Growing Your Security and Alarm Business for 2007

Recently, I've observed a number of transitional themes occurring among both traditional alarm dealers and system integrators. As we move deeper into 2007, more and more people are trying to focus hard on growing the top line, acquiring new customers, and trying new ways to differentiate themselves from competitors. Even in this column, we've talked about technology growth trends, and for many of you heading to the ISC tradeshow at the end of the month, new technology is sure to be a focus of your trip.

Unfortunately, as this growth theme emerges, too many are not placing enough emphasis on becoming better at keeping what they already have. Because recruiting new customers is so much more expensive than retaining old ones, it is imperative to predict which of your customers are likely to leave, and what must be done to help them stay so you can "implement" strategies to keep them.

I don't have to tell you that, outside of acquisition and new sales, organic growth can start with becoming better at avoiding cancellations and improving your ability to defuse angry customers. Certainly, the process of saving your "cancellations" and learning to generate more referrals from existing accounts costs far less than acquiring new ones. Nevertheless, today's extremely competitive marketplace requires security providers to understand customers on a more personal level and gain a real understanding of their behavior and values. This is why a specific strategy along these lines must be included in any successful plan for growth.

While our industry faces a number of common challenges today (like VoIP, changing alarm response policies, licensing and more), each company faces its own set of tests when it comes to finding new ways to drive growth and manage that growth.

The Strategic Road Map

I hear a lot about growth, but I hear far too little about proactive plans to handle and prepare for it. Frankly, I see many companies that are forced into being reactive as opposed to proactive when it comes to growth. Everyone wants to grow, but not everyone truly considers how to organize and support it.

In a prior column, I spoke about service bundling and using GPS technology as one model. Our industry is stepping up the pace of innovation when it comes to technology. Still, many alarm dealers who are talking about growth seem to have resigned themselves to offering the same old things and working in the same old ways. If you are one of them, your only chance for significant growth in 2007 and beyond is going to be the acquisition route. And if you elect to go this way, there is little doubt your attrition will continue to escalate as a direct result of competitors stepping up to offer "your" customers more.

I know you have already begun to feel the strain of accommodating a base of diverse customers who are more technology savvy than ever before. And while that is a challenge, it's also a boon to your business, because today, people are willing to pay. Thus, our challenge as an industry and as individuals is to "help them give us their money."

There is no question that price and product are easily matched by nearly any competitor. Those old days of competing on price alone are thankfully gone. Many people are starting to realize that the best way to grow is to differentiate themselves on other attributes. The most successful security companies are focusing on flexible "strategic growth" plans - and that means they are being proactive about growth, rather than reactive. Not implementing a well-designed growth plan is similar to trying to find an address in an unfamiliar area without a road map. You might eventually get there, but how much longer would it take, and who would have already beat you to the draw?

In your design of a strategic growth road map for your security and integration business, you must not only plan for the organizational support for growth, you must also include a fair amount of focus on ways to retain more of what you already have. These four processes should be part of the plan:

1. Target your sales force to drive sales in the areas you want to grow, and ensure they pursue and secure the right kinds of customers.

2. Shore up your frontline service, installation, customer service, and sales teams to be able to provide outstanding and positive experiences.

3. Include a specific plan to nurture a clear and visible "perception" that doing business with your company "adds value" to the service you provide.

4. Study the kinds of things your competitors are doing in terms of outward perception that might have caused you to lose a sale even in cases where your price was cheaper. Learn as much as you can about your competitors and make the idea of doing business with you more attractive!

It's Not the Product

After so many years of talking about efficiency and cost cutting, truly successful companies are once again turning their attention to the customer as opposed to product or price alone. Many company owners feel they have already made all the reasonable cost savings they can. Rather than looking inside, take a look outside at customer experience management. I assure you that your customers will tell you exactly what they like and don't like. Then you can measure their response by looking at your numbers. In doing so, you will have found the primary ingredient for the recipe of sustained growth. I've suggested this process before, and it's just as relevant now as it was then. Think of a company you really enjoy doing business with. Then ask yourself to name one you don't like. Ask your entire team these two questions, and then ask everyone, "Why and what makes the difference?" Align your company with those fundamentals.

There is no doubt that existing customers will appreciate these renewed efforts. Averaging out responses to a number of recent consumer studies, 94 percent of consumers ranked "quality customer service and business relationships" as the top priority. Coming in second at 88 percent, consumers listed "variety of options and bundled services" even above price and incentives. These kinds of numbers were confirmed by a recent Harris Interactive poll finding that good customer service is "more" important than product and price when it boils down to loyalty.

In the end, if you truly intend to grow from within, my advice is to take some essential steps:

- Sit down with your top people and focus on your strengths and weaknesses.

- Create a strategic growth plan using this information about your strengths and weaknesses.

- Consider where you want to be in five years time, and what steps you must take daily, weekly, monthly and yearly to get there.

- Actively learn all you can about your competition.

- Get creative and allow for some flexibility.

- Bring your front line staff into the loop and share the big picture with them.

- Train them on the very best ways to stay focused on customers, resolve customer problems, and nurture meaningful relationships.

You have to create team involvement, because when you can sell it to your team effectively and the entire workforce buys into and shares the same strategic vision, your success at growing business will exist without limits. People must understand the goal to be an active part of achieving it. When it comes to your alarm business customers, their loyalty and your growth, never forget that satisfied customers buy from you, but delighted customers sell for you.

About the author: Bob Harris is managing director for The Attrition Busters. With over 30 years in the alarm industry, he provides seminars, business consulting, and workshops to help great companies become even better. Bob can be reached at (818) 730-4690 or by email at bobh@attritionbusters.com. Learn more about The Attrition Busters at www.attritionbusters.com.

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