Security Business

MAY 2019

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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May 2019 / / Security Business 41 want to continue to utilize that investment,” Johnson says. “They have skin in the game (by owning the equipment) – it is not easy to throw away something that you paid $1,000 for, whether it was over time or up front.” So, with stickier customers, logic says it should lead to better business valuations; in fact, changing the financing structure may have an even greater impact. “The industry has been built on certain valuations and multiples of recurring revenue, and I think that as long as (banks and investors) understand that we are moving the economics to the front of the deal, I think that will actually be attractive to them,” Johnson says. “They know that having a monthly rate that is too high is an attrition risk; thus, the lower the attrition risk, the more stable the RMR. I hope the banks will see this as a very healthy change in the industry.” Another key component of the mobile companies’ use of consumer financing is the desire of a significant percentage of its customers to upgrade frequently. While innovation in the security industry is certainly not up to the pace of smartphones, there is still a path for integrators to provide more frequent upgrades in a smart home – or at least touch customers by offering them. “We really have the ability to upgrade customers to something that they want,” Nuccio says. “It’s not like you have to keep upgrading and upgrading, but there are so many good products out there today that are affordable, and (consumer financing) helps to fit it into the operating expenses within a household.” “I think all the manufacturers have been put on notice that they need to have a renewed investment in innovation,” Johnson says. “As an industry, we need to think more about what the customer is going to value…and how we go from a 7-year lifespan to an 8, 9 or 10-year expectation of the customer. We have to do a better job of innovating.” Adds Nuccio: “The reality is there are so many consumers out there who need security and home automation – everything – on one platform. There’s a whole world out there that we are not all going after, and I think consumer financing enables us to be able to do that. I think it is a very positive thing, and I think it will help in market penetration rates.” ■ Winsted® Control Room Consoles Control Rooms for Security 800.447.2257 Request information:

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