State of Commercial Security 2021: Handling, Healing & Hopefulness Post-COVID
It is not if but to what degree a commercial security dealer’s business has been forever changed by the lingering pandemic. Four battle-tested company leaders talk hardships, lessons and security spoils coming out of this war.
The old saying what doesn’t kill you makes you stronger was never more on the nose than this grueling past year — in both an individual sense and from a business standpoint.
While security dealer and integrator companies have by and large had a better lot than a great deal of other businesses and industries amid the COVID-19 pandemic, few to none have gone entirely unscathed. And everyone has had to navigate completely uncharted territory.
“We have never seen anything like this. Even with the recession in 2008 there were markets that were unaffected, but this is just hitting every imaginable area of business and people,” says Custom Alarm CEO Melissa Brinkman. “Factor in the health element and how you’re supposed to do work now and it’s so multifaceted. It’s nothing that we’ve ever experienced before … it’s just a <expletive> storm.”
In these times of intense pressures and strife on owners, managers and employees of installing security systems firms the need to come together as a community has never been more critical. Sharing and supporting each other for psychological stability and practical strategizing is paramount.
Here to help that process is SSI’s annual Commercial Dealer Roundtable, where executives from Honeywell Integrated Security Dealer companies discuss handling, healing and hopefulness relative to the pandemic.
▶ Tyler Blake is COO of Sioux Falls, S.D.-headquartered Midwest Alarm/BCI Integrated Solutions, founded in 1967. With 180 employees serving eight locations and 15,000 customers nationwide, MWA/BCI is a turnkey systems integrator that operates its own UL-Listed central station.
▶ Melissa Brinkman is CEO of Rochester, Minn.-based Custom Alarm, which she joined in 1998 and worked her way up to her current post in 2014. Offering both commercial and residential systems, Custom was named SSI’s 2020 Installer of the Year (Small to Midsize Company).
▶ Dave Chritton is owner and CFO of San Francisco’s Microbiz Security Co., family operated since 1965. With more than 40 years’ security industry experience, he has been an ASIS member since 1984 and a Certified Protection Professional for 10+ years.
▶ John Copeland is an ex-U.S. Coast Guard operations specialist now a partner at ESI Fire & Security Protection in Channelview, Texas. Founded 20+ years ago, the firm not only offers security and fire detection & suppression systems, but also mobile security trailers.
What have you seen in terms of customers’ challenges and needs relative to the pandemic, and how has that affected how you interact and communicate with them?
Tyler Blake: The biggest challenge customers faced is not knowing what to do in terms of reopening. They didn’t get a lot of guidance and it differs so much from state to state. To get into some of these larger customers, enterprise customers that have sites across the entire nation, it runs the gamut because what California does is very different than what Florida does and what Florida does is very different than say what Minnesota or South Dakota and Nebraska does.
They’ve really been looking to integrators as just providing a voice saying, “This is a technology you should use for opening up. Let’s maybe leverage your access control or add new access control and restrict your entrances, and let’s talk about technologies like temperature screening.” This is where you can really value add as an integrator and tell them what to do because they don’t know. Everyone’s flying through this storm blind and it’s about giving people direction and making them feel good with the warm-fuzzy.
Many vendors have come forward with those types of solutions, the contact tracing, distancing and thermal monitoring. Have you found that’s creating a lot of noise or confusion?
No, I think most of the technology is helpful. However, some manufacturers were looking at analytics for contact tracing and I just don’t think it’s realistic for organizations to start doing their own internal contact tracing with a camera. They may create policies and maybe track who is in the facility on what day, what officer and who they interacted with in case they do have a positive case.
From our experience, almost universally our customers have embraced or at least wanted to learn more about temperature screening, contact lists, access control because it really is solving a big problem that they have in their organizations.
John Copeland: We do a lot of work for industrial chemical facilities. One of our customers is a construction company and last year they were a billion-dollar business. They were almost in every chemical plant in our area, all the top players. When all this first started everything was good. All of a sudden, April/May rolls around and they pretty much shut down all projects indefinitely and don’t have anything on the books until 2022.
They went from having 20 projects going on to only one project in the company. That’s a large plant and supposedly it’s the biggest project north of the Rio Grande, which we’re lucky enough to be involved in. That helped us out but many places haven’t returned to their offices since March. That campus we work on has been vacant. It’s crazy but we’ll see what happens.
Melissa Brinkman: We’ve obviously seen a slowdown to stoppage with restaurants and retail, but we have seen increases in a couple of markets, in particular manufacturing and senior living facilities. We’re seeing that with regard to access control and video surveillance. Also there’s some opportunities in daycare and churches. We’re seeing commercial being heavy but residential was slow to start with [during the pandemic], and it’s a smaller part of our overall revenue but we do a lot of activity there. We saw a slowdown until probably July and now we’re seeing an uptick with a lot of inter-active services.
Did you have any requests or proactively do any fee deferments to help with customer hardships?
At the beginning, we did put deferments into place for those concerned about financial obligations. This was before all the federal relief and stuff happened, but we would stop billing for three months. If somebody in particular, like restaurants, was having some difficult times we wouldn’t push on collections. We’ve continued to handle them on a case by case basis but our team has the tools to help our customers, especially those experiencing more financial hardship.
Do you anticipate higher attrition?
We see a fair amount of attrition on the residential side, just because of the market we’re in. It’s very transient with a medical facility here that has a lot of residents who are in and out. We’re trying to recapture it. I have seen on the commercial side that it’s up a little higher than I’d like to see. I don’t know what to anticipate, nobody does. Just try and adapt and figure out how to navigate around this next corner.
Dave Chritton: We’ve seen some projects that never started, but projects that did get started seemed like they’ve continued. Large construction projects continue to work their way through. We have had interest in the infrared cameras and the temperature cameras, but it seems like they’re not willing to commit at this point. A lot of these systems are expensive; they’re like $20,000 to set it up. It seems customers are not willing to commit yet because they’re waiting to see if the pandemic is going to go away or for how long it’s going to continue.
As mentioned, a lot of the restaurants, nightclubs, places like that are shuttered. San Francisco is a large metropolitan area and there’s not a lot of places for outside seating. Anything inside in California has been shut down and I don’t know how the city’s going to pay the bill. We’ve had to adjust our billings for restaurants and going forward give them a lower cost, less complete protection if you will, but a lower cost that they can afford and we’ve had them prepay. I went to one of them and said, “Look, you’re not going to be open for the next six months.” So they prepaid through June 2021.
Continuing with the opportunities aspect, and considering 25% of workers may never return to their previous working environments, what is something you’ll be able to sink your teeth into moving forward?
Chritton: I think technology will drive some new opportunities, like contactless access entry. There’s some weird protections in San Francisco against biometrics and visual aids, but I think getting into a building or office with card access, there’ll be a lot of devices that will help you get in without having to touch doors or having to touch card readers. They’re going to do the biometrics, maybe hand or facial scanners to give you access. I think that will accelerate. There’s always opportunity but we as integrators have to change, being aware of what’s out there, adapting and jumping into these new markets as they emerge.
Brinkman: Something we had seen being slow to adopt in our area was Cloud services and the SaaS [security as a service] model, but that is changing as we see more and more businesses working remotely. They’re wanting to manage their business without physically having to be onsite. We’re seeing a lot more traction on that. People are understanding the value and it’s an easier conversation now to have because of the circumstances we’re all living through.
Blake: I agree that security as a service is going to get pushed forward a lot more. A lot of organizations are realizing, “Hey, taking a bunch of money and putting it on a capex to invest in a security system maybe doesn’t make sense, but maybe let’s do it as a service for our access control or cameras because we don’t know in five years if we’re going to have 500 people in the office or 50, but right now we need it. Let’s find a different way to pay for it that makes a little bit more sense.”
I think some of the national companies are going to struggle a little bit, the JCIs and the ADTs, because they have such a high overhead built into their organizations. I think you’re going to find some regional players are going to do really, really well picking off some of the larger enterprise and national accounts, because they’re going to be able to provide the same, maybe even better service at a lower cost to some of these organizations. The thing most organizations are concerned about going into 2021 is, “How do we conserve our cash? How do we control our budgets?” Most of them have had some hit during 2020 and don’t want to be out too far on a limb.
Copeland: It’s been super crazy because we’ve had so many different products pop up all of a sudden. Our customers are asking us, “Hey, how do we do this? How do we bring our employees back to the office safely?” For us, there’s so much different technology you’re looking at, how do you pick the right one? How do you know which ones actually work? We’ve been fighting that battle and trying to help our customers adapt new standard operating procedures with visitor management systems.
As was touched on, the pandemic has accelerated certain technologies like managed services. Where does SaaS stand today with your businesses?
Blake: Our Cloud services such as hosted access, hosted video is growing. But we haven’t found that a lot of customers are looking for actual management services to the extent of having us add cards to their access control or directly watching their cameras. I think where a lot of the big growth drivers in Cloud video and access control tend to be things like multidwelling units in an apartment complex because those industries are consolidating. They don’t necessarily have the IT staff on hand and they want an easy way to manage, say 150 properties. It’s definitely a growing part of our business.
Have you noticed a spike in vandalism or crime related to vacant properties?
Copeland: Yes, we just had one this morning. We do a lot of tractor companies, so it used to be all the old video crap if you will out there. Now we’ve gone to the Netwatch Proactive Video Monitoring service [from NMC] on all their sites and we’ve seen literally a 100% change of us being able to get them off the property before they actually take anything.
Keep reading to see lessons learned in 2020 and what these dealers expect in 2021…
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