How Selling Value to End Customers Leads to Recurring Revenue

Selling on value, says Viakoo CEO Bud Broomhead, requires systems integrators to show the client how their business will be improved by what the integrator is offering.

Viakoo is a provider of real-time business analytics solutions that are said to deliver visibility and insight into physical security data, streaming events and business operations. The company’s CEO, Bud Broomhead, joins the conversation to lend integrators some insight into leveraging recurring revenue services, among other related marketplace topics.

Many integrators struggle with transitioning to a recurring revenue business model. What do they need to understand foremost about selling value to their clients?
To sell on value, end users want to understand the outcome, specifically how their business is improved by what the integrator is offering. For example, ensuring compliance by implementing a service program that will eliminate downtime, or reduce customer cost by replacing manual camera checks with automation, or enabling your customer to make better decisions about future purchases by having objective data on physical security system performance.

Today’s service and maintenance offerings have gaps in terms of capabilities necessary to accomplish this; therefore, we see a missed opportunity for value-added services on the part of integrators. Focus on how the end user’s business is made better is the way the integrator sells on value and becomes a partner more than a vendor.

What new demands are end users placing on your integrator partners? What are the ramifications for integrators?
Better system uptime and reliability are what we hear most frequently from our integrator partners – loud and clear. Security systems need to work all the time, not just part of the time. Uptime and reliability become hyper-important, especially with the increasing use of business-critical analytics. End users are also facing more compliance and audit requirements for physical security systems, greatly upping the cost of systems not always working as they should. As IT teams and physical security teams become more intertwined the IT standard of “Five 9s” – 99.999% uptime – is putting pressure on integrators to address uptime issues with automation.

What do you view as the top business and operations issues for your security integrator partners?
Cyber-hardening, specifically how to harden the overall system as well as all the individual devices from cybersecurity threats. It’s a complex problem and a lot of effort is going into it. You can see that in the program for the upcoming ISC West conference in early April. Viakoo and others will be on panels, presenting or demonstrating practical ways integrators can address cyber-hardening and other ways to address cybersecurity issues.

In terms of their own operations, integrators face the reality that all customers have multivendor systems since no one vendor makes, for example, a VMS and an operating system. The overall system is heterogeneous or made up of several vendors. Individual components might have their own self-test health check, but most problems come from the interaction of components not from within. Every customer is different, and so having solutions like Viakoo that has interoperability with most vendors is becoming increasingly important.

“To sell on value, end users want to understand the outcome, specifically how their business is improved by what the integrator is offering.”Viakoo CEO Bud Broomhead

How are successful integrators meeting intensified competitive pressure to be more efficient and reduce attrition?
Proactive services seem to be the weapon of choice; that’s where the competitive energy is right now between leading integrators. Proactive services make the integrator more efficient and the customer much happier. Related to that is customers wanting more objective metrics about their security system performance and transparency. Integrators need scientific proof to support their conclusions – often with IT – and replace time-consuming guesswork. Having operational metrics and scientific proof is becoming table stakes in successful bidding, and also retaining those customers over time.

Solving a significant problem for an end customer may be the quickest way to their heart. What is Viakoo’s No. 1 problem it solves for end customers?
Viakoo enables our integrators to be proactive, versus reactive, for their benefit and their customers’. We often hear from integrators that getting ahead of problems, finding problems before their customer does, is their biggest challenge. Many times, it can be days before the end user discovers the problem.

For example, video may have stopped recording for days before the end user finds out. We hear about end users who hire guards to check cameras manually. By modern technology standards that is just unacceptable. Preventing that downtime or extra human effort is a sure way to get to the end customer’s heart, and Viakoo helps integrators achieve that. Some integrators generate RMR by offering a higher level service, some as part of their standard service offering.

Can you identify a critical security industry issue you see as needing to be dealt with?
Yes. Don’t blame the integrator if you aren’t running automation that auto discovers, auto detects issues, auto diagnoses root cause, and then notifies the integrator wherever he may be 24/7. Many end users shortchange their requirements and budget, but then have completely unrealistic expectations that the integrator is going to be able to deliver uptime, reliability and performance. Twenty-first century systems can’t be effectively managed with 20th-century procedures and tools.



What are your views on this “race to the bottom” trend that is putting severe pressure on margins?
Margin pressure on reselling products is accelerating and will necessarily drive us all toward providing services. Our industry needs to decide what types of services it is going to provide. The preferred method seems to be RMR, but the bigger question is which services, what is the value proposition, what are the customer outcomes?

Services by definition require close alignment between the end user and integrator, so the move to services also brings in the need to rethink how results are measured, data is shared, operational history is assessed and other factors. Viakoo’s technology puts us in the center of these discussions between end user and integrator, and we see this as a very current and critical industry topic.

About the Author

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Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

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