Mining the Gold in Your Customer Base
In today’s competitive market for intrusion and fire/life-safety alarm systems and monitoring, it can be tough to create new customers. Alarm dealers regularly beat the bushes trying to flush out the next prospect and often give up the farm just to get a new customer onboard. Many of you reading this article know exactly what I’m talking about. Growing recurring monthly revenue (RMR) through new customer creation has become an increasingly difficult task.
Maybe we just need to look at the world through a different lens. Instead of focusing solely on growing RMR through new customer creation, perhaps the focus should be on generating more revenue from existing customers. I am referring to adding value to services you already provide (alarm monitoring) to increase the monthly amounts that customers already pay you.
Proactively offer solutions to customers beyond traditional alarm monitoring. This process involves regular communication with the customer.
Many alarm dealers operate under a “no news is good news” policy. If they’re not hearing anything from their customers, then it must be going well and they don’t want to rock the boat. Most alarm companies send out a monthly, quarterly or annual invoice to their customers and if they get paid, life is good. Indeed, it’s hard to argue with that model, but I believe there is a good possibility some alarm dealers may be leaving money on the table.
Promoting Customer Retention
Alarm dealers should position themselves with their customers as the technological and service leaders in the industry. This happens through focused communication. I know many dealers that regularly stuff newsletters with their monitoring statements advising customers of new services. Still others use their customers’ E-mail addresses to market additional value-added services. It is imperative to get the word out to your customers that your company offers more than just basic alarm monitoring services.
Let me give you a few practical examples. Most systems these days can be remotely armed and disarmed and have user codes added and deleted through Web applications, including virtual keypads. Through new technology, this service is available on even older legacy equipment.
Alarm dealers can also offer interactive video systems to their customers, E-mailing and texting of openings and closings (great for latchkey kids), and home automation, such as energy management. Dealers can even offer weather alerts, including local devices that will create an alarm if there is a tornado warning in their area. How about identity theft protection? Who better to offer these services than the company that has already been entrusted with the customer’s security?
There is great opportunity for today’s alarm dealer to be customers’ “one-stop security shop.” As we endeavor into the future, it will be essential to be able to provide more of these “affinity” type services. These services not only create more RMR for the alarm dealer, but also create more value in the relationship, which promotes customer retention. If I’m providing the customer alarm monitoring, interactive video services and identity theft protection, it is going to be hard for my competitor to take that account from me.
In any case, please be aware that your existing customer base can be a potential gold mine for new recurring revenue services. And also be aware that the more services you offer, the better you position yourself in the marketplace. You also stand less of a chance of losing a customer to a competitor with a bigger bag of tricks.
The time has come to change your mindset about what security is and what services you should be offering. Read the trades, attend trade shows and keep your eyes open to new services that fit your business model.
Mark Matlock is Senior Vice President at United Central Control Inc. (UCC), a wholesale monitoring station based in San Antonio.
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