How to Appeal to Online Buyers With Adjacent Business Models
Telguard President George Brody discusses a range of topics concerning DIY, POTS, surviving margin erosion and much more.
In his role as president of Telguard — a leading provider of cellular alarm communicators — George Brody provides strategic expertise in building revenue, brand equity and customer service. He joins the conversation to discuss DIY, POTS and other topics relevant to the residential and commercial markets.
What is your view of the rise of DIY and its effect on traditional security dealers?
Like many things, some are good, and some are challenging. Certainly, the advertising and marketing of DIY systems has created greater market awareness for all involved in the security business and opened additional customer segments. Renters, condo owners and consumers focused on cost have a slew of DIY products available.
However, DIY units are not comprehensive security systems that fully comply with nationally recognized industry standards and best practices. Imperial Capital reported a survey with 400 police agencies looking at who gets the first response from a verified call when given a choice between a professionally monitored security system versus a self-monitored DIY system. Three-hundred-thirty-one out of 400 agencies said they give priority to a professionally monitored system over DIY.
Dealers can also take advantage of the installation and monitoring opportunities that a DIY system may provide by setting up adjacent business models to address the online buying consumer. I believe there is a thriving market for professional grade solutions that are professionally installed and professionally monitored. A majority of households utilize professionally installed systems and I believe this preference will endure into the future.
How can dealers combat margin erosion?
Service and efficiency are key factors in combating margin erosion. On the efficiency side, Telguard continues to focus on ease of installation elements in all our products. Standardization of operations, auto-set up features, templates for registration, and new product features are all targeted on making the installation faster and convenient for the dealer.
Apps, like Telguard Tools, allow the installer to essentially register and activate a Telguard unit on the spot. And if you ever need to talk to us, we provide a talented team of technical and customer support specialists who provide instant personal service to assist or resolve any concerns.
The local support the dealer provides combined with the manufacturer’s support team create a winning combination. Also, staying abreast and offering the latest technology to customers are additional safeguards.
How is the commercial market being effected by the sunsetting of POTS lines?
More than one-half of American homes — 54.9% — have only wireless telephones and the percentage rises annually. Now, the landline cutting is making headway in the commercial market with both intrusion and commercial fire systems. Having the Telguard TG-7FS-LTE Commercial Fire Communicator with UL864 that is compliant with NFPA 72 provides the dealers with an easier POTS changeout, and more control of the communication system. It also lowers the monthly cost for the customer and provides RMR for the dealer.
Typically, a dealer can offer a property manager more than a 50% reduction in the monthly cost for monitoring a commercial fire system. In addition to the growth opportunity for the dealer, the system is more reliable.
Traditionally, the two landlines that are used to communicate critical information come from the same location — no diversity — and from the same telephone company. When these lines are damaged or inoperable due to fire, vandalism, weather, construction, or any other type of telecommunications failure, the critical information cannot reach the monitoring center.
Telguard Sole Path Cellular technology offers more frequent and consistent supervision of the fire system communication path.
In October 2018, Telguard’s parent company Telular Corp. was acquired by AMETEK. How has Telguard benefitted from the new ownership?
Yes, Telguard is now a business unit of AMETEK and we have integrated seamlessly into AMETEK. As an AMETEK company, Telguard now has access to considerable technical, operational and commercial resources to fuel the continued expansion of its portfolio of security and fire products & services. As an S&P 500 company [NYSE: AME] AMETEK is a global leader in electronic instrumentation, devices and solutions solving its customers’ most complex challenges with differentiated technology solutions across a diverse set of markets.
AMETEK’s strategy is driven by new products, operational excellence, market expansion and acquisitions. We have ramped up our product development activity and are extremely excited about our upcoming new product announcements.
Also, we are in the process of adding AMETEK products to the Telguard offering like standalone UPS solutions and unique power protection solutions for our dealer base. Overall, AMETEK offers a strong foundation for the continued long-term success of Telguard and its valued dealers.
Can you put your finger on one facet of the alarm business security dealers are challenged by in particular?
We have tremendous confidence and respect for the businesses our security dealers have built over the decades — in both the residential and commercial market. We view them as the foundation of the security business.
With technology changes, disruptors, telco and MSOs, DIYs, and even the large tech company entrants, our dealers have relied on their expertise, experience and local service to continue to advance their position in the market.
They have always thrived and found ways to get customers and keep them in an ever-changing environment. Their ability to install the best systems for true security and provide peace of mind are real competitive advantages in separating themselves from the rest of field. In addition, our dealer’s flexibility to adapt to market changes with a core platform of local service and support, and speed in responding to customers are additional elements to their staying power and value.
The one item that has challenged alarm dealers is cellular sunsets and now with the 3G and CDMA sunsets coming up in 2022. But again, our dealers get through these sunsets and Telguard stands ready to assist.
What do you consider Telguard’s main differentiators?
We have built the Telguard business over decades to match the dealers’ business requirements. This includes providing new products/technology, efficient installation/operation of security and life-safety systems, backed by outstanding dealer support.
On the technology innovation side, Telguard was the first to offer cellular communicator technology in 2G, 3G and LTE to minimize the effect of cellular carriers’ sunsets. Certainly, the universal capability of the Telguard solutions to interface with virtually any residential or commercial system for takeovers, new installs, moves, and landline cutting ensure growth opportunities in all categories of the market.
New Telguard products and solutions also offer another element of growth for our dealers. For example, interactive services for virtually any installed security panel with the Telguard HomeControl Flex allow the dealer to upsell and provide new services for their customer base.
On the commercial side, reliable Sole Path Cellular Communicators for commercial fire systems give the dealer new RMR opportunities by eliminating landlines for property managers and businesses. This translates into cost savings for the building owner and increased revenue for the dealer.
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