Synergy. Alliances. Partnership. Co-equity. Expanding the channel. Brand awareness. Call them catch phrases, but these are the language of business today. There's no question that in today's alarm systems market, you have to stay competitive and create new paths for creating sales.
Protection One, a national level dealer that also operates a handful of central stations, understands the need for creating additional channels, and we hope the story of their experience in creating a partnership for added sales will help inspire you in your own endeavors.
In 2000, BellSouth, a prominent (perhaps the most prominent) communications service provider in the southern United States was operating an alarm business in the south, especially in the Carolinas. It was an adjunct operation for a company model that was focused primarily on selling communications services - the company has its hands in all the "pots", excuse the pun, from local and long distance telephone lines to DSL services to broadband connections and VoIP systems. Its security operations, however, were largely tied to residential alarm systems, and faced the usual hurdles any alarm dealer could expect.
So it was in 2001 that BellSouth probed around for a way to do two seemingly opposed things: 1) get out of the security business and 2) stay in the security business. Call that move an oxymoron, but the solution was a partnership. The company decided on a partnership with Protection One. It wasn't exactly a Deep South "good old boys" deal - Protection One headquarters itself in Wichita, Kansas, but it made sense for BellSouth to hand over the service, installation, specifying and monitoring to a company that was well versed in those exact operations.
In late 2001, BellSouth and Protection One announced the new alliance, calling the new services "BellSouth Security Systems from Protection One." The alliance started primarily with residential accounts according to Richard Ginsburg, president and CEO of Protection One. The systems were as you might expect, fairly simple - your basic inexpensive install with a control panel, motion sensor, door/window alarms, keypad and a monitoring contract.
The agreement was fairly simple. Protection One absorbed BellSouth's security clients, and then the two marketed the new service, with BellSouth creating the leads and Protection One fulfilling the order.
And while it may sound like a simple solution, Ginsburg notes that a deal like this isn't a piece of cake. "A lot of people look at partnerships like this," says Ginsburg, "but it's not as easy as people think it is."
Ginsburg explains that when you strike a partnership like this, you constantly have to be thinking of both partners' needs, rather than what your own company is seeking. In this case, he was partnering with a huge brand name company in the southern U.S., one that was known for dependable communications, an enormous maintenance/service department, and a propensity to operating its business like a machine. That brought issues up of quality of installations, for example. Protection One would get no slack from BellSouth for maintaining a high quality of installations and providing timely, efficient ongoing maintenance. Respecting the brand of your partner is key to a good alliance, explains Ginsburg.
Corporate culture had to change too. "There's a change of culture when you go from being a stand-alone company to a shared culture," says Ginsburg. "Communication is key."
Four years into it, the culture change is almost fully complete, and he says that employees were comfortable with the shift and have liked the alliance.
But partnerships also come down to numbers. Whether it's a small partnership of a large regional one like the BellSouth/Protection One deal, you're going to have to step up the plate. For Protection One, the deal meant a great deal of expenditures, a challenge for a company that was already facing issues of attrition and financial difficulties, and recently announced a new majority owner and debt restructuring. The number may surprise you once you add up the costs of rebranding your entire region - marking the vans, entirely new marketing materials, staff to manage the communications between partners, and a big increase in the sales force. In Protection One's case, the sales force tripled in a "ramp-up" period between 18 and 24 months.
And of course there were the naysayers who wondered what brand a smaller company would have when working with a corporate giant like BellSouth. Some worried that the Protection One brand would be lost within the BellSouth brand.
But four years into the partnership, the deal is working out well, and Ginsburg said that objections like the branding issue or the growth, while tough at the time, have smoothed out and have been all-in-all helpful to the company. And now, the relationship has expanded, with BellSouth Security Systems from Protection One moving into the more lucrative small business market in a nine-state southeastern region.
The move made sense - BellSouth was already offering a package that it called its "Answers" bundle, where small business owners could lock in high-speed Internet access, local and long distance telephone services, and even cellular systems. So it made sense to add another product into the services BellSouth could offer to its clients. And it made sense for the business owners, who could then combine bills and services from multiple vendors into one provider.
The partnerships may sometimes mean discounts on security thanks to bundling in this case, but Protection One gets equity in the peace of mind that a BellSouth product provides to business owners and homeowners and the leads from BellSouth, so the situation becomes a win-win for both parties. While Protection One wasn't able to disclose the financials for the partnership, Ginsburg did say that the partnership had been deemed a success and that the true measure was that four years into the partnership, the companies had made the decision to expand the partnership to BellSouth's small business customers.
- Tips on partnering for alarm systems sales:
- Don't expect success overnight. This particular partnership required a large financial burden and was expanded over a period of years.
- Be aware of each partners' needs. From how to display your partners' logo to knowing how to field customer confusion, create a plan for the partnership's success.
- Start small. Protection One and BellSouth didn't start marketing to all potential clients at once. They tested the alliance on the residential market, proved it could work, and then expanded to the commercial side.
- Train your staff. Misinformation and confusion about a partnership might lead to questions about ownership of the company, or improper sales or follow-through; get your staff accustomed to your partner's culture, too.