Going To Market

Back in the day when the security industry was still maturing, the typical sales channel for the manufacturer consisted of a rep organization with assigned territories and dealers in the region, national account partners, distribution organizations and occasionally a buying club.

THE WAY IT WAS

The small reseller or alarm dealer could usually only purchase from the distributor or through the buying club and neither choice gained them any benefit from being loyal to one brand over another. Product training, technical support, marketing materials and so on were provided by the supplier, with some organizations significantly better than others. If a dealer or installer wanted to improve their knowledge of a product or learn about new technology, the obligation was on them to pay for participating in a training session at a manufacturer’s road show—providing of course one was held in their region.

Leads were usually distributed by the manufacturer to the rep organization and the small dealer or installer seldom, if ever, received any leads. Other manufacturer perks such as co-op funds, dealer trips and so on similarly were never pushed through to this segment of the sales channel.

A CHANGING MARKETPLACE

As the industry matured, security and surveillance products changed. Technologies became more sophisticated to meet demands of a changing market; pan/tilt units with timed rotation were developed to provide better coverage of an area with fewer cameras; monitors with a built-in four camera switcher developed; tube cameras changed over to chips and the notion of a digital system was on the radar with the first DVRs.

These changes had a significant impact on market growth. For example, over the last five years the market has grown by a compound annual growth rate of 8.2 percent according to Memoori’s 2016 Annual Report. A robust market also attracted new players from Asia with lower cost goods and a surge of mergers and acquisitions, including some from outside the industry, additionally helped drive growth and bring attention to the industry.

Without a doubt, the increasing demand over the years for security and video surveillance solutions have presented a solid opportunity for the small dealer/alarm installer to expand their business models and revenue prospects. The attraction however was not lost on those who quickly came to market with a do-it-yourself surveillance solution.

These systems were sold on-line or in box stores and created considerable competition for the professional security dealer/ installer.

SALES CHANNEL EVOLUTION

With the adage “if you can’t beat them, join them,” in mind, a unique sales channel was introduced to the marketplace in the spring of 2016. Launching under the brand name of Security Dealer Network (SDN), the new business venture offers alarm dealers the opportunity to become part of their sales network and receive recurring monthly income by offering DragonFly Security System DIY video surveillance and monitoring services to customers. There are no start-up or recurring costs associated with joining SDN’s dealer network, making this a no risk proposition for alarm dealers to expand their business models and revenue potential. End-users make all purchases and monitoring arrangements via a powerful on-line ecommerce platform, and dealers have no direct interaction with customers other than to drive them to the site.

Dealers are provided with individual websites which are built, branded and targeted to consumers with DragonFly Security System’s extensive marketing and messaging. Using SDN’s e-commerce platform, consumers purchase video surveillance products directly through the website. Orders are shipped for free directly to the consumer and SDN provides the central station monitoring. Dealers promote the product to their communities and receive RMR generated by the consumers’ monthly monitoring fees.

The company’s web site features a state of the art responsive design that makes it easy for alarm dealers to learn about and sign up. The site walks prospective dealers through the product lineup and answers questions about how the program works, plus it features short videos that talk about DIY video surveillance and monitoring in an informative and engaging way.

For consumers, DragonFly Security System is equally simple. Cameras are wireless and battery-operated and can be placed virtually anywhere inside or outside quickly and easily. Several different systems and monitoring plans are available to suit users’ budgets and needs. The system can be viewed and multiple actions including police dispatch can be taken through the DragonFly Security System smart phone app.

This type of service offers something the consumer systems do not—central station monitoring—which is a tremendous advantage over systems like Nest. With DragonFly Security System, not only can they view cameras at their homes and businesses through a smartphone app, they can also have the confidence of knowing that their cameras can be monitored by security professionals if they chose the enhanced monitoring plan.

The evolved go-to-market strategy covers products and services and is easy for partners and end users to understand, use and elicit value. Choices are available for both partners and end users further adding to the benefits of this new sales channel. In the end, the industry as a whole benefits.

This article originally appeared in the March 2017 issue of Security Today.

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