Video Monitoring: A Market for Those With Vision
Adobe Stock image by Gorodenkoff
Clients Take Time to See Value Proposition; Pricing All Over Map
One of the greatest barriers for any new product or service is discovering how to effectively market it to its intended audience. This process usually takes a lot of research, beta testing and good old-fashioned trial and error. Many great concepts end up on the scrap heap due to flawed marketing. You can learn all about them on the History Channel.
Although it is still in its formative stages, video monitoring is extremely unlikely to become one of those misbegotten services. It appears destined for great things and may eventually become standard for most security installations. However, as new as it is, the big challenge is making the value proposition clear to potential clients.
“It becomes an expense vs. performance question,” says Rao. “The fact is although retailers pay outrageous false alarm fines each year, they are miniscule in comparison to their losses due to shoplifting and employee theft. Retailers easily justify large expenditures for cameras to curb those problems, but may feel expensing additional cameras for alarm verification is relatively unimportant.”
Today’s trend-setting providers really have to understand the potential customer’s business and needs, be capable of demonstrating how video monitoring can meet those needs, and have the patience and fortitude to handhold them through the entire process.
“Proposals are based on a risk analysis of a facility and feedback from clients/prospects on their greatest security concerns, be it internal theft, workplace safety or external threats,” explains Leggett. “As systems are designed based on the specific needs of the user, selling video applications are dependent on identifying and solving those needs.”
Being that it is newer, more complex, specialized and expensive, the sales cycle is generally longer for video surveillance than traditional alarm monitoring. This is particularly the case for two-way interactive services, which can take up to four months or more to get a client to sign on the dotted line.
“Getting large chain accounts can be very time-consuming,” attests Patrick Hart, interactive video manager of Irvine, Calif.-based National Alarm Computer Center (NACC). “But once the chain recognizes the return on investment and how the monitoring can solve major problems, they usually want interactive monitoring at all their locations. The concept of viewing the alarm remotely is easy to sell.”
Several dealers and central stations are finding that once prospects are able to conceptualize what video monitoring can do for their business, it practically sells itself. Service offerings that generate that level of interest often take off like wildfire once word spreads far and wide enough.
“During the sales process, it is not uncommon for us to see our prospect experience a moment of clarity where they suddenly ‘get it,’” explains Strasser. “At that point, the prospect typically begins telling us about the applications that they feel we could provide for them and how the services could play a role in cutting costs and improving security, safety or reducing losses.”
Coming up with a price point that entices customers as well as covers all your expenses and allows for a reasonable profit is tricky, especially with a new, evolving market like video monitoring. There is certainly no uniform method thus far as providers experiment with assorted cost structures.
“It seems to me that pricing is all over the place. There does not seem to be an understanding of either the cost to provide the various services or what the market will bear,” asserts Cindy Smith. “I have seen pricing from $90 for straight video verification all the way up to $1,800 per month to provide guard tours and escorts for people going to and from work.”
A set monthly fee is one approach, but some providers are discovering it makes more sense to charge a base rate with per-incident changes on top of that, particularly when twoway interactive is involved. After all, it takes a lot more resources to respond to 10 calls than one during a given month.
“We’ve found that customers are interested in a fixed monthly rate,” confirms Hanley. “Caution should be used, however. Like activity from traditional burglar alarm systems, the volume of activity from video-based systems can be unpredictable. Once a customer begins to enjoy the benefits of remote video services, the requests for supplemental guard tours can follow. Pricing your services on a per-incident basis can ensure profitability.”
Market Has Taken Flight, Poised to Soon Go Like Gangbusters
The big question regarding video monitoring is not if it will explode, but when. Some believe it is already taking place.
“The market is already huge if you know where to look,” contends Strasser. “The advent of universally available broadband and reliable hardware have placed the market in position to transition from the early adopter phase into mass-market adoption. I believe we are in the very early stages of this move and it will take a few more years for us to get well beyond the early adopter phase.”
That is a conservative estimate compared to some providers, who believe catalysts such as anti-terrorism and alarm verification will expedite the rate of penetration.
“In 2006, the market will be a barnburner,” promises Brannon. “Jurisdictions are implementing nonresponse verification policies, which will drive video monitoring more than anything else. It’s going to be three times as large in 2005 as it was this year, and then we are going to see it increase by leaps and bounds during the next two to three years.”
While it’s true security dealers, systems integrators and central stations will continue to reap healthy helpings of intrusion and fire alarm, CCTV and access control systems business, those that eschew the remote video monitoring market will be leaving money on the table – lots of it. However, getting involved in this market takes careful planning and a sizeable investment of effort and money. Now is the time to get off the fence and set the wheels in motion.
“To offer the services we now offer it’s taken two years of research and development,” says Baskin. “Both central stations and dealers alike that are not offering video monitoring services should start immediately developing their video strategies. Similar to the way digital communicators changed the security industry decades ago, video monitoring will change it going forward.”
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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].
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