Authorized Dealer Programs

Sept. 12, 2006
Is there one that will help your business?

In the ultra-competitive and ever-changing security industry, savvy security dealers are always looking for ways to grow business. One of the more attractive ways to bolster your company is to partner with an established, national manufacturer or monitoring service. By joining one of their authorized dealer programs, you could be gaining access to training, marketing support, and/or cash advances that take your business to a whole new level.

Of course, simply joining any dealer program isn't going to be a magic key to success; and even if you do find the perfect program, there is no guarantee that you will be accepted into it. However, you can maximize your chances of a good fit by studying the different programs available and knowing what they offer.

Monitoring Service Programs
Dealer programs offered by monitoring services companies give a variety of benefits such as leads and sales training. Mainly, however, they are about buying your monitoring contracts to supply you with additional capital to grow your business. Some programs want to buy all of your contracts, whereas others encourage you to retain ownership over at least some contracts or give options to buy them back later.

“The key function of the Monitronics Authorized Dealer Program is to purchase monitoring accounts from our nationwide network of independent security dealers,” says Robin Poulides, marketing program manager, Monitronics. “We attract and build this network by offering a wide range of support services to security dealers. Besides the initial funding provided to the dealer through their selling alarm accounts to Monitronics, we also offer revenue sharing, sales materials, management support, and some of the highest multiples in the industry.” When comparing the different monitoring dealer programs, one of the deciding factors for you could be the multiple that is offered. For instance, if your average monitoring contract makes $29.95 per month and the multiple being offered is about 30, then $29.95 x 30 is about $900. So if you had 40 contracts to sell, then $900 x 40 equals $36,000, which is about how much money you would be paid up front by a program that offers a 30 multiple.

But there is more to a good program than just the multiple, says Jim German, senior vice president of marketing, Security Associates International. “We provide competitive multiples, but that's just one component of what SAI does. What we really want to do is help a dealer's business grow.” He adds that SAI's Authorized Dealer Program has dealers of all sizes. Many of SAI's larger dealers take advantage of the company-offered IT support; whereas small or mid-sized dealers tend to place importance on the product negotiations SAI has with different manufacturers. SAI also encourages dealers to retain ownership over at least a few of their accounts.

In Criticom's Cash Advance Program, dealers retain 100% ownership of your monitoring accounts because rather than buying the contracts, Criticom finances them, explains Dan Linscott, vice president of Criticom International. While dealers do like to retain ownership of their accounts, one of the drawbacks is that they will get a lower multiple. So there is a give and take.

Another consideration is not just what a program promises, but what it actually delivers. You might have certain expectations as to what revenue streams will be delivered to your business and when. If that money is consistently being delayed due to paperwork or other kinks in the system, then it could add up to be a big problem.

ADT's Authorized Dealer Program is celebrating its tenth anniversary this year. “Dealer programs come and go but we've been here the whole time,” says Bill Barnes, vice president of dealer development for ADT. Yet ADT does not want to just rely on its reputation, he adds, so they are always improving on the sales training, the operations efficiency, and teaching dealers how to generate new leads.

Manufacturer Programs
Dealer programs offered by manufacturers tend to give dealers incentives to sell a lot of their brand's products. In order to facilitate this goal, the manufacturer might provide sales training and discounts on their products for Authorized Dealers.

For example, Tyco's Software House Dealer Certification Program identifies and recognizes the highest performing Authorized Integrators of the Software House product line, says Chuck Hutzler, senior director of product management for Tyco Fire & Security's access control and video systems. “The program was implemented to foster the highest level of product service in the access control and security management industry,” he explains.

Dealer integrators are rewarded for their investment in Software House. Among the benefits are product training, information technology certification, and a long-standing history of customer satisfaction. “Participants are awarded a Software House certification seal to use on project bids, clerical work, website, and/or trade show material,” says Hutzler.

“By design, the credentials of the Software House Dealer Certifications have stayed consistent from year to year,” he adds. “However, using critical feedback from our consultant community, we are currently evaluating the addition of project management pieces, as well as additional ASIS recognized training and certifications.”

Over at Bosch, a dealer program has been around since 2002. “By signing up for the Bosch Certified Security Dealer (BCSD) Program, dealers have access to the full line of Bosch's comprehensive security solutions,” says Nicole Herz, manager of channel programs, Bosch Security Systems. “We also offer a variety of benefits that make business for our dealers more efficient and cost effective. Benefits include the Co-op Advertising Program where BCSDs have the opportunity to earn co-op funds that can be applied to promotions of their company in correlation with Bosch using the Bosch Certified Security Dealer logo.”

At the end of 2005, Bosch added the Promotional Items Program to the BCSD, says Herz. This was done as a direct result of feedback from dealers who wanted help promoting their companies and partnerships with Bosch.

GE Security's dealer program, Security Pro, has been around since the mid-1980s and has grown to about 300 dealers, says Jeff Johnson, Security Pro program director, GE Security. Due to its growth over the years, the program is in the process of transitioning into smaller, more specialized programs to better meet everyone's needs.

“When we do focus groups with the dealers, the dealers have told us consistently that the thing that really, really endears them to [Security Pro] is the ongoing education and training, sharing of best practices and ideas that dealers do share when we get together on dealer trips,” says Kirk MacDowell, residential marketing leader, GE Security. Throughout the year, GE Security hosts conferences around the country for their dealers.

How to Decide
So with all of the different dealer programs and variables involved, how do you pick the program that is right for you? Well, ADT's Barnes is confident in his assessment. “First and foremost I think of the name because it's going to get me in more doors and it's going to allow me to sell more without changing my business model,” he says.

Opinions differ on the subject, however. For example, Bosch's Herz has this to say about picking a manufacturer's dealer program: “First, the dealer should know the volume of sales they do annually with the supplier, as this is often…a factor in the commitment. Dealers should also research the benefits offered by the individual programs and evaluate which ones would be useful and fit into their business model. A dealer should then analyze the relationship with the manufacturer in general. Is their staff responsive? Do they have a problem-solving attitude and so forth? The general business relationship says a lot about the support the dealer can expect to get from the program.”

SAI's German recommends a general view. “Dealers should look for people who are going to serve their needs—and that's the primary objective,” he states.

“Obviously, there's a certain amount of conformity that a dealer will have to comply to in any authorized dealer program, however, they should also make sure that they don't have to lose their identity and they don't have to change the way they really do business. This is supposed to be a partnership, not a change of ownership,” German asserts.