Securadyne CEO Boethel Tells How to Beat Margin Erosion and Much More
SSI Editorial Advisory Board Council member and CEO of Securadyne Systems addresses top integrator challenges.
My April issue editorial discusses security integrators’ top 10 challenges as indicated in SSI‘s annual Systems Integration Study. I consulted with a handful of trusted colleagues and contributors to the publication for ways integrators can best overcome these challenges, perhaps even turning them to their full advantage. In one of several posts, here are several comments from Carey Boethel of Securadyne Systems.
No. 1 Eroding Gross Margins
Gross margins are a byproduct of perceived value. If gross margins are eroding, it is usually a result of diminishing perceived value by the customer. To counteract margin erosion, systems integrators need to find new ways of creating additional value. My experience has been that the quality of gross margins is intrinsically tied to the complexity of the problem being solved. For example, in new construction where a general contractor is the purchaser, the solution is predefined and the only “problem” is finishing the job on time, gross margins are going to be thin because perceived value is thin – any contractor can meet a construction schedule with a little planning and coordination. However, if an end user needs to mitigate premises liability while also reducing their annual security operating expenses by, say 20%, now you have a legitimate problem to solve and the gross margins will be commensurate.
No. 2 Technician Shortage
The scarcity of reliable, technical talent is one of, if not the single biggest challenge facing our industry today. I have found that the best way to address this challenge is to invest heavily in the development of people rather than recruiting them away from competitors, which can sometimes yield opportunistic job hoppers. Cultivating talent and investing in the development of people means they are more likely to stay with you over the long term because they understand and appreciate the investment. Plus, when you develop talent rather than poach it, you are afforded the opportunity to train your people the way you want the job done rather than someone else’s methodologies that otherwise may have to be unlearned.
No. 5 Direct Competition From Manufacturers
For as long as there has been a channel, there have been channel conflicts, and “coopetition” is something that all of us have struggled with from time to time. When selecting business partners, we follow a two-step process where the first step entails vetting the technology and the second vets the manufacturer’s business model. If the prospective partner has the absolute best product available on the market, but their business model does not complement our own, we look for another partner.
No. 7 Lack of Sales Training
The lack of sales training is an industry-wide challenge. Most security systems integration sales professionals have had little or no formal sales training. As a result, most struggle with concepts like overcoming objections, spin selling, insight selling, consultative selling and especially closing. To make things even more challenging, loss prevention is in my opinion one of the most difficult concepts to sell because you are trying to prevent a negative rather than ensure a positive. The benefits can often be subjective and intangible. And there is way too much emphasis on selling product features. That’s not where the integrator should be focusing; instead, the integrator should be solving customer problems by uniquely applying technology and demonstrating how its utility will create tangible, quantifiable value.
No. 10 Competition From Network/IT Companies
IT VARs can only effectively compete with security systems integrators when the value proposition is technological. The network is their domain and if the security solution is viewed simply as an extension of the network, then they will naturally be well positioned on the deal. The same goes for electrical contractors; if security is viewed as just another low-voltage trade, electrical contractors can be formidable competitors because of solution bundling. But if the engagement is about solving a unique security challenge – especially one that is latent or ill-defined – then IT VARs and electrical contractors tend to struggle because they lack domain experience.
Security Is Our Business, Too
For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.
A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!