Selecting a Central Station

Infrastructure is a consideration in making choices

• By Kevin Lehan
• Apr 01, 2015

Independent alarm dealers have much at stake when choosing a central station that will enable them to compete with the industry’s largest companies.

The most important part of the evaluation is reviewing the contract that governs your relationship with the central station, which is your most crucial vendor. Check the language closely, so you don’t encounter surprises about your obligations.

You should also consider the breadth of services a central station offers and how you could sell those to new and potential subscribers. This affects the recurring monthly revenue (RMR) you are able to generate.

Lastly, excellent and ongoing subscriber service is essential, so be sure to ask questions about monitor training, quality-control programs, staffing levels and the central-station infrastructure, including where its back-up facilities are located because having them too close or too far away is not smart planning. This will give you a good idea about that company’s ability to provide the mission-critical task of monitoring your customers’ alarm systems.

Look for Dealer-Friendly Contracts

Building a subscriber base that generates RMR is what every alarm dealer strives to achieve. However, one of the greatest risks dealers take is when they sign contracts for monitoring that lay claim to this asset.

When choosing a central station, be sure to consider these contractually important points:

• Do you maintain complete account ownership?
• If you fall behind on billing, do you forfeit your accounts?
• Can you cancel accounts with no obligations or cost?
• Are cancelled accounts refunded pro-rata to the day?

Some industry contracts even have a right of first refusal for a dealer’s accounts. Think about it—if you wanted to sell your accounts (or the company), after you have performed all of the due diligence, the central station can match any offer or even claim the accounts based on a predetermined formula that could be lower than what you could get on the open market. Contracts like that strip away the autonomy of being an independent business owner.

It’s All about RMR

Maximizing RMR is how companies grow. Dealers do that by suggesting and selling additional services to meet the needs of their customers and entice new ones.

When evaluating a central station, keep in mind that they must be able to monitor all types of accounts. That includes the older, current and next-generation technologies that will come to the market. It means acceptance of all of the standard reporting formats and communication technologies in case you purchased accounts from multiple dealers. It should also allow monitoring of specialty accounts, like jewelry stores, banks, commercial-fire systems, as well as intricate video-alarm systems.

The growing demand for video is due to the positive press those systems receive when captures are made and the footage is shown on TV news. It also helps that hardware prices are dropping, so now is really the perfect opportunity to promote video to new and existing customers.

For example, video for event verification is a common use now because some emergency response agencies require confirmation that a crime is happening before dispatching police. One solution to ensure response when needed is to incorporate video equipment that triggers a signal should an alarm-event condition be met, such as motion being detected when an area is to be vacant.

When an alarm event happens, a video clip automatically transmits to the central station for immediate review. Central-station monitors then become digital eyewitnesses to the actual event, thus empowering them to tell the PSAP that there is a crime in progress by describing what they saw at the property. This witness verification raises the priority for dispatch and hastens response by officers who want to make arrests at the scene.

Dealers can market video as a labor-saving system. “Video guard” and “video guard tours” are custom applications you can offer to maintain security in a specific area or throughout a property. For video guard service, the subscriber specifies a window of time during which a central-station operator monitors a recurring event via a system-connected video camera. Often, this is used to oversee the completion of a transaction, such as delivery of materials or depositing of funds into a safe each night. This real-time observation helps ensure the integrity of such events. Also, by outsourcing the supervision of recurring transactions to a third-party company, the possibilities of collusion are virtually eliminated.

A video guard tour is another customizable service that could eliminate or significantly lessen the cost of hiring a team of guards. For both homes and businesses of all sizes, central station monitors are able to “tour” a property by accessing a specified list of cameras and scanning for exceptional conditions, events or unauthorized entry. This type of visual tour of the property can take place multiple times each day, depending upon the subscriber’s needs.

A video system can also act as a “digital doorman.” Depending on the level of security needed at the premises, digital doorman service can be arranged to keep an image record of every person entering a premises for later review (if needed) or a central-station operator can be empowered to grant or deny access to certain zones, as spelled out in dealer-defined protocols.

The image-logging service is a simple and cost-effective way for a customer to see who was in the premises at a certain time/date should there be an incident that inquires investigation. The more intensive access-control service requires central-station operators to confirm identification information— often a passcode—before allowing a person access to certain zones.

Subscribers Want System Engagement

Your customers expect what the competition is selling on TV: access and full system control through a smart phone or a desktop computer.

This includes arming/disarming, remote video access and alerts when certain alarm conditions occur such as open/close, which is used commonly to alert system owners when their children enter the home. That alert could prompt Mom or Dad to access the system’s video cameras to see if their child is doing their homework.

Some families even choose to have certain zones within the system send immediate notifications of an alarm event. This could be set to notify if the liquor cabinet or a gun safe was accessed or an office breached. Other uses for open/close notification are alerts when the cleaning company or a dog walker arrives and leaves.

The same principles of notification apply to commercial systems too— when the customer wants to be alerted of a certain event, they can be informed by text or email.

If they want to witness the unloading of materials at the dock, they can log in to their system and remotely watch this too. With today’s technology, virtually any system-connected device can give a status report or notify subscribers via your central station, including mechanical systems, thermometers, humidity gauges or gas sensors, to name a few.

Subscribers Want Courteous Service

When there is an alarm event, your customers want quick, courteous interactions with knowledgeable monitors who provide accurate information.

While every central station will promote that they provide a high level of customer service, be sure to ask about their training procedures and staffing levels. Find out about quality-control measures and how they evaluate monitor interactions with subscribers. This will give an indication of the importance the central station places on servicing your customers.

Be sure to ask about basics things that are important to your customer, such as:

• How many rings to pick-up an inbound call?
• How long does it take a subscriber to receive a call after alarm activation?
• How is the telephone answered? Using a generic name or your company name?

The answer to each of these questions should help you determine which central station will best serve your customers.

Your Central Station as a Marketing Tool

Most consumers assume they have reliable protection with a monitored system. However, alarm dealers know there is a tremendous difference between a third-party audited (UL or FM) central station and one that maintains an alarm receiver and employs a few call-takers.

The reason third-party audits are important is that when it comes to alarm monitoring, failure is not an option. There must be built-in fail-safes, contingency plans and multiple locations to achieve true redundancy. A simple generator does not cut it. Further, to satisfy UL and FM, there are training and staffing provisions that must be followed, as well as periodic testing procedures that must be performed.

Many central stations boast that they have redundancy in their system. The issue is not redundancy, but instead, “Where is the redundant backup facility?” Is it so close that the same tornado can take it out with the primary station? Is it on the same electrical grid that could affect both if a regional disaster occurred?

Or is it too far away? For example, Station “A” is located on the east coast and Station “B” on west coast. Let’s say both stations operate at 50 percent of capacity, handling 10,000 signals and request calls a day each. If Station “A” fails, the company switches all of the signals and phone calls to Station “B.” Switching the signals and calls is not the issue.

The issue is that Station “B” may not have the staffing to handle the additional signals and request calls in a timely manner because the company cannot pick up and move its east-coast monitoring staff to the west coast. The result is that alarm signals sit in queues and inbound phone calls go unanswered.

To use your selected service provider as a market differentiator, make sure your customers understand that a central station’s redundancy should be purpose-built to allow the smoothest transition if a disaster occurred, as opposed to building another facility just because UL requires it. Just remember, it is up to each alarm dealer to decide who they want representing them to their customers, but one thing is for sure, monitoring is not a commodity service.

This article originally appeared in the April 2015 issue of Security Today.