Security firms cope with rising gas prices

Lessons learned from 2008 gas spike helps companies minimize impact of rising fuel costs

When gas prices spiked across the country during the summer of 2008, many security companies were caught off guard and scrambled to find solutions that would help them conserve fuel. Indeed, companies were forced to pass these increased fuel costs onto their customers and others even contemplated eliminating some services due to the pain they were feeling at the pump.

This time around, with prices hovering near $4 per gallon and expected to rise, dealers and guard service providers are taking the lessons they learned three years ago to minimize the impact of fuel costs on their businesses.

When gas prices started to creep above $3 per gallon earlier this year, Patrick Egan, president of Select Security, a Pennsylvania-based provider of commercial and residential security systems, said his company raised their trip charge by $10, rather than implement a fuel surcharge as they had done in the past.

"It's the 80/20 rule," he explained. "Eighty percent of people pay it and they understand it and 20 percent of people would call and complain and we would waive it. But, it generated a significant amount of income to offset the fuel costs."

Egan said that it is easier to increase the trip charge than try to explain to customers why they are being asked to pay for a fuel surcharge.

"Rather than having a separate line item that they can pick up say 'why am I getting a trip charge for $59 and a fuel surcharge of $10?' Now we've just taken the $59 and made it $69 and it has not created the phone calls that the separate line item fuel charge did a few years ago, so we think we're on to something," he said.

Two years ago, Egan said that Select Security stopped doing installations on Fridays and switched to four, 10-hour days in which their full-size installations vans were on the roads, which has also helped reduced the company's fuel consumption. The company also has a complete automation system that allows them to see where their technicians are at all times.

In addition, Select Security purchased a dozen Chevrolet HHRs a couple years back for their inspectors and service techs. Though they get between 28 and 30 miles per gallon, Egan said that the HHRs are not big enough for certain service technicians and the company has subsequently ordered five, fuel efficient Ford Transit vehicles.

The company also entered into a contract with Enterprise Fleet Management, which Egan says will help them save on fuel on maintenance costs. Though the Enterprise contract, the company has been issued Wright Express gas cards, which provide the company with an immediate discount off the pump price.

"We are constantly looking at and monitoring our fuel consumption," Egan said.

Another Pennsylvania-based company that is using lessons learned from the 2008 gas spike to help it keep current fuel costs down is Vector Security. Vector, which installs electronic security systems and also provides uniformed guard services, starting using a GPS-based fleet management system in 2008 called FAS-Trak.

The company implemented the system to accomplish a variety of ROI goals including; wage and overtime savings; increase vehicle productivity; eliminate unauthorized vehicle use; reduce vehicle operating costs; reduce insurance deductible payment costs; reduce vehicle "down" days; reduce fuel and oil costs; reduce fleet administrative costs; and, increase employee productivity.

"Service vehicles are either profit or loss centers. You've got to make certain that if you're going to be providing service to customers that you keep your price levels within a reasonable (range)," said Dave Merrick, vice president of marketing for Vector Security. "People go and they begin charging $25 per service call, gas increase charges and things like that and it doesn't take a long time for people to do one of two things; either not service their alarm systems or just say 'this is too expensive for me' and just cancel the service in general."

What's unique about the FAS-Trak system, according to Chuck Gerginski, FAS-Trak services consultant for Vector, is that it provides analytics for fleet managers to see why a vehicle or technician is not as productive as it should be.

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