There is good money to be made providing managed security services such as access control and video. Profiting from that business sector is no cake walk, however. Both the sales model and the sales person require a whole new mindset. For those who approach managed services thoughtfully, the recurring monthly revenue (RMR) stream can be a winner.
“Managed services—Software as a Service (SaaS)—is the future of our company,” said Rueben Orr, CPP, principal and co-owner of Security Install Solutions Inc.(SIS), Denver. He describes SIS as a small integration company that does a fair amount of government access control. “The recurring revenue model has proven itself time and again,” he noted. “SaaS offers a company like ours a good business model for the future.”
There are challenges. “With managed services, you are doing a lot more for the customer beyond what usual alarm services require,” Orr said. The integrator’s own people have to be available around the clock.
“Advanced services are the wave of the future,” agreed Tom Szell, senior vice president of Sales at ADS Security, Nashville.
Most alarm sales and installation jobs are one-and-done. The salesperson ferrets out what the customer requires, offers a system to meet that need and the company installs the system. Only if there is a problem does the company get a call-back from the customer. Those encounters tend to be negative experiences for the customer—not good selling opportunities.
Not so with managed services. Integrators offering managed services expect to touch their customers at least a couple of times a month, if not more frequently.
“Managed services get you more tightly linked to the customer,” Orr said.
While that is true, Rajeev Dubey, director of Marketing at Brivo Systems LLC, Bethesda, Md., warned that not every company is suited to this kind of effort. “Can everyone succeed in this business? I don’t think so. You need to craft a business model that will succeed. Your goal must be relationship building, over a long term, with less attrition. You need to staff accordingly,” he said.
The upside for those who succeed, Dubey said, is that providing the customer complete access to the service offerings eventually lowers the total cost of operation to the dealer.
The typical target customer for a managed service sale is a small to midsized company. They might have a one-person IT department but that individual’s focus is not on security and making key cards. Small firms probably do not have the cash to hire any IT staff full-time.
Who’s in control?
In many such cases, that responsibility falls on an office manager or the head of human resources. While they might be responsible for adding cards or controlling access, the focus of their job is far removed from both IT and security.
An integrator with the right staffing can take a lot of hassle out of the human resources department and do a better job of securing the premises.
But don’t write off the big company. Larger organizations often focus on their own core competencies and are interested in automating other responsibilities like security.
“The person you are selling the service to must see the benefit and value of paying someone else to do the job right,” Orr said.
The right people for the task
Despite what the pundits say, it can be tough to teach an old dog new tricks. That is especially true for alarm system salespeople. Just because a salesperson has a track record with basic alarms does not mean he or she should be turned out on the street to sell managed services.
That traditional salesperson sells hardware and turns operation of the device or product over to the customer.
“It is a different type of sale,” Orr emphasized. “There is much more touching the customer. It is a service business. Traditional service representatives have a tough time grasping that concept.”
“You really should have someone who understands the concept of total cost of ownership and can talk to the benefits of managed services,” Orr said.