representatives up to date with current technology is always a challenge. We found our best success in working with tech schools. We have a couple tech schools we work with. We approached the instructors. One actually changed their curriculum based on our input. They offered a low-voltage course but there wasn’t a piece of Cat-5 in the whole school. That’s how outdated their course was. They approached us to see what was going on in the real world. We try to recruit people from there. In a rural area, you are not going to find experienced guys from other companies, typically. We don’t headhunt; we don’t go after other company’s employees.
Lindberg: How has your experience been getting a younger person into your work force? We have had trouble with that.
Morris: Probably our last five hires have been under 25 and closer to 20, and so far it has worked for us. They get it. Everything we do is IP-b
ased. Like John Loud, we do a lot of integration, Control4. Anybody we hire, from day one, I want them ultimately to be a senior tech somewhere down the road. I don’t want hire a wire puller to be a wire puller. It is a challenge and it always will be.
Loud: Echoing what David [Morris] said, I have no problem hiring that guy who is 18 or 20 or 25. Where we have not had the success is having them come out of the tech school. It is probably because we need to work closer with the curriculum. When they come out of that tech school — and we have only tried three or four students — it has not lasted as long as we wished. The school is hopeful, we’re hopeful, the student is hopeful, but at the end of the day, from getting them from where they are to keeping them through the long run, I would almost do better if I hire that young person and we train from scratch.
One of our tough challenges is getting that guy to go from being the wire puller to being the resi installer or lead tech or even for them to transition over to commercial. Our struggle, for all the growth in commercial we’ve had over the past several years, is to get somebody to say, “I want to go learn fire” or “I want to learn access control.” We will have people come through the resi side and would love to be the A/V guy. That’s an easier path than to get somebody to want to go onto the commercial side.
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