Going To Market
- By Bart Didden
- Mar 01, 2017
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.