Vigilant Flat-Rate Video Install Model a Game Changer?
A new entrant to the low-cost video surveillance market, Vigilant is paying a flat $100 fee to licensed contractors to install four- and eight-camera kits purchased by consumers.
If you are in the business of installing video surveillance gear in the residential and small commercial markets, then David Happe would like to entice you with the potential for supplementing your installation income.
Happe, whose career resume includes serving in an executive role with SSC Inc., the retail marketing partner of Samsung CCTV, is founder and CTO of Vigilant Personal Protection Systems, an e-commerce provider of various PERS devices and home security products. He’s the fellow behind last week’s provocative declaration, “We are the company the industry always feared would arrive,” which you may have read in this announcement.
Vigilant is now in the business of selling (very) low-cost video surveillance kits manufactured in Asia and sold online to U.S. consumers, with plans to also market the equipment in big box stores. As a former national buyer for Sam’s Club and Best Buy, Happe knows a thing or two about the retail environment. Where professional security dealers and integrators come into play for Vigilant is providing the licensed, insured installation work for a flat fee.
Happe held a conference call last week to provide an overview of how he plans to build out a national network of professional installers, and in doing so capture a 10% share of the video surveillance business in the United States by 2020. Audacious? I’ll say. Viable? You be the judge. He’s counting you to make his vision a reality.
Happe is also CTO of U.S. Install, which he says contracts with several hundred professional installers that cover more than 90% of existing households in the U.S. and essentially every major metro market.
“They are all insured. They all meet all of their state requirements because we have checked and they are all reputable,” Happe said.
But he needs many more professional installers to achieve his grand vision of capturing that 10% chunk of the market by 2020. Briefly, here is the flat-rate carrot dangling before you:
Happe told me he is still finalizing the fee with a few of the larger retailers the company is in discussions with; however, it looks like the flat rate paid to technicians will be $100 per camera drop. That should work out to $100 per hour or more based on installing one camera per hour.
“We’ve been somewhat guarded of that thus far as the rate schedule has not been finalized across the country yet. We are trying to get the retailers to work on slim retail margins,” he said. “We are looking at this as a way to sell more products and keep more products sold – not returned. The lion’s share of the installation revenue needs to be passed on to the installers.”
Vigilant is launching with a pair of NVR kits that include cameras, cables and Power over Ethernet (PoE) connectivity. The PPS-NVRK09 kit comes with a 720p NVR and four IP cameras ($249). The PPS-NVRK10S is a high resolution 1080p, IP-camera kit with four dome cameras and four bullet-style cameras for commercial installations ($699). End users who purchase the gear will then be put in touch with U.S. Install to be vetted and assigned a contractor to complete the installation.
“We pay the lion’s share of the installation directly to the installers giving them extra, easy work for their existing crews. They already own the ladders, the screwdrivers and the installers,” Happe said. “We simply give them more work to keep their schedules flowing and keep their employees on the clock. Easy work for them.”
If that sounds like a consumer electronics installation business model that’s no accident. Happe actually built an installation company to install televisions for Walmart, and eventually sold that business to the retail behemoth.
Is the $100 flat fee incentive enough to sign up with U.S. Install? Or do you think so-called trunk slammers need only apply for what some may view as a race to the bottom? If you are of the latter opinion, Happe stresses the strict requirements each state mandates to install security systems.
“Security installation technicians have to meet certain licensing requirements. That is pretty complicated. It’s not something that the average low-voltage or 120V cable-pulling installer or dish television installer has the credentials,” he said. “We are the only ones with this capability across the country. We are the only ones doing it on a total transparent, flat-rate basis.”
Happe contends that consumers having been “getting ripped off.” During the conference call he cited research by Security Sales & Integration, which found the cost to install an eight-camera system on average is $15,000. (See 2016 Gold Book installation statistics.) Compare that, he said, to an eight-camera system by Vigilant installed by a certified U.S. Install contractor for about for $2,000.
“The industry is going to hate us but consumers obviously will love us. I’m not going to miss lost sleep worrying about Tyco ripping off fewer consumers as we take more and more market share. We are going to change the game,” he said.
More on that lavish 10% market share Happe is gunning for. The video surveillance business in the United States is currently projected to be about $3.5 billion. Most of that business is carried out by professional installers. The market is forecast to grow to $5.3 billion by 2020. Furthermore, one in five households with broadband are expected to install a security camera within the next year.
“Obviously, the technology is changing to enable that to be able to happen. The industry is switching over from dedicated wireless to true Wi-Fi using the existing routers in homes for that conversion. We are going to take a large share of that growing market,” Happe said.
All told, capturing a 10% share of the market by 2020 would value Vigilant in the neighborhood of $530 million. To achieve this Happe said he will create a homogenized, predictable, transparent transaction for the consumer – much like ordering a hamburger from a fast food restaurant chain.
“The installation business has been over complicated by an industry that seems to want to keep it mysterious to the detriment of the consumer. It is simply not that difficult,” he said. “It is simply not that expensive and it is simply not that mysterious. We have created that homogenized, McDonalds commoditized experience for installations.”
Technicians interested in being added to the installation network can register here.
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.
A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!