How to Grow Fire Alarm Service Revenues
Installing security and fire systems contractors too often leave the profits from selling service agreements for other competitors to procure from their clientele. Learn how marketing a service sales strategy can generate consistent recurring revenue from existing customers, as well create new ones
photo: ©istockphoto.com
Unique Facets to Marketing Service Agreements
Security integrators understand the profit potential, the positive impact of new customer relationships, and the financial stability that comes with a solid base of service agreement customers. However, lacking in almost all cases is the expertise and understanding of current life-safety service marketing methods.
Customers in today’s marketplace are looking for solutions that demonstrate value. A recent survey revealed that purchasers of service will look beyond price if the service provider can create a package of services tailored for the client’s specific needs. Survey participants were clear in conveying that most service agreements they see look the same. A common refrain among survey participants: “Everyone offers testing and inspections per code.”
Individual needs for response times, preventive maintenance, equipment replacement offerings or an annual set price including service calls and repairs are often not presented. Almost all stated the agreements were difficult to understand or unprofessional in appearance and content.
Far too many integrators utilize fire alarm service marketing strategies that are dated and contrary to current best practices. A common scenario is companies that utilize central station monitoring strategies to sell fire and security system service agreements. Although monitoring falls into the category of life safety, it’s a commoditized, price-sensitive, multiyear marketing strategy that has no relationship to selling service agreements on fire alarm, access control or security systems.
Many security integrators have experienced subpar performance or outright failure marketing fire alarm and security systems service. Every company and market niche has its own unique challenges and issues, but the formula for service sales success is consistent. Contributing factors to current, past or future service sales efforts are usually found in the following list:
Unrealistic expectations — Grow revenue, increase margins, win more jobs, sell more equipment, grow market share and improve customer satisfaction are all realistic expectations of a successful service marketing program. Success in all of these areas is challenging, if not impossible. The first step is setting realistic goals and objectives. Goals may range from ensuring every installation is pursued for a service agreement, to bundling
security and fire alarm offerings, or generating more revenue from your customer base, or approaching prospects for a service agreement on systems installed by others.
Part-time players — It is unrealistic to ask systems sales personnel or technical staff to support a service sales program when they are being pressured to make their other numbers monthly, weekly or even daily. Introducing and nurturing a service marketing strategy takes a dedicated and focused effort. The chance for success is far greater with dedicated resources rather than part-time contributors. The strategies and tactics required to sell service agreements are very different from bidding installations. Rarely is an individual gifted with the skills to do both.
Mediocre offering — Trying to market what other companies are already selling is a difficult task. If a company doesn’t have something special to offer, they are relegated to “selling” a commodity, rather than marketing a service solution. Selling testing-and-inspection or time-and-material services are not solutions in today’s marketplace. Not having a well-packaged service agreement can be the difference between success and failure. If the people on the frontline are not convinced they have something special to offer it becomes apparent to the prospect.
Flawed selling strategy — Most companies lack individuals with service marketing experience. Far too many companies struggle to understand the difference between a marketing strategy and a selling strategy. This normally results in sending the wrong individual to call on the wrong person at the wrong time, and offering the wrong services. Needless to say, the results are usually less than desired.
Inadequate service sales training — It’s astonishing how much revenue companies lose by underselling, discounting and missing opportunities due to salespeople who are improperly trained. Their people don’t possess solid qualifying skills and lack full understanding on how decisions are made across different building types. Too often their only response when hearing any type of objection is “discount.” This situation is particularly frustrating when knowing the cost required to train everyone in a company to sell service is usually recouped with one new sale.
Sabotage — Typically there are important individuals who will not fully support an aggressive service sales initiative. They may say the right things publicly, but when the boss isn’t around their actions say otherwise. They fear if the program is a success it will negatively impact their situation or create more work within their area. It’s not unusual to hear someone in operations expressing the reasons why they can’t sell service “right now,” because “we’re too busy.” This problem can’t be overlooked. These individuals must be enlightened on how the success of the program is very important to them and the company.
Poor execution — This is a broad category that covers many areas. The most common mistakes include: improperly supervised salespeople; no feedback and correction mechanism; operations is not prepared to handle new business; overlooking the role of field employees; lack of coordination between groups within the company, etc. Selling service can be a frustrating task. Having to deal with post-sale administrative and delivery issues affects a salesperson’s productivity and morale. To effectively implement a service sales program, operations and sales need a close, if not direct, working relationship.
Unwilling to seek help — Reluctance to recognize that marketing service is different than marketing systems may be the most common mistake. Companies continue to try to leverage their current marketing resources with limited success. Losing your job to another service provider is both painful and unnecessary.
Not selling a high margin service agreement on your installation is just as bad. If your company doesn’t have individuals with experience in implementing service marketing initiatives, go out and get them or provide training to your in-house resources.
Joe Siderowicz is President of Plymouth, Mass.-based AfterMarket Consulting Group. Contact him at (508) 927-4140.
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