The Big Idea with Ron Davis
Do You Sell What Customers Want?
If you had just one really great idea you could share with the alarm industry, what would it be?
This month we feature Brad Morehead, CEO, LiveWatch Security
Morehead's BIG IDEA:
'Customer's wants must always intersect with what you do.'
HE FIRST TIME I MET BRAD MOREHEAD, I wasn't sure if I was being introduced to someone who had been described as a marketing genius or a linebacker for the Chicago Bears. Morehead looks like he could do either. He is the CEO of LiveWatch Security, a company that was recently sold to Monitronics, reportedly for a very high multiple. To be fair, as I understand it, the price paid included the knowledge and information that Morehead had about building up a successful do-it-yourself (DIY) business.
Morehead is among those leading today's DIY parade. He comes out of the direct marketing business, having helped grow a Chicago-based windows and doors company through the use of direct marketing techniques. Before I met Morehead, I had seen that company's commercials on TV and was impressed. Having built up a successful direct marketing business, he was looking for additional opportunities and targeted the security industry. Ownership contacted us, we helped them, they bought a good business in Milwaukee, and used that as a stepping stome into the industry. Several years later, an announcement was mad that they had invested in what is now known as LiveWatch.
DEALERS BEING DRAWN TO DIY, OTHER TRENDY TOPICS
LiveWatch was built as a DIY business, and with Morehead's knowledge and support became one of the industry's leading providers of equipment. When I asked Morehead about his great idea, he thought about it for a moment and replied: "Customers' wants must always intersect with what you do." Think about that, it defines the difference between success and mediocrity in virtually any type of business, and particularly the security industry.
I remember when Home Depot started, and very few people thought it would succeed. Everyone underestimated the desire of people, particularly homeowners, who wanted the satisfaction of doing projects in the home, by themselves. And it seems as though it now extends to the security industry, because many experts feel DIY is the fastest-growing segment of the industry.Let's go back to the "intersection of wants and needs" idea. It seems as though many people in our industry have been influenced by external stimuli — everything they read in the trade publications, news releases, at tradeshows, etc., about what's taking place in the industry. Frankly, dealers don't know where to turn first. PERS? DIY? Door-to-door selling? Telemarketing? There are so many trends that are intersecting with the things that dealers want. That's where some dealers take a chance on risking everything that they have built. Regardless of what catches your fancy, no matter how good it may be, take the time educate yourself (and possibly your staff) on all of the upside potential gains as well as the downside risks that need to be taken.
WEIGH THE RISKS & DETERMINE THE REWARDS
I remember sitting in on a speaker at a Barnes Buchanan Conference about 10 years ago. The speaker was a well-known industry veteran, who would build up a very sizable regional platform company. This company was well known, and he was well regarded. During the meeting, he was asked to speak about a new venture he was starting. They were going to launch a DIY division in his company. During his talk he waxed almost poetically about how great it was going to be. He researched it, he understood the risks, was really one of the first to understand the upside potential, and jumped in. As far as I know he was among the first to put his toe in the DIY water, and I'm pretty sure he's been successful with it.
If you're going to jump into any of the opportunities out there, understand what risks you are undertaking, and what constitutes a reward if you are successful. Sometimes you can achieve success without achieving the level of rewards that you are looking for. For the DIY market, study everything you can get your hands on. Get on the Internet and drill down into what others are doing. Look at the products that are being used in the DIY market and determine if those would be satisfactory for the way you do business. Contact lawyers who are knowledgeable about DIY and understand everything you have to do contractually.
I recently retuned fromt the SedonaOffice User's Conference where I talked with Bob Coles, President of alarm monitoring software provider, Bold Technologies. They were introducing a product, White Rabbit, which is gaining some of the attention of dealers in the industry. Another participant, security and automation manufacturer, Qolsys, also showed an interesting offering. There is a lot out there; you owe it to yourself, your customers and your potential customers to do your own due diligence and make sure what you're using intersects with what your customers want to buy.
Ron Davis is Security Sales & Integration's "What's the Big Idea?" columnist and contributing market analyst. He is president of Davis Group, a full-service consulting firm serving the security industry, which also includes GraybeardsRus. He has 35 years of industry experience, including founding Security Associates International in the 1980s.