Interactive Services

Boosting RMR in the dealer world

Life in the digital age has never been better. We’ve graduated from rabbit ears to flat screens and 24-hour photo processing to instant downloads. Laptops can fit into a purse as easily as a desk. Smartphones, the descendants of those bulky 1980s carphones, now essentially double as mini-computers.

Communication, transportation and relaxation are more convenient than ever, and the security industry is bundling together all those comforts to aid a vital necessity— the safety of customers and their property—through the use of interactive services.

As leading vendors have developed and contracted this new technology, dealers now can pitch security systems in unprecedented ways and take their recurring revenue to new heights.

The New Wave

Just as the Internet has made the world seem smaller, interactive security services can shrink the vulnerability people feel when they leave their families and homes unoccupied, whether they’re just across town or stuck in a different time zone.

With a click on a compatible smartphone or tablet, they can remotely arm and disarm their system, set arming reminders via text or email and create no-show alerts if a family member—let’s say, their child returning from school—did not disarm at a certain time. They can set specific codes for users who have panel access, receive severe weather alerts and track the system’s event history. It is like the customer never left the house.

Home automation is quickly catching on, too. Z-wave technology allows homeowners to remotely manage their locks, draw their shades, adjust their thermostats and switch their lights on or off to stay energy efficient. Vacationers can even use the “Home Alone” technique, giving potential intruders the appearance of a full house by scheduling lights in certain rooms to turn on and off at specific times.

Video monitoring currently has less penetration, but it appears to be the next step in upselling existing users. By placing HD cameras in and around their homes, customers can take live look-ins at front-door visitors, locked cabinets or baby cribs. Strategically-placed sensors also will snap photos of motion and send pictures via email or text.

These developments have revolutionized the industry, and companies have seen a particular boom over the last 18 months. More dealers have adopted the technology and used it to support customers with superior service while seeing their RMR rise considerably higher than they’ve been accustomed to in the past.

The increase in interactive services has coincided with the gradual extinction of telephone landlines. According to a 2012 report by the National Center for Health Statistics, 34 percent of American homes now have cell-only service, nearly double from the end of the decade. With some 165 million active smartphones in the United States, security sales reps are covering fertile ground.

“The way our dealers approach consumers has changed over the past couple of years,” said Travis Miller, senior manager of dealer development at Monitronics International. “Opposed to using crime statistics, they’re focusing more on building awareness of home automation and accessing your alarm system remotely. It’s kind of turned the whole approach upside down. You’ve got more dealers today that are interested in interactive services.”

RMR and Retention

How much more revenue might a dealer rake in by offering interactive services? It depends on the dealer, how they go to market and how much they’re willing to charge. Dealer programs have varying policies on rates, but a comfortable range for these applications appears to be around $50 per month.

Combine them with the two-way voice feature on panels, the ability for central station operators to directly communicate with customers during an alarm event and the total package becomes even more profitable. Miller’s company, Monitronics, serves more than 800,000 customers through its nationwide dealer network and has become the industry leader in two-way voice, in addition to its interactive offerings.

Another benefit for dealers is initial payment. Customers are willing and able to put more money down in an agreement for state-of-the-art services. It’s a strong indicator for the quality of an account and the likelihood that it will remain with the dealer long-term.

There also is an element of defense. Dealers can protect themselves against competitors and slam campaigns simply by offering the most cutting-edge equipment.

“We’re giving everything to the customer so that no other company can come in and say, ‘We have this and they don’t,’” said Curtis Kindred, owner and president of Texas-based American Defense Systems.

The Right Sell

As alarm systems increase in sophistication, salespeople must refine their pitch accordingly. Gone are the days of flipbooks and generic doorto- door tactics; reps must provide an exciting visual and interactive presentation that engages the potential customer. The millennial generation is likely more tech savvy, but older prospects need a clearer demonstration of the system’s many capabilities.

For this reason, some dealers invest in tablets for their reps. It’s a long-term approach. Though more costly in the short-term, a couple of sales will quickly cover the increased overhead.

Product expertise is an obvious requirement. Dealers can seek out local vendor representatives for inperson or over-the-phone training, and dealer programs typically provide similar assistance.

The key, sales experts say, is driving home the day-to-day value of the new services to customers. Rather than manually setting their alarm once or twice a day, they now can manage their system anywhere, at any time, and in turn, enjoy greater peace of mind.

The logic is simple: The more a customer uses their panel, the more loyal they will be. “From an attrition standpoint, a customer is less likely to discontinue their service or feel like their system is not as valuable if they’re using it every day,” Miller said. “They have access to it at their fingertips on their phone or their tablet.”

At their fingertips. It’s a brave new course for the industry, and a lucrative opportunity for its dealers.

This article originally appeared in the January 2013 issue of Security Today.

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