How to Grow Fire Alarm Service Revenues

Installing security and fire systems contractors too often leave the profits from selling service agreements for other competitors to procure from their clientele. Learn how marketing a service sales strategy can generate consistent recurring revenue from existing customers, as well create new ones

There has never been a better time to focus on growing fire alarm service revenue. Customer satisfaction levels continue to be low. Manufacturers and independent fire alarm service providers are still recovering from cost restructuring due to the economic downturn. Many installers reduced field manpower and redirected service technicians to expedite install work to generate much needed revenue.

In far too many cases existing service customers didn’t receive what they contracted for and response times reached unacceptable levels. One indication that bears this out is the service sales representative’s ability to schedule an appointment when contacting a potential fire alarm service prospect for the first time. Oftentimes, their success rate is much higher than those performing the same task prospecting for security or sprinkler system service.

Few building operators in today’s business climate want to waste time meeting with a salesperson. This has not been the case in the fire alarm service market segment as appointment rates are the best they’ve ever been. This indicator demonstrates the opportunity for those integrators that focus on this profitable business segment. Let’s take a close-up look into what considerations need to be addressed in order to effectively play in this niche.

Multiple Parts of a Service Sales Strategy

Fire alarm service represents a unique opportunity for many reasons. In reality fire alarm systems are problematic. They will have glitches. It’s not a matter of if, it’s just how often. Fire alarm systems have broad applications in wide-ranging building types. For instance, consider the large numbers of smoke detectors in a facility; one bad apple can generate an alarm. Power surges, vandalism and many other types of complications can adversely affect an alarm system at any given moment. False alarms disrupt tenants, customers and processes. These problems contribute to why fire alarm system service agreements are larger and more profitable than any other system in a building besides HVAC.

The revenue opportunity, based on the square footage of a commercial building, generates fire alarm system service agreements that are larger by multiples over security and sprinkler systems. That means lower sales costs, less administrative support, and better receivables. All of which contribute to overall business margins.

Integrators know service is their most profitable business. The majority understand service agreements are the best method to capture this renewable, high margin revenue and build the value of their company. Many do a great job and see their revenue grow. Most integrators measure their success by comparing results to previous years.

Clearly this is a worthy gauge of success, but it is limiting as some firms are content with incremental growth in a market that offers far more. In many cases it requires re-evaluating their business model. Are they a products and systems-centric firm, or one that seeks to build their business around a service-centric model? Many seek a good balance between the two. For those that have adapted to be more service revenue focused, the results have been dramatic. For those that haven’t, the opportunity is there for the taking.

All it requires is the right service sales strategy, sales aids, training and a well-defined implementation plan. Most importantly it takes a commitment to do it today, not next month or next year. Many integrators feel they are just too busy to focus on a fire alarm service sales program. Unfortunately it may be too late to take action when installation projects slow down. There are two perceptions that are common with security integration firms. Each is legitimate, but in most cases are not supported due to a lack of understanding or longstanding beliefs that are outdated. Following are both perceptions in question along with some deeper explanation:

We already sell fire alarm service contracts. This is almost always the case. Integrators do sell contracts, but what they don’t do is market service agreements to new clients. Rather than entering new markets and adding new clients in segments of their choice, they respond to opportunities that present themselves. Typically these are installations they’re involved in or prospects they have relationships with. This is a tried and true formula for incremental growth, not growing service market share.

Fire alarm systems are proprietary. I can’t get parts and can’t program many systems. Parts availability is not the issue it was in years past. There are multiple sources that will deliver parts to your door the next day. When it comes to programming, many integrators will subcontract or arrange to have it done with their clients who are more than happy to cooperate. That’s why they changed vendors. They want a service partner. They’ve had enough of being locked in to an underperforming, overpriced supplier. Firms also overestimate how often programming is actually required.

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