Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.
Issue link: http://sdi.epubxp.com/i/738825
64 Security Dealer & Integrator / www.SecurityInfoWatch.com October 2016 ver the last several years, a major technol- ogy-driven shi in the residential security space has created new growth opportuni- ties for security dealers. Cloud services, powering connected devices in the home, and mobile apps have enabled a new category of smart home security solutions. is has expanded the market for home security and generated higher RMR accounts and stickier, more engaged customers for security dealers. at same foundational technology is now poised to cre- ate similar opportunities in commercial and small business properties, giving security dealers another "ground-floor opportunity" for future growth. While some industries are disrupted by new technology — think Uber and taxis or AirBnB and vacation rentals — the security industry tends to embrace the opportunity to generate growth through new and more-valued services. e experiences and strategies that have created success in the smart home space can draw a roadmap for security dealers to target the small to medium business space in the same way, while embracing the latest technology to help capture this ready opportunity. SMBs: An Attractive Market Whether you currently sell into the commercial space or not, it is an extremely diverse market; thus, the correct starting point is necessary to define a more precise target segment. A recent study indicates that 1 percent of busi- nesses in North America are large, 20 percent are medium, and 79 percent are classified as small. is makes the small business — typically defined as less than 5,000 square feet — a highly attractive segment from a volume point of view. A deeper analysis of the small business segment shows that it shares a number of similarities with the residen- tial security space, making it a highly accessible adjacent market for most security dealers. Leveraging pre-existing expertise, resources and models from the residential side of their business, security dealers can expand their address- able market and drive incremental growth with small busi- ness accounts. Smart Technology for SMBs The same technologies that have transformed the residential security market are poised to impact small and medium-sized businesses By Brian Lohse Market Focus A striking similarity is that small business systems oen look like residential ones — with the same panels and sen- sors — and they are also sold and monetized in a simi- lar way as well. ese similarities are also reflected in the sales and financing process and are distinct from tradi- tional commercial integrators that focus on large installa- tions with custom specifications. is requires a technical sales process, and revenue is generated from the complexity of the installation and cost of hardware; however, with streamlined packages, small business sales look a lot like residential ones. e hard- ware is subsidized and revenue is primarily generated through RMR, resulting in short sales cycles and high vol- ume account creation. ese similarities enable a security dealer to apply their residential sales resources and financial models to the small business space. In fact, we have seen a number of Alarm.com's dealer partners succeed in this space by using their existing sales force to expand their addressable mar- ket and drive new growth opportunities — without adding installation complexities. Upgrade Opportunities Most small business systems are outdated and ready for reinvention, much like residential systems a decade ago. Smart home security solutions are transformational because they significantly expand the value proposition of the systems. is is the basis for higher ARPU and stick- ier, longer-term customers. e small business opportunity is projected to unfold along a similar line. Historically, security systems have been thought of by small business owners as a necessary expense, or a "cost of doing business," similar to buying insurance. e systems were largely the same and performed one function, making this market extremely price-sensitive. However, new technology is changing that dynamic. With the right technology that deeply enhances the value of the system, dealers can change the narrative with a highly differentiated offering. O