Dealer Programs to the Rescue
It all started in 1996 with a few people sitting around a table and has proliferated into vast networks of support for contractors. Today, large-scale dealer programs have provided a high degree of support to dealers who no longer have to just go at it alone.
Pat Kelly, CEO of Kelly Protection in Burbank, Calif., was there at the beginning. ADT had inherited a small dealer-servicing program as part of its 1996 acquisition of The Alert Centre. Kelly, who had been an Alert Centre dealer, remembers attending the first contractor conference when ADT took Alert Centre’s program and expanded it and started what most acknowledge was the first major dealer program.
Kelly says that first meeting was nothing like the packed dealer program conventions of today. It was a small table with six dealers sitting around it. It would be the last time ADT’s Authorized Dealer Program would be called small. What were six became hundreds, and what was one dealer program has become many.
“It grew to a bigger number,” Kelly says. “It wasn’t long before we realized we needed more tables.”
Even as they have expanded, the concept at the heart of dealer programs has remained the same: For manufacturers to link with the dealer – and for dealers to link with other dealers – to provide a combined power none of them would have alone.
There are benefits for both the contractor and the contracting company from dealer programs. Whether it is the financial backing, networking, training or just the peace of mind that they’re part of something greater than themselves, there’s something every contractor can get out of a dealer program.
Strength in Numbers Is Basis Behind Dealer Programs
In the cutthroat competitiveness that marks the electronic security industry, it can help to have friends. There’s an instant credibility gained by joining up with a dealer program.
“This allows them to compete at a much larger level,” says First Alert Professional Security Systems President Kevin O’Connor. “It brings resources they wouldn’t have had.”
A dealer program can, in effect, increase a security company’s selling power without adding a single sales person to the payroll. The contractors who install and integrate the products become a partner in a supplier’s success and are more likely to go the extra mile.
“These types of programs are all about loyalty, creating trust and a mutual respect for each other’s business model,” says Michael Benedict, director of GE Interlogix’s Security Pro dealer program. “In essence, this group of dealers becomes a manufacturer’s real-time core business partner by nature of this relationship and it works to make both companies more successful and, ultimately, more profitable. Such is the circle of life in our business.”
A security seller can increase its reach through contractors from geographic areas to which it had not been able to devote its attention. In turn, a company also stands to gain territorial superiority when it recruits the better contractors in a certain market. “A dealer is a small independent security company that can sometimes be more efficient than having a corporate branch in the smaller markets,” says Clark Smith, director of dealer operations for Brink’s Home Security.
Keys to Producing a Dealer-Supplier Marriage Made in Heaven
The relationship between the boardroom and the contractor can be akin to the relationship between a parent and a sibling. While a supplier may not be responsible for the creation of that dealer, they nurture and teach the contractor and give them the tools they will need to be successful.
But like parenting, there is a formula to running a successful dealer program according to Craig Leiser, who studies dealer programs for security industry consulting firm Sandra Jones and Co.
“The marriage made in heaven is where the program has a real product, a commitment to provide support and takes its time and qualifies the dealers it selects,” Leiser says. “If you’ve got that, you’ve got one hell of a strong program.”
Programs Give Financial Boost of Capital to Contractors
Access to training programs, marketing materials and new products isn’t worth anything to an installer’s growth if they’re broke. Financial backing allows a contactor to worry less about the bills and concentrate more on their alarm business’ overall growth.
However, Leiser says that it’s important for dealer programs to keep a controlling hand on where their financial backing goes and not just provide handouts. Many dealer programs avoid providing financial incentives altogether because of the worries of not getting anything in return in terms of sold products or loyalty.
However, Bill Barnes, ADT’s vice president of dealer development, says dealer programs shouldn’t be scared off from providing financial backing as long as the backing is done right. “Without financial backing, many dealers just couldn’t afford to grow,” Barnes says. “We’re going to invest money we know we could get a return on. We encourage dealers to grow smartly.”
There are also programs that deal exclusively in the financial backing of contractors. Programs like EMAC in Ojai, Calif., and Security Alarm Financing Enterprises (SAFE) in San Ramon, Calif. can act as a specialized savings and loan for electronic security contractors.
The PSA Security Network is another unique type of dealer program. In fact, officials with PSA are quick to say that they are not a dealer program, but more of a dealer cooperative where installers and integrators actually own a piece of PSA.
That said, even in a culture of dealers “owning” the program, it is important for PSA to get something in return. “We depend on our members to purchase from us. That’s how we fund our association. That’s how we survive,” says PSA President Bill Bozeman. “We can’t survive without our members and we think our members survive better with us.”
First Alert Professional Security Systems has plans to expand the power of its dealers. See the news item.
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