Dealer Support Programs: a Win-Win Proposition for the Security Industry
With dealer programs, both the buyer and the seller win. There are profits for the stockholders, income to invest in new product development, salaries and bonuses for employees, satisfaction that the purchased product was well designed and will be supported and a business environment where positive referral leads are the way of life.
Dealers Can Pick and Choose Services
To place the dealer program concept in perspective, consider the selection of a restaurant. There are national fast-food chain outlets. There are roadside locations that cater to the truck driver and the motorcycle trade. There are locations at airports, in shopping malls and on neighborhood street corners. There are ethnic specialty restaurants, steak houses, and facilities specializing in pancakes and waffles. Dealers Can Enjoy Greater Assortment of Resources
From the dealer perspective, we must realize that virtually every one of them is very small and has limited resources in comparison to the seller. Generally, the dealer has limited access to capital to help fund additional expansion and growth. In addition, there is a need for training in every aspect of its business – from sales, financial, technical skills, administrative support, marketing expertise, new products – and the instant credibility of brand-name recognition. 50% of Dealers Are Part of a Vendor Program
The independent entrepreneurial dealer, which has been the origin and lifeblood of the security industry for more than 50 years, still remains strong through partnerships with program providers. While some prognosticators predicted there would be less than 5,000 dealers by now, there are still between 12,000 and 15,000 security installing companies. While the connected home and entertainment market is a newer industry, the same independent dealer business model applies. What Is the Dealer-Seller Relationship?The basic contractual relationship between seller and dealer is an important one. The previous dealer program review spoke of franchise, authorized dealer and dealer as the three basic relationships. This year, we asked the sellers if they provided an open, limited or exclusive relationship, and what the quantification of these relationships indicated during a period of time. Support, Training Are Usually NecessaryThe need for technical support is directly proportional to the technical complexity of the products being offered. Where the manufacturer, distributor or monitoring center expects the dealer to install, service or interface with the central station in a technically advanced manner, support and training are necessary. Sales and Marketing Know-How Is VitalSellers cannot expect dealers to fully know or appreciate the features, advantages and benefits of their product line and how to sell against competition; they must provide training. The dealer is expecting tangible evidence that the program affiliation will enable it to grow faster and more profitably, and secure competitive advantages. Contract Help Among Administrative OfferingsAdministrative or backroom activities have caused many a business and relationship to fail. The contracts that bind the dealer to the seller, and vice versa, should be read and discussed to the point of complete understanding. The availability of an end user contract makes the sales action more straightforward and consistent. Program Association Boosts Credit, FinancingThe single most significant change to the security industry in the past 10 years has been the advent of financing of the dealer’s business operation through the recurring purchase of the customer contracts as sold. This has opened up the high-volume sales enterprise dealer’s opportunities dramatically. Or, depending on your viewpoint, it has led to the erosion of system pricing since somebody is “giving away” security. Face-to-Face Meetings Foster FamiliarityIn the world of the small independent service dealer, there are no friends. Paranoia dictates that everyone else is a competitor trying to steal “the business.” In fact, the most common need that the dealer has is belonging to a group that can provide networking opportunities for information exchange, awareness of industry trends, a brief day or two away from the rigors of business with industry associates and the chance to develop team spirit. Frankness Opens Door to Program SuccessThere are several consistent themes in the dealer-marketing environment. Certainly, independent and entrepreneurial can be seen to apply. There must be open disclosure and trust, which may only develop over time as it is earned. Sellers are seeking performance to meet their goals, but, as an old Chinese proverb says, “The longest journey begins with the first step!” Unless you are prepared to take that step, you will never reach your destination.
For more information on this article or the Dealer Program Survey, contact Sandra Jones at (440) 285-4444, or Craig Leiser at (888) CLEISER.
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