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I know that some in the know in the alarm industry think that DIY [Do It Yourself] alarms isn't going to take traction and compete with the alarm industry's professionally installed security and integration system, and there are some statistical studies that support that position. But I think that we will see more DIY. While it may have little impact on professional alarm installers because it may attrack customers that would not ordinarily be interested in professionally installed alarm systems, I believe it will open a whole new market; one on top of the professional installed customer market. How you benefit is by getting in on the monitoring of these DIY systems.
A DIY system can also be self monitored, but that won't really compete with a professionally monitored alarm system. It's up to the alarm industry to educate and alert the public about the benefits of professionally monitored accounts and the hazards or at least limits of self monitoring. Getting into the DIY market isn't cheap because marketing your business needs to compete with a few well healed operations. Though all you need behind you is a manufacturer willing to drop ship, a telephone support system, a central station to perform the monitoring and a marketing plan, it's the marketing plan that will be costly. And, don't forget you will need to be licensed in those states that require a license to provide alarm monitoring. You'll also need a Nationwide Alarm Agreement [which you can get by contacting our Contract Administrator Eileen Wagda at (516) 747-6700 x 312].
Bart Didden's USA Central Station is introducing a service for DIY professionally monitored alarm systems. He authored an article that appeared recently in Security Today. His article appears below. It's worth reading if you're considering the DIY market or finding out how he believes it may effect the professional alarm industry.
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One Touch Alarm / Self-install with professional monitoring
By Bart Didden
Security Today
Sept 1, 2015
The residential alarm market is growing and also becoming more complex. According to several studies, growth is now focused on “self-installed” products that piggyback on the popularity of smart phones and the tech-savvy millennials that use these devices for everything from banking to prepared food delivery. While the growth may be self-installed hardware, different approaches to monitoring services is where things become complex. After installing some products, consumers use them for free on their smart phone, effectively killing the recurring monthly revenue model that built the alarm industry.
But that is not the only approach and the potential services differ greatly in features, cost and effectiveness. The strongest approach links “self-install hardware” with “professional monitoring services” and police response. This approach delivers the greatest value to the consumer and reinforces the Recurring Monthly Revenue (RMR) model. DIY is the next “big thing” in the alarm industry, but how can it work for the typical dealer?
The self-install market is booming because it targets a new demographic that isn’t considering a professionally installed alarm system. These are the millennials buying different flavors of IP cameras and other products on Amazon, Home Depot or Best Buy, to monitor things themselves. These consumers want some kind of security but once they start down this self-monitored path, they have no relationship with an alarm dealer and they will predictably never buy a professionally installed system. This is the industry’s target group to expand penetration beyond the 20 percent ceiling where it has been stuck for decades.
In fact, the main issue for dealers is not really self-install so much as the self-monitoring. If these new consumers will actually pay for professional monitoring, the business model still works. The fact that consumers buy the hardware “up front” simplifies the business model. Dealers need far less, if any working capital if customers purchase the hardware outright. The monthly charge to the user doesn’t need to finance the costs for hardware/installation or sales people.
There is, however, an enormous problem for the typical alarm dealer barrier to entry. The costs and skill set needed to create the self-install infrastructure is beyond the reach of smaller and medium-sized dealers which make up the bulk of the alarm industry. Basic DIY infrastructure includes smart phone apps, consumer websites, eCommerce platforms, logistics and fulfillment as well as solutions for remote tech support. All this means that self-install has been the business of the “big guys” in the alarm business like ADT (who recently announced their own DIY system they created with the Korean electronics giant LG). In addition, the booming market has caught the attention of the new players outside the alarm industry like Google, Apple, and a host of start-ups. All these companies have the deep pockets or financial backing to create the necessary infrastructure needed to play the self-install game. This leaves the average dealer standing on the sidelines unable to participate in the growing revolution, until now.
USA Central has created a unique “business in a box” that provides a small dealer and even an individual installer the ability to create a DIY business with their wireless DragonFly video security system. The program includes:
A consumer-facing website with the dealer’s logo that explains the product and gives an overview of the services offered.
An eCommerce platform with the dealer’s logo where consumers buy products and services.
The DragonFly smart phone app to install and operate the system.
All the dealer or integrator has to do is promote the website and they receive a monthly check from USA Central as before unreachable alarm company customers install the equipment. The hardware is purchased by Consumers online and drop shipped to their door by the manufacturer<\m>the dealer never has to touch it. The new customer installs it and their account is on-boarded to USA’s central station. USA collects the money and the dealer receives a check each month for their accounts.
USA’s system is designed to deliver faster police response<\m>something missing in the mass market solutions found in Best Buy and Amazon. What makes this system so effective is its ability to detect an intruder<\m>inside or outside before they break in<\m>and take a 10 second video clip, send it to a user’s cell phone where they can determine if the event is threatening, and link it with professional monitoring. If the user decides they do not require police response, they simply dismiss the signal.
However, if there is an actual intruder the user can have the police “dispatched” with one button on their cell phone, sending an alarm signal together with the video clip to USA’s UL Listed Central Station. The central station operator reviews this emergency alarm signal and the actual video clip and immediately notifies local law enforcement as a virtual eyewitness. Law enforcement gives this type of alarm a higher priority and faster response because it’s treated as a crime-in-progress.
The wireless DragonFly is professional grade hardware. It is fully supervised and informs the user in the event of a power outage, if the internet connection is cut or the batteries run low. With the optional cell back-up, even if an intruder cuts the phone lines or the power fails, the user and the central station can still be alerted. The customer is also alerted to attempts to move or tamper with the sensors. For maximum coverage consumers can install up to 25 five indoor and/or outdoor wireless cameras on one system. Operating for years on battery power, freedom from unsightly power cords and cables is crucial to a simple and effective self-install system.
The consumer needs to be able to place the cameras where they will be most effective, not where there is a power outlet. This is even more crucial when pushing protection outdoors. Both the indoor and outdoor DragonFly cameras have built-in illuminators and can see in total darkness and users can remotely view the cameras from their smart phone for a visual status of what is happening. System users can combine their outdoor cameras with other users to create a “virtual neighborhood watch system” that alerts neighbors, family and trusted friends to unwanted activity<\m>this trusted group can receive outdoor alerts of suspicious activity and to work together as a team to protect their neighborhood. While DragonFly was originally conceived as a residential product, with nearly 1000 feet outdoor range the possibilities with the cell enhanced hub expands uses to construction sites and hundreds of other applications formally difficult for traditional alarm service providers.
Professional monitoring and police response remain the biggest most important expectation of a security system. Instead of police response, self-monitoring is only remote surveillance with a fatal flaw. Dialing 911 from a cell phone only alerts law enforcement of the location of the cell phone, not the local jurisdiction responsible to respond to their residence.
How many consumers know the area code and phone number of the specific police station responsible to respond to their home? In contrast, with USA’s DragonFly, the consumer touches one button on a cell phone, and professional operators immediately handle the emergency by dispatching the police to the consumer’s home for action. Police response has been the foundation of the alarm industry because consumers believed central stations would send police when they were needed.
This foundation of the RMR model can still exist with self-install. USA’s program actually delivers a stronger response because each alarm is video verified, treated like a crime in progress<\m>and the dealer makes money every month without building their own infrastructure.
Bart Didden
www.usacentralstation.com
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WEBINARS - free [these webinars will not be recorded]
MARKETING YOUR ALARM COMPANY presented in a 3 series webinar
Five Marketing Methods That Provide Results, Time and Time Again!
Presented by David Morgan of Security Dealer Marketing www.securitydealermarketing.com
Which marketing methods have worked for over 100 security companies nationwide? According to the 80/20 rule, 80% of results are generated from 20% of your activities. This 3-part webinar series will focus on the 20%, or the 5 marketing methods every dealer and integrator must be using to generate results. Best yet, each one of these 5 marketing methods are all 100% trackable.
All webinars will be from 12:00 – 1:00 pm EST
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Thursday, October 8th, 2015 from 12:00 – 1:00 pm EST
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Tuesday, October 13th, 2015 from 12:00 – 1:00 pm EST
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Thursday, October 15th, 2015 from 12:00 – 1:00 pm EST
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About Security Dealer Marketing:
For over 4 years Security Dealer Marketing, a full-service marketing agency for the security industry, has helped dealers, integrators and industry manufacturers nationwide gain market share, expand to new markets and penetrate new verticals successfully! We have helped over 100 security companies nationwide. We know what works and what doesn’t, from experience! We’ve been trusted by many of the industries biggest names, speak frequently at industry conferences on marketing for security companies and have been a featured monthly columnist, Marketing Madmen in SDM Magazine since January of 2014.
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