Are You on Your Way to Reaching Your 2008 Sales Quota?

Are You on Your Way to Reaching Your 2008 Sales Quota?  Manufacturers, dealers and integrators probably locked down their 2008 budgets two or three months ago, and now we’re approaching the end of the first quarter.

This will reveal just how good each company’s market analyses was when they finalized their numbers late last year, and it will show what the early chances are of reaching the full 2008 sales quota.

To complicate things, a company can reach its total year sales budget but still be off in reaching its net income target. Setting total sales numbers for a year is one thing, but setting the sales budgets for each product group is another.

As product and service lines get older, they tend to become commoditized as features; functions are copied by competitors and become commonplace. This reduces prices, resulting in reduced profitability. To offset this, manufacturers concentrate on high gross margin, new product introductions each year. The higher the level of success with a new product, the faster the innovation-to-commodity transition takes place.

This emphasis on innovation often produces cross-category cannibalization effects as well as competition within a category. 

Tracking Security Sales Trends

Intrusion systems dominated the industry a generation ago, followed by access control systems. Then video took over with the possibility of replacing some access functions. Now it’s IP, convergence, consolidation, channel change, partnering, and even guard replacement, which is still led by the driving force of the video trend. 

To get some insight into where demand actually lies for 2008, we asked a nationwide panel of security users what their buying priorities are this year. Some integrators feel that they have a lot of influence on what the user buys, and there’s also the question now of the influence that the IT executive has on the security executive’s buying plans (see “By the Numbers” in the February issue).

It’s no surprise that fire and intrusion equipment are at the bottom of the list. They’re both established and not significantly prone to innovation. But there are two surprises, one reflecting security users’ interest in IT security and the other suggesting that access control will be just as sought-after this year as video purchases.

IT security may relate to the rising use of IP since many users are concerned about the security of these systems. We’ll know more after the first quarter is over, and whether or not users decide to change their plans.

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