Wholesale Monitoring: Four Executives Analyze Prosperity Opportunities, Challenges
The executives offer their experience and advice for dealers as the third party central station market continues to evolve.
Find out which RMR-based services excite the panel, the challenges they see threatening the very existence of many independent dealers and how they are helping position them for success one by one with personalized guidance.
What can you do to spark a fire under some of these dealers who are standing pat in regards to POTS and other outdated technologies?
McCARTHY: In our newsletter every month we publish articles that reference the sunset and what they should be looking at and what we offer and what their options are. With AlarmNet-A going away we are getting notifications all the time from the third-party services that we push out to our dealer base, as well and proactively calling these companies and saying, “These are the accounts that are affected, here are your options and these are the dates you are looking at.” It is a lot of extra work for us as well.
HERTEL: I don’t want to ruin anybody’s day but POTS has sunsetted. If you think there is going to be a day in the future [when POTS will sunset], you are sadly mistaken. The reality is POTS is gone today as we know it and it’s not coming back. The bigger picture, to be honest, is not just the POTS issue. Kevin mentioned AlarmNet-A. We gave dealers two years advance notice that this network was going away and they are still screwing around with it. 2G, from an AT&T perspective, is gone. In the U.S., 2G is either gone or going quickly. 3G and 4G are being put in, and already in Asia and parts of Europe 5G is being deployed. The message alarm dealers need to understand is nothing is forever. Their mentality behind “put a box on the wall and forget about it for 30 years” has got to change. It doesn’t matter what platform you are going to buy today – whether it’s AlarmNet or Alarm.com or AES or it’s this or that – the reality of it is they have to understand change is imminent. It’s not a 30-year cycle; it’s going to be a five-year cycle. They need to get used to that. They need to build that into product to make it easier. But they also need to build that into their sales process. They need to be able to tell people about technology refreshes. Cellphone companies certainly aren’t embarrassed about saying, “Hey, guys, it’s time to switch out your handsets.” They manage to do millions and millions of them every day. That is a change for our industry. That is the bigger message – your communications platform, like it or not, is going to be changing on you in a five-year cycle and be prepared.
Their mentality behind “put a box on the wall and forget about it for 30 years” has got to change. It doesn’t matter what platform you are going to buy today … the reality of it is they have to understand change is imminent. It’s not a 30-year cycle; it’s going to be a five-year cycle. They need to get used to that. They need to build that into product to make it easier. But they also need to build that into their sales process. They need to be able to tell people about technology refreshes. Cellphone companies certainly aren’t embarrassed
about saying, “Hey, guys, it’s time to switch out your handsets.” They manage to do millions and millions of them every day. That is a change for our industry. That is the bigger message – your communications platform, like it or not, is going to be changing on you in a five-year cycle and be prepared.
Sharon, what is driving this complacency? Cost? Is the undertaking to switch out all these radios just too much for some dealers?
ELDER: I don’t know that I see it as being about complacency. I see this as having to take a look at your business once a year and say, “It’s 2016 and what do I look like?” and then making a plan. One of the things we endeavor to do at NMC is really to inspire the dealers individually through newsletters and educational programs to say the market is growing. We see that a lot of the new connects that are going on are cable companies. We see the market expanding really at a rapid rate. How do we help you retool your business? What is your piece of that going to be? Sometimes that is as remedial as handholding and discussing why they are having attrition, getting them to choose alternative paths of communication. Because I agree with Morgan, POTS lines are a thing of the past and helping them with that transformation. That being said, I think like most central stations we have a combination of dealers that need to be retrofitted, inspired and tuned in. Then you have these new dealers or these younger dealers who are just so smartphone savvy and interactive; that’s a whole other ballgame. We really work hard to take that existing dealer and help them figure out what is that plan for the next two to three years, and sometimes that discussion winds up they are not going to be a dealer in two to three years. They are going to sell; they are not desirous to make that transition.
HERTEL: They are going to find out their accounts are not near worth what they thought they were.
ELDER: That’s exactly right and so then you have to have that discussion as well. So, I don’t know that it is complacency. I see some of this as being more like business management. The smaller the dealers are, the more hats they are wearing, the more challenging it is for them.
Tracey, are you seeing dealers deciding all this change is too much and getting out?
RITCHIE: We definitely see an increase in dealers selling. A lot of the larger companies have been doing a lot of acquisitions. I think that that plays a part in it. But part of what we do is try to teach dealers to see this as an opportunity. This is a touch to their customers. They have to go out there and use it as an opportunity to upsell. Change their technology. Maybe get them into the automated home. There are a variety of new services out there that their customer may or may not be aware of, and if their customer is not aware of it, they are going to be soon. Somebody else is going to knock on their door and sell them on a system that has all these services that maybe this dealer did offer but they didn’t let their customer know. So we are trying to help the dealers be proactive in this arena as well and not see it so much as a hurdle, but as a way to grow their business and change and adapt to the future.
Is there a particular service area you view as promising to create new recurring revenue?
McCARTHY: We have developed technology here at EMERgency24, a software platform for mass notification with two-way communication. Unfortunately with all of the school shootings and those types of incidents this has become a big topic on everyone’s agenda. With schools, hospitals and large office buildings, we are trying to educate dealers to offer this new software platform and get them to go out and talk to their existing customers. Just like Tracey said, touching their client base again.
HERTEL: For your average integrator – many who don’t have a clue about RMR, they just don’t – it’s really a broad stroke for them to begin to understand there is a whole new world out there. In terms of monitoring and supporting everything from traditional intrusion systems to network monitoring to video to mass notification to guarding operations. There is a whole plethora of services that are available to what I will term an integrator that today they are not taking any advantage of. Very few integrators do anything in the RMR world. It’s all about the install and out.
ELDER: The biggest thing, whether you are an integrator or an alarm company, you want to develop a synergistic sales plan so that you’ve paid for your client from an RMR perspective and you minimize the other trades that are needed to be brought in because you are a one-stop shop.
RITCHIE: It’s always a good idea for dealers to try and expand their service offering across the board. Maybe not necessarily one particular area but seeing what might fit for them. There’s video, there’s also a newer view on network monitoring helping businesses keep track of their security and their Internet. There is a huge, wide spectrum of services that we can bring into the monitoring arena and create that RMR.
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About the Author
Rodney Bosch, Senior Editor
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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