Small Independent Dealers in the New Millenium
By Ron Davis
When I started in the alarm industry in 1969, alarm systems were monitored with McCollough circuits or direct wire. As time went on, we began using polling computers and digital dialers. Now we've added long-range radio and receivers using the internet.
In 1969 there was ADT, (fondly referred to as 'Mother', since about 80% of the industry got their training there) and everybody else. Alarm system sales and installation was primarily a cottage industry, where you sold an alarm, installed it, hopefully made some profit and then did it again. It wasn't until the mid 70's, when digital dialers allowed monitoring without special phone lines, that many residential customers even considered monitoring. Along with the digital dialer, third party central stations were created to monitor for the smaller alarm companies. After that evolution, we sold an alarm system, installed it, made some profit and got a little bit of an annuity in the form of "alarm monitoring". Soon, that little annuity became a substantial part of the alarm company's monthly profit.
In the mid 80's, the industry was panicked when Brinks introduced their "free" alarm systems. We all feared that it was the end of the alarm industry. Instead, it created consumer awareness and expanded the security alarm market from 2% to 20% of the homeowners. Soon there were dozens of "Dealer" programs installing alarms for "free", but creating huge recurring monthly revenue for their parent companies. These large "investment" companies spent millions of dollars convincing the public that alarm systems were "cheap" (heck, they are free!), but monitoring is expensive. Monitoring rates now average $25 - $35 per month.
Another change has come in the public's perception of our industry. Once perceived to be immediately available to answer any call, the national alarm companies have limited and faceless interaction with those customers. When customers call they get automated attendants, music on hold and are often eventually dropped off the line entirely. Calling again only starts the process all over again. If they do get through to a live person, it is often difficult for that person to find their account. False alarms caused by such problems plague the industry.
So much has changed on the technical side of the equation, but not a lot has changed on the human side. Homeowners still want to know that caring people are behind the company that provides security for their home and family.
Now more than ever before, the small independent dealer has both the tools to supply the organizational needs of his/her company, and the means to give personal attention and service to the customers. That warm and fuzzy attention is essential to the customer's complete feeling of security.
Current technology allows small companies to compete with national organizations and surpass them in customer service. With the advent of large third party monitoring stations, dealers now have their own "virtual" central station on the Internet.
The dealer can interact on-line with his accounts, making direct changes or viewing activity while on the phone with his customer. Low priced database products like ACT! 2000 allow the dealer to organize all communications, letters, billing, e-mails and faxes from a single program while keeping full records and histories on his account activity. These innovations on the organizational side allow the small dealer to easily double the number of customers he can service.
Today the large national alarm companies are losing thousands of customers monthly. There are many reasons for this attrition, but the most significant is the customer's perception that they are "just a number" to the national companies. They are frustrated in their attempts to contact the companies for service or billing problems. These customers are not leaving because they don't need security; they are leaving because they feel they are paying a high monthly rate for poor service. They are ready and waiting for a small, independent dealer who has the tools to offer attentive personal service for a reasonable price.
It's never been a better time to be a small independent alarm dealer!