Security Dealer & Integrator

AUG 2018

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.

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50 Security Dealer & Integrator / August 2018 "e licensing thing is an oppor- tunity, but they are going to figure that out," Pearson says. "If our dif- ferentiator is that we are licensed, I don't think the consumer will ulti- mately care about that. As soon as you are arguing about licensing, you are losing – you don't want to be fighting on technicalities." How to Compete If the Amazon Effect can lead to going-out-of-business sales, what can our industry do? One solution, according to a few of the panelists cited, is to move residential security systems to a leased equipment model that somewhat mirrors the mobile phone industry. "e economics of the business have to change in order to compete," Brinks' Johnson says. "Instead of free systems, let's get $200-400 up front and go to a zero subsidized model… consumer financing partners will be a tool that will allow us to do that in a consumer-friendly way. e wireless companies have already conditioned our customers to be ready for this payment; and they have also condi- tioned them for zero-percent financ- ing – it is just a matter of working out the model. "ink about how the economics change for your business if you can get a few hundred dollars up front," John- son continues. "is is an important part of the equation as the monthly rate starts coming down. At Verizon, it is however much per month – I don't pay for my phone outright, it just shows up on my bill." "It works for (the mobile phone industry) because of the expectation that in 2-3 years (the consumer) will want a new phone," Pearson adds. "We are likely to start seeing that on the security and connected home side, where more and more tech- nologies are entering the fray and customers are going to want them. Once the equipment is paid off, it is a great opportunity to offer them some of the new technology instead of reducing their monthly rate. en it turns into a huge retention and renewal opportunity." ere is also the obvious service and response advantage held by tra- ditional security dealers. "You get the truck roll – you get the knowl- edge that if something goes wrong, you aren't going to have to spend six hours on the phone with customer service or on their online help desk – somebody is going to come to your house and fix these things," says Blake Kozak of IHS Markit. Another aspect is the ability of security dealers to be able to offer the same – or in many cases better – level of technology. "Anyone who is out there just selling alarm systems is going to be le in the dust," Melan- con says. "We can offer great service all we want, but if you are not offering the same types of products, then you will be gone." is is where your interactive ser- vices provider comes into play, and Johnson says typical security dealers are not fully leveraging those capabili- ties. "We should all go back and revisit the features with interactive service providers – there are a lot of features and marketing resources we might not be leveraging because we have been focused on some of the basic service packages," he says. "If you have to pay extra to get that, you might just have to take a little erosion on the margins to be able to enhance your offering and really sell it." Finally, the proliferation of so much new technology may mean that the DIY route is simply too difficult for many consumers. is is where a good security dealer can make headway. "I'm not sure the last time you've been inside a Lowe's, but many of them have opened these huge, inter- active areas in the store with an array of smart home products," explains Bruce Mungiguerra, SVP of Sales and Business Development for Nortek Security & Control. "Just walking in there is overwhelming even for me. Where would I even begin to figure out what is going to work with what? We as an industry have to continue to do more to educate the consumers as to the role that we play in the Internet of ings and how we can help make their lives easier." ■ Anyone who is out there just selling alarm systems is going to be left in the dust . We can offer great service, but if you are not offering the same types of products, you will be gone." – Bryan Melancon, Home Security Operations Manager, Cox Communications Cover Story Borders bookstores were one of the first casualties of the Amazon Effect. Photo: Dwight Burdette/Wikimedia Commons

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