3 Ways Security Pros Can Address DIY Disruption

This year was ushered in with a huge announcement that ADT would be offering an IPO with an estimated valuation of a whopping $15 billion. Considering that and new enterprise-level entrants into the security space initiating their programs, such as Ring and Nest along with several others, where does that leave the average dealer?

By average dealer, I mean the company that has between one and 10,000 accounts, is typically a family-owned business operating mainly in a small regional area, has limited marketing funds and in all likelihood has not experienced much appreciable growth recently.

New Competition Represents Greenfield Opportunity

I speak with many of these businesses, as they are the foundation of the alarm industry and can be found everywhere. I’ve found that the majority are not aware of what is coming their way and if they are aware, they do not have a clear-cut direction of how they will handle the future.

Here let’s focus on what is on the horizon and what you can do to best position yourself. Not to worry, the sky is not falling — but adjustments will need to be made.

The reaction by most dealers to new DIY companies is to try to compete in the DIY space on both features and price. However, in the haste to compete on price, the features and the technologies that are driving the DIY companies are not given the attention they deserve or being overlooked altogether.

These new entrants are entering this space with no preconceived notions or knowledge on how security has been done over the past 100 years, nor do they even need to care. These brilliant companies are approaching security from a completely different angle.

They are looking at safety and security as a holistic approach that has to be easy, effective and reasonably priced along with an overall mandate that false alarms are not tolerable. It’s impossible for the average dealer to effectively compete against the giants in the DIY space.

The high cost of Internet advertising and support will bankrupt smaller sized dealers who are trying to keep up. Today, professionally installed systems have approximately 20% -25% penetration (depending on who you talk to), which I don’t foresee changing much in the coming years; the DIY space is truly a greenfield opportunity.

Dealers need to keep doing what you have always done — provide “boots on the ground,” unbelievable service, personal relationships and face-to-face expertise. But you also need be able to provide the features and services that DIY companies are going to be providing.

That means get out there and understand what all this “new stuff ” does and how you can meet the needs of the consumers, especially the younger consumers that have a different perspective on how security should work for them.

Tight Collaboration Needed to Meet Subscribers’ Expectations

“What’s coming” can be broken down into three distinct areas. Each will require special attention and changes from what most dealers have been doing thus far.

Platforms: This is probably the most dramatic change in the alarm industry since the digital dialer. If the systems you are selling and maintaining today are not platform connected, you are destined for failure, especially in the residential marketplace.

There are many platforms to choose from today and more are on the way. There are solutions that involve installing a new system, and there are also many solutions that can “bolt on” to existing systems. Subscribers have expectations that they should be able to control, understand and modify everything from a single application.

They should be able to change the call list, change passwords, cancel or verify alarms, view and interact with central station history and operators and be able to do anything else they need to all from one interface. This requires both the application and the central station to be in lockstep.

Video: Being able to view what is really occurring at the protected premises is going to be crucial. This is critical for the central station specialists and for the subscribers. Subscribers will need to have immediate situational awareness and be able to make a real-time decision on whether to dispatch or not.

Platforms will soon have enough artificial intelligence and information to use video in conjunction with sensor and event data to make reliable threat level assessments. The future of zero false alarms is starting to come to fruition.

Central Stations: You’ll have to collaborate with a central station that understands subscribers’ needs and that is willing to dedicate the resources to get all of this working in a seamless ecosystem. Expect much more consolidation in the wholesale market, and more full-service companies to transition from running their own monitoring centers to partnering with a wholesale center to leverage their technology and scale to provide what will become necessary and core functions.

The future is very bright and there will be more opportunities to grow and prosper. We’re on the cusp of a technology evolution in the security business that will make the public safer by reducing false alarms and adding forensics that are more advanced than ever. Take advantage of this renaissance and harness the changes to propel your business forward.

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