How much does it cost to be competitive in the jungle that is today’s electronic security market? A lot more than it used to, according to Security Sales’ 1999 Sales and Marketing Survey.

In the six years since the last survey, the average amount dealers report spending on marketing per account has skyrocketed from $11.74 in 1992 to $29.38 in 1998. Dealers are opting to spend more now rather than paying later in lost customers.

What has caused this figure to swell nearly tri-fold so swiftly? Increased competition, heightened end-user sophistication, inflation and the proliferation of additional marketing mediums, such as the Internet, are among the factors for the dramatic upswing. In addition, the consolidation trend has created corporate behemoths willing and able to “pull out all of the stops.”

The 1999 Sales and Marketing Survey was sent to 1,000 subscribers of Security Sales. Labels were selected randomly among the readership categories of Alarm Installing Companies and Alarm Installing Companies with Central Stations. A total of 111 usable responses were received, for an 11-percent return.

Consistent with the survey’s finding that the cost of marketing per account has exploded is that the average annual amount of dollars dedicated to marketing has risen sharply from $21,862 to $40,558, or 46 percent. To accompany that, dealers report spending 8 percent of their operating budgets on marketing, compared to 6 percent in the prior study.

Despite the industry’s overall broadening in the residential and commercial sectors, the Yellow Pages and newspapers continue to be the primary target for security company marketing dollars. Other marketing expenditures include sales tools, such as presentation books, and sales incentives, such as referral fees.

Yellow Pages Still No. 1, But Are They Efficient?

While Yellow Pages/newspaper display ads consume nearly half of most companies’ marketing budgets, they also generate the most leads. Of the close to two-thirds of dealers who track leads, 59 percent say Yellow Pages/display ads bring in the most business. However, this category’s return on investment (a ratio of 1.43 to 1, or $1.43 earned for every $1 spent) pales in comparison to some of the other marketing mediums.

Quality Service Reaps Coveted Referrals

One aspect of marketing that remains constant over time is the power of positive word-of-mouth. Customer referrals continue to reign supreme when it comes to generating new prospect lists. In fact, dealers say they acquire 64 percent of their lists through such channels.

The best part about customer referrals is that they are often free. All a business has to do is earn them. However, that entails working hard and delivering a high level of service and customer satisfaction.

Arsenal of Sales Tools Helps Influence Clients

Once a dealer has targeted a potential customer, 55 percent deploy a structured sales presentation. These presentations may include one or more of the following: presentation books, product demonstrators, manufacturer sales literature, company sales literature, yard signs/decals, industry statistics, crime statistics, sales contracts, product samples and videotapes.

Incentives Incite Signing on the Dotted Line

Most companies don’t subscribe to the theory that the thrill is all in the chase. In business, it’s the conquest that ultimately matters and drives the all-important bottom line. Marketing programs are only as good as the sales they lead to as measured against their cost.

Regardless of their varied marketing strategies, dealers average closing 69 percent of the new sales presentations they make to potential customers. Not bad, but 22 percent of dealers say half or greater of their efforts fail to elicit a sale. Some report as little as a 5-percent success rate. Clearly, there is room for improvement.

Be Thorough, Creative in Your Marketing Plan

When incorporating the findings of the 1999 Sales and Marketing Survey into your business plan, be sure to keep the following factors in mind.

Use clear, succinct messages in your marketing materials.

Use a consistent theme across all of your marketing.

Use repetition. Sporadic ad campaigns seldom work.

Use regional advertising to breed customer familiarity.

Think your plan through, down to the smallest details.

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