Monitoring Pros Analyze Latest Tech, DIY, RMR
When it comes to generating security-related recurring revenues there’s no more holistic viewpoint than that of wholesale central stations. Leading providers discuss hot opportunities and why dealers should partner with them.
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Recurring revenue has long been the heartbeat of the alarm business. As alarms have broadened into security and more recently automation, management and other services, that throb is becoming as thunderous as a Viking warship drummer.
And like oarsmen trying to keep up at a swift pace, dealers/integrators are increasingly in need of a hearty monitoring services partner to help them pump up their RMR profits.
Today’s leading third-party, wholesale monitoring central stations are among the most sophisticated facilities in all the security industry.
They offer their dealer customers access to the most advanced technologies and guidance on a number of levels for succeeding with related services, as well as reliability, redundancy, business assistance, sales and marketing tools, and broad support across it all.
But it’s an ever more complex and competitive world out there, and there are myriad considerations to be weighed and choices to make.
To gain a better educated perspective and zero in on the security monitoring landscape, SSI interviewed representatives from eight central station businesses.
In the following roundtable, the experts talk transmission, technologies, value-adds, DIY/MIY and, naturally, RMR.
There is also a directory to learn more about each company. It’s enough to get your heart racing with the possibilities.
How have changing signal transmission methods impacted your company as well as your dealers’ businesses?
David Smith, V.P. Marketing & Business Development, COPS Monitoring: Many years ago, both dealers and central stations struggled with the change from seven- to 10-digit dialing.
Then we faced some challenges with customers changing from POTS to VoIP or with telecommunications companies inserting VoIP somewhere in the communication path.
Most recently, and still ongoing, is the sunset of 2G. If the new technology will communicate to our existing receivers, the impact to the central station is minimal.
The impact is obviously greater if we’re required to purchase and install new receivers. In either case, alarm dealers always bear the heaviest burden because they have to change the equipment.
Our dealers tell us that customers aren’t always willing to spend money on the upgrade while their system is still working, so scheduling becomes an issue.
Some customers are not willing to spend money at all, which means that a dealer runs the risk of losing their customer unless they’re willing to absorb the cost of new equipment.
On the upside, changing communication technology creates a reason to talk to their customers about other improvements to their systems that involve convenience, control, and security.
These new services not only represent new sources of revenue, they can help a dealer’s bottom line by improving customer satisfaction and reducing attrition.
Grant Graham, Director of Monitoring Operations, MONI Smart Security: The shift from POTS to cell has offered few downsides from the monitoring perspective. The reliance upon cell retransmission vendors has increased, while the reliance upon public telephone switches has decreased; the relationships have simply shifted.
The cost of public telephone transmission has naturally decreased, while it has increased on the cellular side. The technology on the receiver side has improved with the shift to cellular and IP.
Things like the 2G sunset was an obvious negative that everybody had to pay attention to, but an understandable and necessary issue that comes with technology advancement.
The ability to troubleshoot and communicate with active panels in the field has greatly improved along with the shift to the cellular services.
From a sales perspective, it is much easier now to sell and install a system since we do not have to access the customer’s telephone provider and add telephone equipment.
With that said, cell coverage is a constant consideration in the sales process. Cellular and IP allow us to monitor devices without the need of a public telephone switch, thus creating an increase in opportunities.
In theory, if there is a cell signal then there is a monitoring opportunity.
Morgan Hertel, V.P. of Technology & Innovation, Rapid Response Monitoring: The change in signal transmission methods has required dealers to evaluate their offerings and implement new technologies that focus on IP, cellular and private radio communication platforms.
Differentiation has been a key focus as they review the various options that are now available. Mainstream adoption of IP/cellular has allowed Rapid Response to develop new services giving dealers even more ways to increase their RMR.
The other impact on this transition away from dial-up is that it has required RRMS to dramatically increase not only types of receivers and platforms but also the support and infrastructure for all the new platforms.
Is a security dealer better off contracting with a third-party monitoring provider than keeping it in-house?
Kevin McCarthy, National Sales Manager, EMERgency24: EMERgency24 alarm contractors resell our services seamlessly under their own brand or in tandem with our national name — whichever they prefer.
It is nearly impossible for regional-sized companies to maintain the technology and infrastructure to be able to
compete with companies that outsource their monitoring to us.
Not only do companies benefit from our resources and economies of scale, we customize our services to the dealers’ demands.
There is no upside for alarm contractors to maintain a 24/7 central station these days — it’s too costly. Dealers should do what they do best: sell, design and install alarm systems.
Mark Matlock, V.P. of Sales & Marketing, UCC: Very few alarm companies have the economies of scale to justify self-monitoring. At almost any account level, contract central stations can monitor for less.
Contract central stations generally have access to more technologies and services, including multiple manufacturers’ technologies and advanced industry certifications.
Contract central station redundancies are generally far beyond the typical central station of an installing alarm company.
Most importantly, the main objective of just about any alarm company is to grow its recurring monthly revenue.
Owning and operating a 24/7/365 monitoring station and dealing with all of its operational challenges detracts from this goal.
Justin Bailey, President & COO, AvantGard Monitoring: The most important reason is cost; both in dollars and management time.
The cost of redundancy, high availability, and remaining UL Listed is tough to do when your other responsibilities also include acquiring and servicing a large enough customer base to fund an in-house monitoring center.
Almost anybody can outsource their monitoring center and save money out of the gate. We have a dealer who recently dissolved their central station, anticipating to save about $300,000 per year.When all was said and done, we ended up saving them about $350,000 per year in hard costs. One thing that may be overlooked in calculating the cost of having an in-house central station is the amount of time that the executive team has to give in order to keep the central station running smoothly.
Most organizations are spending about one-third of their time worrying about, thinking about and stressing about their central station when they could be using that time instead to effectively grow their customer base.
In what specific ways do you help contracted security dealers increase RMR?
Hertel: Rapid Response is continuously investing in the latest technologies for monitoring. We work closely with industry vendors to test and integrate new systems/devices giving our dealers the full support to offer any services available on the market today.
Our in-house software development team has released over 10 connectivity apps, portals and software for dealer and customer access.
These are designed using dealer input and regularly updated to include new enhancements. These are included to our dealers as a value-add, but many use them as an additional source of RMR.
Additionally, our connectivity services make customers even stickier with push notifications, bidirectional SMS messaging, real-time email notifications, natural language speak recognition IVR and more.
Along with our robust offering of tools and applications, RRMS sales staff are constantly educating dealers about new offerings and services that are either in production or on the way.
This forward-thinking model allows the dealers to be a business partner and not just a consumer of services.
Bailey: We spend a lot of time identifying accounts that are problematic from a monitoring perspective to help them be
proactive in reaching out to the customer and resolving situations before they get out of hand.
We do this for all types of customers, from the ones who do not use their systems at all to the customers who can’t seem to disarm their system.
We also have unique takeover identification technology that helps them identify accounts, in real-time, that are likely being compromised.
Ultimately, our investment is in providing the best service and the best technology possible so subscribers are securely monitored every second of every day.
We work hard to help dealers retain more accounts, reduce attrition and consequently add their bottom line.
Daniel Oppenheim, V.P., Affiliated Monitoring: Affiliated has a full hosted and managed access control package for dealers to drive additional meaningful RMR from their customers.
We allow dealers to offer access at a lower install price point while offering a complete managed access offering that is unique.
Affiliated fulfills all card adds/deletes and data changes on behalf of the dealer. Other offerings include video services that Affiliated can integrate into any security installation, and Affiliated supports a broad array of DVRs.
Then there is the PERS business. In the near future, the senior population will nearly double to over 70 million people with 96% of those wanting to remain in their own homes.
Affiliated’s low-priced PERS equipment and monitoring package allows dealers to tap into the fantastic earning potential of the growing senior market.
McCarthy: In addition to our active shooter software-as-a-service, EMERgency24 alarm contractors increase their recurring monthly revenue by marketing the various uses of video systems to different audiences based on their need.
Video for event verification is a common use now because some emergency response agencies require confirmation that a crime is happening before dispatching police, but dealers can also market video as a labor-saving system.
Video guard and video tours are custom applications they can offer to maintain security in a specific area or throughout a property.
For video guard service, the subscriber specifies a window of time during which a central station operator monitors a recurring event via a system-connected video camera.
Often, this is used to ensure the validity of a transaction, such as delivery of materials or depositing of funds into a safe each night.
This real-time observation helps ensure the integrity of such events. Also, by outsourcing the supervision of recurring transactions to a third-party company, the possibilities of collusion are virtually eliminated.
A video guard tour is another customizable service that could eliminate or significantly lessen the cost of hiring a team of guards.
For both homes and businesses of all sizes, central station monitors are able to “tour” a property by accessing a specified list of cameras and scanning for exceptional conditions, events or unauthorized entry.
This type of visual tour of the property can take place multiple times each day, depending upon the dealer’s instructions. We also offer a digital doorman service where we act as the end user’s doorman.
Depending on the level of security needed at the facility, digital doorman service can be arranged to keep an image record of every person entering a premises for later review, if needed, or a central station operator can be empowered to grant or deny access to certain zones, as spelled out in dealer-defined protocols.
The image-logging service is a simple and cost-effective way for a customer to see who was in the premises at a certain time/date should there be an incident that inquires investigation.
The more intensive access control service requires central station operators to confirm identification information — often a passcode — before allowing a person access to certain zones.
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