12 Industry Leaders Tell How COVID-19 Has Forever Changed Security
Dealers, integrators and market analysts predict enormous demand and growth for security and related solutions coming out of the coronavirus tunnel. Current hardships are also addressed.
What do you anticipate being the biggest impacts and challenges to your business — or those of other dealers, integrators and monitoring providers ― coming out of the crisis and moving forward?
Bates: We have seen a major advance in learning how to work remotely both effectively and efficiently. That will be useful to us in how we operate our own businesses, but it could negatively impact many of our commercial real estate and multitenant customers if there is sustained decrease in need for their properties. I also worry small retail will not return to normal, or at all in some cases, as people rely more on online ordering. Both these potential trends will impact the security industry in a negative way. Safety protocols are here to stay and we will have to make sure we continue to practice them as society possibly gets more relaxed as time goes on.
Bozeman: The biggest impact will be cash flow. Other considerations include: Have the receivables diminished to the point where it will be an issue with cash flow? Has the PPP been adequate? Are integrators going to be allowed into the facilities that they service? Are the technical employees, engineers, project managers going to push back concerning going into certain facilities to do their jobs? Will the capital spending slow down based on taking a wait-and-see attitude based on when the economy will bounce back?
Campau: We received PPP money from the federal government, but that just helps keep my band together, playing music; it doesn’t really help with bringing me more customers. PPP money has been a great thing, but our employees are not working at 100%, and I’m not sure when we will be back up to full speed, especially in Michigan. Our economy has been hit pretty hard and with huge unemployment, people have less money to spend on our products and services. It will probably take several months, maybe into 2021, before we see things back to normal, or should I say, “new normal.”
Ladd: Pennsylvania and especially our region in the state is still on major lockdown. We don’t see this changing fast or completely reopened for many months. The “new normal” will be social distancing and we need to understand that business will not be face-to-face for a long while; we are expecting about 18 months of this.
Loud: There is little doubt that this will change the habits of the communities. People are going to be less likely to want outside visitors. New products and services will also arise out of this as well. Examples would be new body temperature sensing cameras to detect fevers, Near Field door locks, and other “no touch” tech. While many doors will likely close because of this, just as many new opportunities will likely open.
MacDowell: Consumer habits such as buying methods were already changing pre-COVID with DIY options readily available. This trend has been accelerated, accepted and will be considered the norm by consumers. We must adapt both in the residential and commercial setting. DIY, DIT will be fine-tuned and become more the rule rather than the exception.
Nemerofsky: Without a doubt, the biggest challenge coming out of COVID-19 for us will be keeping up with the demand to meet schedules. Most of our clients will expect 2020’s projects completed. So completing 12 months’ work in nine months will stretch us to schedule, hire or acquire strategically.
What do you believe is the smartest thing installing security dealer or integrator companies can do to minimize losses and build operations back up?
Campau: Stay close to your customers and stay close to your employees. Protect what you have and try to grow it, but it’s foolish to go after new customers if you aren’t taking care of the ones you already have. Be patient and empathetic with customers because you don’t know what they might be going through; protect cash and drive sales through inside sales initiatives. We start by asking to update a call list, then move into discussing their current system, then right into a soft sales presentation for things like panel upgrades, wireless add-ons, water sensors, LTE, Z-Wave, etc. We launched our inside sales department last fall and I’m glad we did because lots of our sales during this pandemic have come from inside sales.
De Marco: Be an innovative company and commit to a different approach in how you deliver security services. Although many have been resistant to the DIY model, lately industry sentiment is more accepting of self-installed systems for residential and small businesses. Consider giving end users the power to choose how they want to get your service ― is it a pro-installed model or do they prefer a DIY solution? If that’s not your go-to-market strategy, can you offer a DIT model? Will they want it to be self-monitored or professionally monitored or will on-demand monitoring begin to get traction? By offering more alternatives, you can expand your customer reach and be more diversified.
Fill the sales pipeline and work the referrals — use all the tools available, whether in person, on the phone or over video conferencing to make connections with your customers and prospects. The talent pool increased with the number of people that are unemployed. It’s a great time to search for potential employees that may strengthen your team.
Giacalone: Obviously spending for capital projects are and will likely continue to be scrutinized and minimized in many areas. We will see growth where systems and services offered by our industry will become part of the “new normal” of safe workplaces and mitigation. It is very likely that the monitoring center landscape could experience some of the greatest changes. For those who are prepared, this could be a great benefit. Allowing for proper and secure remote workforce lends itself to a wider reach for hiring and staff management. Bandwidth and secure connectivity will be key, and the carriers and providers must maintain what will be needed to accommodate the great increase and dependency of utilization of the Internet and connectivity.
As far as systems, you will most certainly experience an uptick both in technology and installations of access control, video and remote video monitoring. You will see more integrated technologies as temperature monitoring and other biometric monitoring. Another area that is experiencing rapid growth but will create more expansion by new players rather than benefit existing players is remote patient monitoring or TeleHealth that is sometimes tied into PERS or lifestyle monitoring. Especially with Medicare reimbursement and the need for distancing, remote monitoring and video visits are more prevalent.
All in all, I remain encouraged that the industry will grow as systems and services that provide monitoring, security and safety are more important now than ever before. The success or failure of industry participants will remain with a company’s ability to seek, understand and adapt to what will bring them success. Unfortunately, not all will fall into the growth category. Some companies will stay flat and others’ limitations to adapt will not survive.
Harris: Stay focused and plan! Keep your eye on the ball and think ahead to prepare to embrace anything that might come your way. Speak with other dealers and ask questions. This applies to financial planning as well as stabilizing any employee challenges including, but not limited to bringing them back to the office.
Ladd: Take advantage of virtual service calls and make sure that when technicians are dispatched for service or installations, that the client and/or work area is safe and social distancing is followed. If not, pull your people from the site. The smartest thing is to find better ways to do business and even consider newer or different offerings. We see elevated temperature sensing to be the new services we will be offering.
Loud: Get the PPP loan secured. Communicate … with your team and your customers. Be accessible; relationships matter even more when people are scared and looking for solutions. Don’t let your customer build a new relationship because you didn’t look for the solutions your customer wanted. Put yourself out there. Put your cellphone out for your customers to reach you directly. You will be amazed how much they appreciate this and you will gain insights to plan and grow your business better and stronger.
MacDowell: Review your past 12 months of leads. Hopefully you have a good CRM to assist you, but if not, don’t let that alter your project. Reach out to nonclosed opportunities and be humble and honest. Tell them you have availability to serve them now and you’re trying to retain your team, you’ll follow CDC guidelines and offer a reduction in your normal installation fees. Also reach out to your existing client base to offer discounts on additional products and services. Security is vitally important as we get ready to leave our homes again and return to some sense of normalcy.
Nemerofsky: Forecasting and cost control. Understanding your overhead, making sure your forecasting model is sound and accurate for sales, revenue and cash will be crucial to come out of COVID-19 at full speed.
How do you see this crisis affecting the security industry overall, looking out to 2021 and beyond?
Bates: Our biggest concern is how fast the economy will recover, but we are in a recession-resilient industry. As long as we maintain the level of expertise and service our communities have come to expect from us, I think we will be fine and continue to be a top-notch, growing business.
Bozeman: On the positive side, our industry now has many products and services available that allow integrators to participate in a remote managed services model, which not only benefits the integrator but also the end user. In some cases, due to many working from home and remote management capabilities, many processes and procedures can be managed remotely and greatly reduce operating costs for integrators. In addition, the controlling, surveillance and monitoring of facilities, access to and documentation of, in all verticals, are going to take a huge step forward in importance. Consequently, budgeting for the type of work integrators do will increase as the years go on. Similar to what we saw with 9/11, we will never go back to how things were before. The processes and controls that are being put in place will remain as time goes on. This bodes really well for our business model.
Campau: I am glad to own a 60-year-old business that is part of our critical infrastructure, so I think electronic security is a fantastic industry overall. We are faced with lots of new challenges, but there are lots of other businesses out there that don’t have all the inherent advantages we have, especially when a storm like COVID-19 moves in. For example, the insurance industry is our BFF and helps us build RMR because people all over the country need our products and services. I grew up in the life-safety business and spent my whole career here. The effects of this pandemic are definitely unprecedented, but this just forces us to change the way we think, exercise incredible patience and laser focus on taking care of our customers.
De Marco: This crisis will bring many opportunities for those prepared for it. New products and services will be borne as a result that will drive revenues and RMR. For those who are not prepared, it may be a signal for you to consider exiting the industry. Dealers and integrators need to concentrate on doing what they do best ― secure people, places and things. They need to inspire confidence in the products and services they offer for end users and deliver safety and security 24/7. This needs to be communicated clearly and effectively in their brand promise, and in delivering the customer experience. They need to be top of mind with your customers as their trusted provider.
Harris: My gut feeling is we will be just fine. Looking out to 2021, the crisis of 2020 will certainly create opportunities we might not have discovered had this not happened. Dealers are already capitalizing on new RMR-based Cloud services as a result. Beyond security is a whole world of health and wellness, remote access and information services to name only a few that all tie in extremely well with our security model. All I can see is opportunity.
Ladd: Although we have one of our largest backlogs in years, this crisis will slow down our ability to perform. We don’t see the work going away, we are actually still seeing new sales and upgrades, but actual implementation will be different.
Loud: I have little doubt there will be another DIY trend after this, but I don’t expect it to last long. I believe that people will look for pros who can help offer a more long-term, no-touch system, especially in a commercial environment as businesses seek to make employees and guests feel safe.
MacDowell: The unemployment rate will continue to rise and even when states return to some sense of openness, many jobs will have been eliminated. I’m quite sure that employers have rethought their employee count ratio and may move forward with a reduced staff. If unemployment rises, so may the crime rate. Those still employed will want to protect their castle, be it a home or commercial building. Additionally, use of home cameras will increase as workers return to the workplace and they want to stay connected to the ones they love. And if the requirement of coming to the office has been eliminated, then monitoring of the home environment such as air quality, CO detection and outdoor cameras will be in demand in order to keep an eye on the children, or the office.
Change only happens during some sort of critical, mostly negative event. We’re all in that place now. Companies that have a strategic plan, commitment to employee engagement, forward-thinking leadership, focus and positive outlook/attitude will do well post COVID-19.
Nemerofsky: We see the compliance-driven markets continuing to spend and thrive. Most integrators will now get behind RMR to help see them through another COVID-19. The cons will absolutely be tougher travel, less travel, site surveys and meetings will be done virtually where possible.
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In a time like this as an owner you have to prepare for what is going to happen three months from now. There has been a lot of talk about the impact of a crisis, and how it impacts you now. What happens now is important, but you have to prepare for the impact down the line. Such as the new technologies that will come out of this and the new opportunities that this will create. This is a time to reevaluate your business and take advantage of the time to implement new procedures if needed. Prepare for the positive impacts, and revue what could be a negative impact from this.