The New Norm in Today’s Market Upselling
In the realm of electronic security, upselling value-added services has become a critical component of success in today’s market. Interactive services and software as a service (SaaS) has created a new paradigm that allows installing security contractors, as well as telephone and cable companies, a veritable buffet of new offerings to their customers.
I recently heard a statistic that approximately 30% of all new security system sales include some sort of interactive component. This statistic will likely increase to at least 50% by this time next year.
In 2008 and 2009, low customer demand due to a struggling economy changed the way the security industry viewed sales & marketing and revenue opportunities. Up to that point, revenue generation came primarily through new customer creation. Since that time the industry has started focusing more on increasing revenue through selling additional services, especially to existing customers. This is a logical step because so many new services have come to the market.
Many alarm dealers are approaching the customer with an array of services designed to enhance their lifestyles and to save them money on energy expenses.
Security and fire alarm systems have for years been viewed by consumers in the same vein as insurance: You know you need it, but you don’t really want it. Because of this attitude many alarm systems have been purchased with a sense of reluctance, rather than enthusiasm. But the notion of the grudge purchase is beginning to change. Increasingly, consumers view the security system as an important piece to an interactive services package that enhances their personal safety as well as their lifestyle.
The high value targets these days are affordable interactive cameras and Web-based automation to control lighting, energy, appliances and thermostats. You can now include identify theft protection as a viable value-add service in our industry as well.
SaaS is currently gaining traction in the security industry, especially in the access control and video markets. It is no secret that software-based services are going to the cloud, which is simply a huge array of offsite servers that run Internet-based applications. With the cloud, consumers don’t need to own and maintain servers or expensive software. They can control certain software-based services from any Internet-enabled device, which is usually their smartphone or tablet.
Hosted access control fits into this mold. It basically allows end users to control their access control systems with cloud-based applications that can also be operated on mobile devices. Because there is no need to have an expensive server installed at the customer’s premise, the cost of installation is reduced. The icing on the cake for alarm dealers and integrators is this service generates a recurring monthly fee.
The same can be said of video. There are several new video services coming to market that employ IP cameras or a “gateway” onsite, rather than an expensive DVR. The IP cameras provide a conduit to stream the video to offsite servers that archive the video for prescribed increments of time. The initial start-up cost is less expensive and the customer pays a monthly hosting fee and any video alarm verification fee if it applies.
I encourage all dealers and integrators to jump on the bandwagon and start reaping the benefits of upselling interactive and hosted services. Third-party central stations are quickly becoming the clearinghouses for these new offerings. Installing contractors that use a third-party central station should schedule time with their monitoring provider to review its entire portfolio of services.
Every sales call, installation, service call and billing invoice provides an opportunity to upsell more services. The cold reality is for those security providers that don’t start offering these services to their customers, rest assured someone else will.
Mark Matlock is Senior Vice President at United Central Control Inc. (UCC), a wholesale monitoring station based in San Antonio.
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