There is no doubt that the security industry has experienced incredible growth in the last decade that has allowed thousands of integrators and manufacturers to do new and recurring business. However, so far security integrators have relied on a predictable revenue model, selling and installing security hardware and software for end users, with a portfolio that includes door hardware, access control systems and video surveillance, among many other offerings. But this model is beginning to face great challenges, so it is necessary to explore new opportunities.
By Mark Borto*
These technologies currently require higher sales volumes to meet sales targets, due to competition and the consequent downward trend in prices. Cameras and card readers sell today for just a few hundred dollars, compared to the much higher prices of just a few years ago. To sell millions of dollars in security technology products, the sales team and account managers must work overtime, trying to find new opportunities and get the sales and profit margins needed to ensure continued profitability.
Increased competition and the downward trend in prices, also called "commoditization", are holding back growth and even affecting the situation of many current integrating companies. This brake will derail integrative companies that do not seek new sources of income with solid and stable margins. The good news is that there is an immediate opportunity worth considering: security entrances.
Security inputs are in high demand and stable profit margins
Security integrators have overlooked security inputs as an access control solution, despite their ability to address multiple risks and that they provide end users with a higher return on investment.
A very important reason for the slow adoption of these types of solutions by integrators is that only recently have security inputs become familiar to end users. Only relatively recently have Fortune 50 companies become aware of the risks involved in leaking unauthorized users, and these companies are installing large volumes and more types of security gateways than ever before.
According to the survey published by IHS in 2015, The Market for Pedestrian Entrance Control Equipment, the total market size in the Americas for all types of security entry products grew from $123 million in 2012 to $159 million in 2014. that is, an average of 14% per year. The report predicts that the inbound market will continue to experience equally strong growth until early 2020. The good news is that, unlike cameras and card readers, the profit margins of security inputs remain robust and stable.
Security ticket sales provide the opportunity for integrators to strengthen their relationship with their customers and generate new and substantial revenue streams over the next few years. By asking the right questions and understanding exactly the solution their clients require, account managers can go on to sell hundreds of thousands of dollars worth of products to a single existing customer, taking advantage of their "trusted advisor" status.
Start asking questions you haven't asked
The fact that integrators are not familiar enough with security inputs and the benefits they provide to the end user limits them from asking the right questions that motivate fruitful and meaningful discussions.
Asking the right questions can challenge all assumptions and make the client think about what they really want to achieve. What would be an example of a good question?: "Do you want to detect the presence of unauthorized infiltrators at the time it happens and respond to this event? Or do you want to prevent these kinds of events from happening in the first place?"
The next step is to request a visual inspection at the project site. Is it supervised by a security guard or is there a card reader connected to a bolt-loaded swing door? Is the customer trying to measure the occurrence of leakage from unauthorized users? Do you currently have a security ticket? How does the security input, combined with the necessary technology and personnel, perform in reducing the risk of intrusion penetration? These are all fundamental questions that you should ask that will help you recommend the right solution to the end user.
New numbers, better relationships
How could such a recommendation be made? Start by integrating the access control system with five or six optical turnstiles to provide a physical barrier at an entrance supervised by security personnel. Scroll to the perimeter of the customer's premises and you may find an employee parking lot where a group of full-height turnstiles could ensure that only employees enter certain buildings from that address, for example. Another possibility is that employee garages lead directly to the side entrances of buildings where various security revolving doors can take the place of security guards (Eastman Chemical did exactly this with its new corporate headquarters building in Kingsport, Tennessee).
If your account representative successfully closes the full sale described above, you would get a minimum of $400,000 in revenue. If you think about how many surveillance cameras you need to sell to match that amount, you'll see that the option of security tickets is definitely worth considering.
Typically, end users increase over time the number of tickets they purchase as they change and their security needs increase. This provides an opportunity to show them how they can secure other locations, which can lead to multiple sales over the course of many years, during which many end-user companies will standardize their companies' entries.
A key decision remains to be made before entering this business: do you go to the manufacturer for the installation and technical service of the products, or do you invest in technical training and get your own certified staff to grow the business? Both methods can be successful strategies as long as you partner with an innovative and proactive manufacturer that can provide a true alliance for your future growth.
For all the reasons stated above, integrating security inputs into your business model will help you more easily meet your sales goals, while also establishing additional trusting relationships.
*Mark Borto is President and Chief Operating Officer of Boon Edam Inc.*
About Royal Boon Edam
With increasingly global and dynamic work environments, the entrance has become the center of the activity of many buildings. Royal Boon Edam is a leader in the global access solutions market. Based in the Netherlands and with more than 140 years of experience in quality engineering, we have acquired extensive technical knowledge on the management of the movement of people in office buildings, airports, health centres, hotels and many other types of buildings. We focus on offering optimal services for our clients and their clients. By working alongside you, our client, we will help you determine the exact requirements for the concentrated mobility point in and around the building.
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