Convergence Channel: Leveraging Integrated Systems’ Upselling Upside
Upselling to integrate systems makes more sense phased in over time, leverages existing security or IT infrastructure investments and delivers results to pay its own way. ©iStockphoto.com/samxmeg
Last month we visited the concept of value-added selling with your new and existing customers. Let’s expand on that concept with real-world selling scenarios that can strengthen and grow relationships with customers, as well as your bottom line.
I will define upselling as taking your customer to a place where the costs to operate their security and safety program declines, while technology convergence advantages advance. This is an appropriate prescription for the security department that is challenged to do more, with less conventional resources. So let’s get unconventional in how we define resources, as well as integrated systems.
Why ‘Integration’ Is Subjective
How would you define an integrated system? I’ll admit I have always questioned people when they say a system was “integrated.” What does this mean? It means different things to different people — different for consultants; different for hardware and software people; different for customers. It is really different for security systems integrators who actually have to make the systems work.
There are three elemental parts of an “integrated” system. First is its source voltage, conditioning and current load requirements. Conventional “integrated” security systems challenge those who design, install and manage the power to their systems. Second is delivering system data back to integrated systems, which can be equally challenging and requires a second communication path. Last but not least is the software that integrates the information displayed, stored and routed to the system’s users. How do converged systems help redefine these elemental design realities?
They offer new ways to migrate customers away from legacy systems to much more “integrated” systems by upselling the future business and operational advantages of network-centric solutions.
Basis of Growth, Revenue Streams
Let’s start with some basic concepts about upselling, cross-selling and integrated systems. Upselling is the process of moving a customer upward into a more sophisticated, feature-rich and scalable product or service offering. This improves revenue and profitability for the systems integrator, while providing the customer with additional operational capabilities. This works well in the retail, residential and small business worlds when you are working directly with the ultimate decision maker. This is a vertical selling tactic.
It gets more complicated with industrial-commercial customers when you are working with departmental folks and not final purchase authorities. They invariably must justify additional expenditures.
The term upselling is really not about maximizing a one-time opportunity for revenue, as it is commonly defined. Rather it’s about laying the foundation for future system integration growth, revenue streams and raising entry barriers for competitors in the future. You must sell with the confidence of a trusted advisor who is anticipating future challenges, options and solutions for your customers. To upsell effectively you must sell the business value, not the technical advantages of your solution. While this is challenging for many sales people, it is the right thing to do.
Upselling that integrates divergent systems should simplify not mystify. Does it improve security response times, lower operating costs of legacy systems, and add new capabilities that other departments or people can benefit from? These are business, not technical, reasons. Customers often get lost on the technical elegance of our solutions. They rarely get lost when it means it will save them time, headaches and maximize their budget dollars. This approach also has a better chance of gaining attention and support from the people who hold the purse strings — senior management.
Phasing In Business Value
What tactics work best with the approach outlined above? Phase it. It’s really all about time and money as with any investment that management must analyze. Upselling an opportunity to integrate systems makes more sense when it is phased in over time, leverages existing security or IT infrastructure investments and delivers measurable results over the life of the program to “pay its own way.” Now this may sound like a pretty tall order, and it is if you only focus on the technology, features and software capabilities. Concentrate on helping your midlevel contacts “sell” the upsell by positioning the business value first.
Want an example to ponder? There may be small, subtle and relatively inexpensive “upsells” that position both you and your customer for more profitable growth. A change in a NVR model could make future remote guard tours by the central station an inexpensive option to actuate; permanently or temporarily. If the customer’s business or operational requirements change in the future, perhaps the third shift guard service could be replaced by a central station service option.
Replacing one guard with an average cost of $1,440 per month (160 hours X $9) with a $640 a month virtual third shift tour nets a business $800 a month in operational costs. Does the guard also respond to onsite, locally annunciated and monitored critical condition systems? Take those signals to the central station and you can increase your monitoring charges. You get the idea.
Having that technically integrated option available in the future provides customers flexibility that lowers their operating costs, while improving your future recurring monthly revenue (RMR) opportunities for growth. While a guard replacement is an easy and often used example, think in terms of all personnel running the operation. Can you streamline procedures to enable fewer people to supervise, monitor and manage better? Remember last month’s case study that saved the customer $40,000 per month in operating costs.
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