Going at it single-handedly in any business presents challenges, but security dealers are not in it alone.
Dealer programs have been around forever, and also include some well-branded franchises of the past. But maybe you haven't been keeping up with them and if that's the case, you should know that they've changed with the times and have ushered in a new era of cooperative branding and marketing and other pluses that add value to systems and services.
Now, while we don't want to get into the nitty-gritty about which is better, there are basically two types of programs, those that help generate additional recurring revenue and those in which a dealer sells their accounts or a portion of them. Which works for the individual depends a lot on their model; and let's just save that particular discussion for another time.
So which dealer program should you choose? Or which dealer program chooses you? Yes, the partnership between a dealer and manufacturer or product-sponsored dealer programs, such as Honeywell Integrated Security (HIS) Dealer Program, is just that-a partnership that works both ways. There are a number of things you want to question when considering a dealer program to partner with: What is the real purpose behind why a dealer program was set up? Is the dealer program really coming to the table and providing you with tools and resources you need? If you choose to commit to being a dealer for a particular company, will they offer training? Will they offer technical support? Will they help with designs on complicated projects? Is it a product line that has some exclusivity to something that separates it from the open distribution products? What's the line of products and does it fit with your customers?
It's a good idea to approach any or all dealer programs with a bit of skepticism and a lot of super-sleuthing.
"So what if a manufacturer has a dealer program giving slightly better pricing and some sales tools?" questioned Steve Crespo, president, Security101, West Palm Beach, Fla. "If there is no quality to the product, you should not be selling it." (Security101 is a franchise operation with integrator affiliates/members.)
Security101 finds complete package in HIS
For Security101 it was also a matter of comparing what the company's internal cost would be to gain critical resources such as those offered through the Honeywell Integrated Security (HIS) dealer program to those they would benefit from directly as a participant in the HIS program.
Security101 spent a great deal of time examining manufacturers before making the decision to go with Honeywell for a multitude of reasons: quality of product, a price point that made sense, the marketing and training they provide and their longstanding relationship with Honeywell, according to Crespo.
"Honeywell does a great job educating a dealer of the marketing tools, resources, data and information that they have but they don't force it down your throat," he added. "That is the mark of a good dealer program."
A fairly exclusive dealer program, HIS targets the higher end of the integrated enterprise systems market. The program offers products for projects that involve integration from a security platform and also with IT subsystems, ERP systems and HR databases. HIS dealers and integrators are also eligible to participate in Honeywell's dealer service certification program. Pre-sale and post-sale support includes application support; technical support; and brand recognition for dealers.
"The product offered exclusively through the HIS program is just one piece of it," explained Bill Yesnick, sales leader, Honeywell Integrated Security, Morris Township, N.J. Yesnick said training goes above and beyond product training and includes technical, sales and marketing education. "These are the resources that typically the integrator/ dealer doesn't have and is able to leverage from Honeywell."
A different 'dealer' approach
For Michael Pope, president of Safety Technologies, Medina, Ohio, the commercial security division of Audio/Video Interiors, Middleburg Heights, Ohio, and a part of the HomeConnecTeam developed and managed by Group Gerhardt, Tucker, Ga., the sales training and support the company offers is different, as is the dealer group. "They come with a fresh approach because they are not lining up behind any manufacturer," he explained. "Essentially, it is a collaboration of approximately 70 dealers working to provide advanced services in homes based on a security platform that uses a gateway into the Internet."
"We wanted to create an appetite for more systems that could be controlled from more places for less money but with recurring revenue," added Rob Gerhardt, president, Group Gerhardt. "We realized that during the buildup of the iControl platform for ADT and Comcast, the independent dealers were going to have to have an answer for the questions that were going to be created by the mass of advertising that the iControl and Xanboo-based companies and utilities were going to have. We realized that we needed to learn how to compete with the iControl- and Xanboo-based companies so we launched a series of training sessions explaining this."
This process started nearly a year ago, when Rob Gerhardt began a dealer feasibility study to address questions and methods in how to make this work. "The group has a make-up similar to that of a co-op and the idea is to learn what not to do as cost-efficiently as possible by sharing in the cost of things and learning what to do with the collective cooperation and collaborations with the group," Gerhardt continued.
"Anyone who is trying to figure out how to come up with better ways to market and leverage themselves with a group of other people-those are the companies that are going to get ahead," Pope added.
One of the inbound marketing tactics Group Gerhardt provides is called Pay Per Click (PPC) which is paid advertising using keywords that generates leads for a particular company. For example, a company that wants to get into the top three results of a Google search, it is a simple matter of paying for the service. This is defined as "inbound marketing" and is more productive than the traditional "outbound marketing" techniques (radio, TV, print, direct mail) because it connects dealers to people who are actively researching the systems. HomeConnecTeam within Group Gerhardt is the identity used to support this model.
"Anybody can initiate their own PPC program," he continued. But it's the Conversion Rate Optimization (CRO) of the clicks into leads where the real opportunity exists, according to Gerhardt.
"The moment you get into the post-click environment, where someone has actually clicked and now you're trying to get a lead and make an appointment, the cost of improving that is measured in thousands of dollars per month. The process that increases the CRO is expensive for an individual dealer but affordable for a group. Once the leads are created they are then distributed back to the members in the area that paid for them proportionate to what their budget was. Dealers get a much better result than they would on their own for the core cost of $350 per month, instead of $3,000 to $9,000 per month."
The sweet spot of interactive services
For hosted service platform provider Alarm.com, Vienna, Va., the increased upswing in companies standardizing on interactive services is one precursor they already witnessed and expect to see at ISC West next month. "You can expect to see more dealer programs offering things like video monitoring that enhances the service," said Nate Natale, vice president of Sales, Alarm.com. Arming and disarming a system, automation and energy management, lighting control-all of these interactive services are add-ons that a dealer can offer their customer. "But the important thing for dealers to consider here is that they don't have to do it all at once," Natale added.
For Guardian Protection Services, which offers the UTC/GE product that is tightly integrated with Alarm.com's technology platform, the interactive services they currently offer come in three phases, the last of which encompass Guardian offering Alarm.com's emPower services, which utilize Z-Wave technology to remotely control ones home. "For Guardian, phase one was the interactive arming and disarming ability. Phase two is video services. Phase three is when your house becomes a smart home, versus a smart phone," explained Hank Groff, national director, Guardian Authorized Dealer Program, Guardian Protection Services, Pittsburgh. The company plans to roll out their video product at ISC West.
Dealer programs have come of age and are beginning to address everything from managed services to interactive value-adds. Know what to look for, how it fits with your company and how it might help you add profitability in the future. It's a new era in dealer programs today, and there may be the perfect one for you.