Security Execs Reveal Secrets for Dealing With Disruption
Four savvy security execs explain how they are ensuring fast-moving technology, customer preferences and market competition does not bankrupt their companies.
This year’s dealer roundtable included (l-r) J.C. Gonzalez of HomePro, Vyanet Operating Group’s Brian Gartland, Midwest Alarm’s Tyler Blake and Alexandra Curtiss of Alarm New England.
How are you dealing now with DIY? Do you feel compelled to address it as a company?
GONZALEZ: We’ve gone down the path of putting a business plan together, but haven’t fully executed on it. I don’t think we have the right mix yet, but I know it’s certainly a viable, realistic option. It’s something we’ll continue to look at.
GARTLAND: For us it’s something that’s brought up from time to time. We’ve had people cancel with us, tell us they’re going with a DIY, only to come back a couple of weeks later. I think experience with the process of a faceless approach scares them. With us we’re in front of them. We haven’t come up with a great DIY model that we feel we could roll out and be comfortable with it in our approach, and being able to support it. We haven’t pulled the trigger in any way.
CURTISS: When I came back to the business, it was to build a DIY model exclusively. I was going to sell it over the telephone. Now two years later, 65% of my sales are DIY and 35% go through our pro channel. As a legacy organization we maintain 40 technicians on the road. When I first came out and said we’re only DIY last year it was actually a 35/65 split of DIY to pro. We’ve gotten a lot better at DIY so it sort of flipped.
Initially, one in two or one in three prospective DIY customers were saying, “I want you to design it. I love everything I’m hearing, but I’m not putting it in myself.” I said, “Great, I’ve got 40 guys who can do that for you.” Far be it from me to say no to RMR. What we’ve done is tried to take the best components of DIY and of a family-owned customer service-centric 45-year-old integrated security company and blend the two worlds together.
Our approach to DIY is very different than SimpliSafe, where you have an ecommerce solution and it arrives in a box and good luck. Ours is that very consultative sales process, married with a ton of information flow from the salesperson through the provisioners, and very heavy customer service. DIY is my whole world.
The economics are phenomenal. You can subsidize. We do the monitoring and sell 36-month contracts for $35-$50 a month in RMR. It’s very low cost, and if you do the on-boarding process right, if you really hold their hand for the install, and you train them via Facetime and web conferencing, I don’t have techs that have attitude problems. I don’t have go-backs. I don’t have any of that stuff in my DIY channel.
BLAKE: We’ve played with DIY the past year. We’ve had a lot of success leveraging our existing commercial base. We presented our commercial customers an offer to all their employees for DIY systems at a discount. That’s a perk of them being a commercial customer of ours, and we’ve had a lot of success with it. We are leveraging that existing relationship without the layout in marketing to go and acquire accounts.
Going forward it’s not our primary go-to market because we’re more worried about the customer relationship and retaining someone for 25, 30, 40 years. If you own the relationship, whatever technology is in five years they’ll be buying it from us.
Do you have a particular area of emphasis or focus for the New Year?
GONZALEZ: We’re looking to expand by getting in with additional builders through our electrical play. We’re looking to expand the number of rooftops we touch as well as geographic footprint, possibly going into other markets within Texas. We are heavily focused in the builder market, and thankfully we’re in a state where they continue to grow.
BLAKE: Integration, integration, and more integration. It’s really that integration 2.0 and tying in different pieces that we haven’t thought about, the customer hasn’t thought about. We need to make their business and security system more manageable. Whether that is in compliance, safety or building management, it’s tying all that stuff in.
Integration 2.0 is about managing vendor databases. Certainly if you’re an airport, that’s the biggest issue there that you have with enterprise systems. It could be visitor management, HR integration. It’s really getting to one database, one card that manages everything. There’s a large ROI case to make for the businesses.
CURTISS: There are three things. One is scale, so looking on my sales side to grow that unit. I need to start stepping out of spending so much time selling and devote more time to strategic planning. I want to build a builder model with a DIY twist, and do more traditional business development stuff outside of our digital marketing funnel. Second, in marketing we’re looking to continue our success but reduce our cost of customer acquisition.
We convert about 12% of the leads that come through our website, so what’s happening to the other 88%? How do we think about our pricing, packaging, and go-to-market and nurturing process within there to start moving that ticker up? We’re making huge investments there that will obviously change our business. The other piece is that we’re spending a lot of money to get new people in the boat.
The boat is leaking out the bottom, so we’ve got to look at attrition. I think we’re at this really pivotal time in our industry where people are coming off a legacy hardwire system. They want the new technology. I think they’re going to do that once and then they’ll be OK for a while. But we have to make sure we keep our customers we have through those transitions.
Keeping our customers, and again world-class customer service, so continuing to build out those programs so they’re an integral part of who we are and how we operate as a modern company.
GARTLAND: For us it’s RMR growth. It’s a combination of small integration and for us recently a big focus has been video alarm verification. In some of our markets, we’re testing requiring systems to be sold with a camera for at least some point of verification. A lot of people aren’t happy with cameras in their living rooms.
Trying to break that part of the market is still somewhat of a challenge. We’re focusing on entry points, things like that. On the commercial side, customers appreciate the fact we can look in in the middle of the night. They want to know if somebody is in their location. We find that for the most part commercial is pretty sticky.
A tenant moves out, a tenant moves in. We continue with security. But being commercial requires a larger team, a more knowledgeable team, more design, salespeople who understand the process from going out and walking, quoting, bidding. The residential side is low-hanging fruit, in the sense of comparison. It’s an easier market for us for the structure of our company.
In either case, we want to stick with customers that understand the value and not those that are just shopping for the lowest price. We want to show our customers the value for what they’re getting, what they’re paying for, the service they’re going to get. We’ll be higher priced, but they will understand the value and be happy knowing they’re getting better, more robust services, and being better taken care of.
If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!
About the Author
Scott Goldfine
Scott Goldfine is the marketing director for Elite Interactive Solutions. He is the former editor-in-chief and associate publisher of Security Sales & Integration. He can be reached at [email protected].
Related Content
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Commercial Integrator + Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add to your bottom line.
A FREE subscription to the top resource for security and integration industry will prove to be invaluable.
