Exclusive: Security Integrator Execs Explain How to Execute Biz Plans
Executives from four electronic security companies detail how their balanced menus of offerings can serve as a recipe for success.
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Record growth, managed services and … surveillance drones? Oh, my! Those were among the many fascinating topics bandied about during a recent gathering of four leading installing security contracting executives on the occasion ofSSI‘s annual integrator roundtable.
A lynchpin of the 2015 Industry Forecast Issue, this year’s session features company Presidents Steve Crespo (Security 101, West Palm Beach, Fla.) and David Meurer (Armed Response Team, Albuquerque, N.M.), Co-owner Danny Tolleson (Guardian Systems, Smyrna, Tenn.) and Vice President of Electronic Security Brian Duffy (Per Mar Security, Davenport, Iowa). Convening for the better part of an afternoon within the confines of a lavish board room during Honeywell’s Connect 2014 event in Orlando, Fla., these well-seasoned pros compare notes, contrast conquests and commiserate about common challenges.
These laser-focused yet congenial participants embody the breadth of security integrators, serving up a panoply of perspectives reflective of their wide-ranging sizes, market strategies and geographies. As such, you will no doubt encounter observations and ideas that ring true for your own business.
What kind of year has 2014 been for your companies and how does it com-pare to the past couple of years?
STEVE CRESPO: Overall, our business is definitely up. We should wrap up around 27% growth over last year. As far as the compounded annual growth rate, it’s slightly lower than the past few years. As a compounded annual growth rate over the past five years, we’re still at 34% overall. It’s a strong year. We expect to continue seeing it happen. It’s a combination of new franchises coming in, we’ve got existing franchises that are growing and we have a national accounts group that is also growing.
DANNY TOLLESON: We’re seeing about a 40% growth over last year, which is phenomenal for us. We’re typically in that 10%-15% range of growth each year. It’s been an amazing year. We’re in the middle Tennessee market, which is just thriving in Nashville. Nashville is growing exponentially and we’re going to hit our highest number ever in sales this year. We’re doing it with fewer salespeople than we’ve ever had, which in turn means fewer headaches.
DAVID MEURER: We are in an area that’s very government dependent, a lot of government employment through national laboratories and military facilities. That sector of the economy is soft. The government cuts have really cut back the ability for us to grow. We’re fighting to get double-digit growth organically.
What we see as our best growth opportunity going forward is acquisitions of smaller people. That is the next frontier. What is there, 12,000-13,000 intrusion dealers across the country? Most of them have a few hundred accounts. If they don’t find a safe port in the storm, they’re going to get ignored as this market and technology changes. They’re going to watch what they’re doing evaporate. We’re already seeing it. Local guys in our marketplace are declining. Their businesses are actually at a loss, losing accounts, dropping in revenue. It’s largely because they don’t have the ability to embrace the technology changes occurring.
What specific products, systems, and service offerings are working well for you right now?
TOLLESON: The access control market is growing exponentially with us. Our numbers in access control are about 52% over where they were last year. That’s our biggest increase, in the access control market and integrating systems. Everything we do is about integration. We want to be able to bring that video in with access control. By integrating that in and asking for the business on the video, you get two phone calls. When you add security on top of it you get another phone call for that.
We see the growth being in the simplifying of systems today. We recently did a job integrating access control with [Honeywell] Pro-Watch, where their databases talk to each other, and it’s saving the client thousands of hours of time in data entry because we’re able to make the database. When it goes into one database, it goes into the other database. It talks back and forth and talks equally. We really see a different move with integration within our company right now.
On that access piece, is there some recurring revenue attached to that?
TOLLESON: Most of our recurring revenue is in the service management agreements with access control. We’re very strong with that part of it. We’re not doing the managed access just yet, but that is in our roadmap for next year. We want to be able to offer that as a feature.
Everything we do, we have a goal of get-ting some kind of recurring revenue with it. I have an estimator that flags every system that doesn’t have recurring attached to it. They send me an E-mail and tell me. The salesperson has to give me an explanation why we don’t have recurring attached to it. It’s really about increasing that expectation level we have with everybody. Before, we just went out and sold. We didn’t expect to attach recurring to everything. Now our people understand it’s a requirement. We have to do it. It has to be part of it.
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