Comments on competition from cable companies / comment on remote programming for self monitored systems / more on what's a fire alarm December 13, 2011

December 13, 2011

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Comments

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Hi Ken,

I just read the comment by Dary from Security Networks and wanted to add my comment.

All over North America, each MSO (Multiple System Operator, a.k.a, Cable Company) is entering into the residential security market. Indeed, several have been in the business for many years. Time Warner is a good example as they acquired several existing security companies a while back.

Some may say the MSO's have an advantage. My feeling is these companies will advertise the heck out of security and only help bring attention to the consumer need! Think back when ADT started their 9-1-1 package in the mid 80's (yes, I was there!). They began print ads and morphed to radio and print and today, every 30 minutes on a really good TV ad. Has this hurt traditional, smaller or regional security companies? I would think the ADT ads help everyone in the business!

Ken, I do agree with your statement regarding the MSO's. Should they continue to use automated attendant systems and only promise 1/2 day service windows for non functioning security, they will have a high discontinuance rate for certain. However, keep in mind that they are not stupid! In the 90's many cable operators tried to enter the security business. They exited soon after similar to AT&T. Why? At the time it was apparent they misunderstood the needs of the security consumer.

If I was a security company today, I would do exactly as you say Ken. I would service the heck out of my clients. I would add value and enhance the customer experience with additional services like remote viewing and control. (Sorry, self serving plug since we sell that product!) I would enhance my website and provide valuable information about safety, heck even about automobile safety. Anything to make sure my clients knew clearly that my company cares about them as individuals and not another address on the street.

Mark Ingram

President, Visonic, Inc

www.visonic.com

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Hi Ken;

As for the telephone company getting into the burglar/fire alarm market, how many of their installers are licensed alarm technicians? Why do we even bother paying for our licenses if the state will allow them to train a handful of people, let them sit for a test, and then THEY become the trainers? I hate to start name calling, but anyone who would tell you that the installers today are even nearly as good as those of years past, is a damned liar. I think it would be foolish to wait for people to become dissatisfied with the poor service. The customer will likely have signed a contract much like yours, and they are locked in for five years. It's a bunch of crap, and we all know it.

John from NJ

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Ken

The large utility and cable companies figure that alarm monitoring is easy revenue to add to their existing base and in a perfect world, why not? However, it has always bothered me that these large utility and cable companies enter the alarm industry with a really unfair advantage of indirectly using Federal subsidy monies that are in reality 'our' or 'my' tax money given to these utility and cable companies by our Federal Government to finance a competitor!

Federal programs such as the 'REA' (Rural Electrification Act) were enacted to provide electricity and Universal Service Programs that enabled affordable telephone service to all of America, even in places where the population density could not provide enough customers or revenue to make it financially viable to install the infra-structure on its own! These Acts provided the capital from Federal tax revenues to subsidize large utility and cable companies to expand their customer base, revenues and profits! Consequently, these large utility and cable companies grew and then utilized their profits from an expanded customer base to expand into the alarm industry often underpricing the alarm companies who grew the 'hard way' from their own profits, which were a lot smaller!

There should be some sort of regulation prohibiting a utility or cable company that had ever received ANY subsidy monies from expanding their product line into the private sector (i.e. alarm monitoring and service) or there should be similar subsidy monies available to private industries such as alarm companies to 'level the playing field' and make for fairer competition!

Dennis R. Pieta

Computerized Security Systems, Inc

Alabama

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Hi Ken:

Just sending along some thoughts on your response to Dary regarding the cable and phone company's entry into the security space. Your feeling that these big operators "are in for a rude awakening" may be just a bit optimistic. In fact, it might just wind up being the other way around this time? In the case of Time Warner, did you know that while the alarm industry was busy looking the other way Time Warner Cable earned a CSAA 5-diamond central station certificate? I'm curious as to why so few in our industry are aware of this. While they were training their operators they were also licensing a few dozen technicians through the California Department of Consumer affairs and training sales people on "selling" skills not only on product and technology offerings. As of this very moment, if you call Time Warner's central station to cancel an alarm all you need do is press one button on your telephone and within one or two rings (on average) you are speaking with a live operator who cheerfully thanks you for your trust before asking how they may be of assistance. Since Time Warner Security launched in Southern California on Halloween day, we suspect they are putting on anywhere from 10 to 15 new accounts on average per day. Does this mean that people in our industry are losing 300 to 450 customers per month? The So. Cal. Time Warner "intelligent home" system starts at $33.99 per month and includes a litany of Pulse type features which allows you to control and view numerous functions remotely from your cell phone. Frankly Ken, the alarm industry is losing many of our core security offerings to other industries and we are failing to bundle service as effectively as we could because many of us have taken our eye off the ball for far too long. Those of us who continue to fail to provide ANY sales or customer service training for our organization leaves a fortune on the table and costs us customers. We are still competing on low price as opposed to value and professionalism and as a result our sales people seem to be afraid to offer bundled service packages because the price may cost them a sale. We are getting in the door with low price enticements and instead of up selling, we are walking out the door with little more than the original loss leader. The alarm companies who are thriving today and who can compete against big cable and telco are doing so because they have stopped talking and started doing in terms of customer service, sales skill training and strategic organic growth planning. Sadly, unless more of us become passionate about how we compete these other guys will have little trouble contuning to take away our core recurring revenue model security offerings. I recently did a pod cast with Scott Goldfine of Security sales and Integration on this very topic. Feel free to pass along the link to that pod cast to anyone interested in learning more about things to watch out for and ways we can take back our industry and begin to thrive again. Here's the link:

http://www.securitysales.com/Channel/Business-Management/News/2011/11/29/Security-Speaking-Podcast-Attrition-Busters-President-Bob-Harris-Offers-Tips-to-Improve-Business.aspx

I hope some of you will listen to this pod cast and then offer your own ideas on how we can take back our industry.

Best wishes for continued success,

Bob Harris, President

Attrition Busters

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Comment on remote programming for self monitored systems

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Ken,

A company who provides remote programming for "residential do-it-yourself'er's that aren't going to monitor the system"??? Really??? And they are looking for a contract to "protect our company"??? Really???

Paul Berry

VSA Security Systems, Inc.

Columbus, Georgia

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Response - I guess you don't like that business model....

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