SIAC’s Stan Martin Calls Out Lack of Company Participation in Industry Associations
What does 2012 hold in store for your business and the industry? Find out with the many insights offered in SSI‘s annual Industry Forecast, which is featured in our January issue. This year, more than 25 of the industry’s most prominent research firms, trade associations, business and finance specialists, systems integrators, manufacturers, consultants, and alarm companies rendered a deep and sweeping portrait of the impending security landscape. The participants addressed the most significant changes, challenges and opportunities they anticipate taking place during the next 12 months in seven critical areas. They are: security technology; security markets; security industry; business and operations; politics and legislation; risks and threats; and ongoing challenges. With the boundaries of print being too constrained to present all of the fascinating and valuable assessments, each of the respondents’ complete, edited interviews are being offered exclusively online. Happy New Year!
Security Industry Alarm Coalition (SIAC)
Stan Martin: Technology continues to improve and the inevitable trickle down into the products our industry traditionally sells and installs will certainly benefit. Currently, the use of remote video monitoring is taking on a larger and larger role. As more and different products become available, and prices come down, there is every reason to believe more customers will opt for this enhancement to their systems. For several decades, complementary equipment and technology, such as audio and phone services, have been available for the industry to sell and install. Few in the industry have successfully changed their business model to include these “upsales” to existing customers. Now most national and large regional companies are delving into these ancillary products and it is expected that their success will spur the independent companies to act similarly.
Martin: The perception of false dispatches will continue to plague the industry, despite the fact that reductions have been significant at 70% or more, with patrol resources dropping to 1%-2% for agencies using our recommended best practices. As municipal budgets continue to shrink, more pressure will be applied on the industry to self-initiate proven reduction techniques such as enhanced call verification (ECV).
Martin: The issue of municipal monitoring remains just under the surface and will require a great deal of hard work, and dollars, to stop. While the current target is fire monitoring, there is nothing that would prevent that from morphing into all monitoring. If you add to this the growing list of products that allow self-monitoring via smartphones, you have a potential tipping point on the monitoring side of our industry. Giving the business plans that are all too prevalent in our industry, where installations frequently are subsidized by the first year or more of monitoring revenue, any dynamic shift in that revenue stream could be disastrous for many companies.
Politics and Legislation
Martin: Licensing and reciprocity of licenses will continue to be a nightmare for the industry. Current efforts to achieve some form of national monitoring license will continue, but the end is nowhere in sight. The looming battle to keep municipalities out of the monitoring business has the potential to be a legislative quagmire that will consume large amounts of dollars and will require a great deal of man hours to be spent in many geographic locations. Dealers and their respective state associations in cooperation with our national associations must be proactive in passing legislation that prohibits municipalities from entering the private sector business arena. Waiting until legislation is enacted and reacting defensively to this activity, as is occurring in Illinois, will be catastrophic to the industry and individual companies as it will affect what a company is worth to a buyer.
Risks and Threats
Martin: On the plus side of the ledger, the industry now has “Best Practices” that when fully adopted are capable of reducing unnecessary dispatches by up to 90%. On the bad side is the monumental task of getting industry wide acceptance and use of these best practices. Another possible danger is cities/counties, such as Detroit, suddenly deciding with little or no notice to citizens or the industry that response to alarm systems is a way to reduce officer workload. Though ill-conceived with little positive impact on resource allocation, it may be perceived as a benefit to a community when the reality is just the opposite.
Martin: There is nothing that indicates that the pitiful level of participation in state and national associations will improve. When you consider that only 10% of the companies belong to any association and only 10% of those who belong are active participants, it means that only 1% of the industry is making the decisions for all of the industry. The lack of 100% commitment by ALL dealers and ALL monitoring centers to embrace ECV or two-call verification is absolutely mind-boggling. This best practice has been proven to reduce alarm dispatches 30%-50% while reducing central station costs and actually improving customer satisfaction levels!
Martin: Looking in from outside the tent, the survival of the industry through very tough economic times is impressive. Certainly some companies have been sold but on the good side the industry seems healthy. We believe the trend toward consolidation is likely to continue – smaller companies joining forces, midsize forces figuring out ways to fit services together and larger companies merging or buying out rivals.
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