Going it alone in business can be tough. Fortunately, security dealers have a wide range of programs available to them that can help support their business operations. One option is formal dealer programs, typically operated by companies that will purchase dealer accounts in exchange for getting all or part of the recurring monthly revenue from those accounts. Equipment manufacturers also offer a range of support programs for established dealers that use the manufacturer’s product. There are many different approaches to dealer programs and SDM will be updating the various programs throughout the year. In this article, SDM talks to some dealers about why they opted to participate in a dealer program and how it has benefited their businesses.

A HEAD START

When the owners of Boise, Idaho-based Tym Security founded the company about 18 months ago, they opted not to go it alone. Instead, the company joined the Security Networks dealer program, with the goal of selling some accounts to Security Networks.

“Going with an established company gave us peace of mind,” comments Scott Montgomery, Tym Security vice president.

When Tym sells an account to Security Networks, the dealer gets a flat fee up front, as well as a portion of the monthly recurring revenue. Tym’s owners like this approach because it brings cash into the company sooner, enabling it to grow more quickly.

“If we weren’t in the program, we would be limited in how many customers we could take on per year because of cash flow,” Montgomery explains.

As a startup company, Tym also liked the fact that Security Networks operates a Five Diamond central station and has an A-plus rating with the Better Business Bureau. Customers are impressed with credentials such as that. As Montgomery notes, “It would take years for us to establish that on our own.”

MARKETING SUPPORT

Unlike Tym Security, Annapolis, Md.-based Chesapeake Systems Service operated alone for a number of years before joining the First Action dealer program, now known as Dynamark, a few years ago. Although that program also offers dealers the option of selling accounts, that’s not why Chesapeake Systems joined the program.

“We’re in the program for product and dealer support,” explains Jack Rainey, general manager of Chesapeake Systems Service.

The company joined the program after learning that, among other things, Dynamark/ First Action offered services to help dealers design and quote jobs, volume discounts on key products, and a range of marketing support options. Dynamark has helped Chesapeake Systems get funding for marketing initiatives through manufacturers’ cooperative programs. Among other things, the program operator has helped Chesapeake create a new trade show booth and use Google ad words to drive a 54 percent increase in webpage traffic in just one quarter.

“Small business owners don’t have the time or experience to devote to those kinds of things,” Rainey comments.

LEASING & TECHNOLOGY OPTIONS

Marketing support also was what attracted Complete Security Systems of Marlboro, N.J. to the Honeywell Commercial Security Systems dealer program.
Complete Security Systems, which has been around for more than 25 years, joined the CSS program three years ago at the same time that it opted to use Honeywell to replace a previous equipment supplier. The appeal of the program, was “the support piece — networking, training and marketing,” notes Complete Security Systems president Chris Mosley. 

Mosley likes having the opportunity to exchange business ideas with other CSS dealers. Honeywell CSS also has helped Mosley’s company with search engine optimization, sales training and establishing a leasing program with a third-party supplier that regularly works with Honeywell CSS dealers.

“In a down economy, more people are taking advantage of leasing,” says Mosley, who was able to avoid the time-consuming task of lining up a leasing provider on his own.

Complete Security Systems also likes some of the new technology it has been able to introduce as a result of being in the program. This includes two new applications that are now available through the Complete Security Systems site — an automatic bill-paying application and an application that lets customers securely review images from their remote video cameras.

Although declining to provide specific numbers, Mosley says Complete Security has seen a significant revenue uptick since joining CSS, which he attributes at least in part to the company’s participation in the program.

Editor’s Note: The dealer programs profiled in this article represent just a few of the many available programs in which dealers can participate. If you operate an authorized dealer program and wish to update SDM’s readers about it, please contact Laura Stepanek at (847) 405-4027 or at stepanekl@bnpmedia.com.

 First Alert Focuses on Lead Generation, Total Connect Video

Honeywell’s First Alert Professional continues to recruit “selected” new dealers to add to what First Alert Professional president Joe Sausa calls a “network rather than a dealer program.” An important aspect of the network, which focuses on the residential and small business market, is the ability of participants to get together regularly to generate ideas about how to grow their businesses, Sausa says.


In 2010, First Alert tested a program with about 25 of the program’s 330 dealers that used statement stuffers, leave-behind brochures, radio ads and other materials to generate leads. “Before we launch it to the entire network, we wanted to be able to say ‘We have real data. Here’s what we did,’” explains Donna Namoroto, program marketing manager for First Alert Professional. One dealer in the trial saw an increase in sales of 56 percent after just a couple of months, she says. Based on success stories such as these, First Alert plans to roll out the lead generation program to the entire First Alert Professional base in 2011.
Another focus for First Alert Professional for 2011 will be Honeywell’s Total Connect product and service offering. Total Connect lets end users control their alarm systems or view event-triggered images from video surveillance cameras from an iPhone or other Internet-connected device. The latter capability makes the service appealing even for people who are not interested in an alarm system, notes Ken Weinstein, Honeywell senior vice president of program marketing.
Security Networks Goes Nationwide

Security Networks, which previously operated a regional dealer program, expanded its program nationwide last year, notes Gary Franklyn, vice president of business development for the company.
The organization also began funding video accounts in 2010 and expanded the capability of the central station that monitors dealers’ accounts. Through arrangements that Security Networks has with Honeywell and Alarm.com, Security Networks dealers can offer their customers the ability to use a smartphone or Internet connection to look in on their home or business. “We’re funding additional revenue streams for them through that offering,” Franklyn comments.


Additionally, Security Networks dealers can offer customers identity theft protection through a third-party at a special rate negotiated by Security Networks. The provider “offers the identity theft solution at our negotiated rate that is lower than dealers could get on their own,” Franklyn explains. “We give them three months free and then they get the negotiated rate after that.”


For 2011 Security Networks plans to add home automation capabilities to its offering and is considering offering monitoring for systems that use the Internet for communications. In today’s market, many end users do not have a traditional phone line and although Security Networks currently monitors cellular-based alarm systems, the company would also like to offer an option that doesn’t require a monthly charge for cellular service.
Diebold Adds Training & Service Options

Diebold, which introduced its dealer program just 18 months ago, added new training and service options in 2010. On behalf of its dealers, the company negotiated a special arrangement with Skillsoft, which offers a wide range of online training programs — from business administration to technical training, including training aimed at obtaining Microsoft certifications. Dealers pay a flat fee for unlimited training for a year.


Diebold also expanded the services it offers to its dealers, adding a monitoring service for elevators that helps summon help if an elevator gets stuck. The company also introduced what Steve Ipson, Diebold director of advanced dealer development calls “camera with a purpose.” As he explains, “We had software engineers integrate video management into our central station automation software so that motion detection at the camera creates an event in the monitoring center.” An important benefit of that approach, Ipson says, is that dealers can sell video without an alarm panel.


For 2011, Diebold hopes to expand the number of manufacturers that offer discounts to dealers in its program. The company also is working to expand the number of access control platforms that it can remotely monitor and is developing a mobile application that will tie in with its monitoring service.
Central Security Group-Nationwide Plans Aggressive Expansion

Central Security Group-Nationwide received a cash infusion in 2010 from a private equity firm.
“We will be growing the dealer program exponentially,” notes Glen Albers, Central Security Group-Nationwide vice president of dealer operations. “We have more cash to put to work now than we ever have before and we need to spend it by buying accounts.”


Albers’ position with the company is a new one. “They never had anyone before that covered the dealer program from soup to nuts,” Albers says. In addition, the company is recruiting other personnel to support the dealer program.


The reason Central Security Group opted to expand the dealer program, Albers says, is that “the track record is there — the large majority of new customers we gain come through the dealer program.”


To support its expansion, the company is planning a new advertising campaign for 2011. Albers explains that the program differentiates itself by not using holdbacks — a common practice in which a dealer program operator pays only a portion of the price for an account to the dealer until three to 12 months after the acquisition. In addition, Albers says the multiple of monthly recurring revenue that Central Security Group pays dealers for accounts is “very attractive.”


Albers adds that the company has some other plans for 2011 that are in beta test, but declines to provide details.
First Action Is Now Dynamark

First Action Security Team has re-acquired the Dynamark name, which it now uses for its dealer program.
“A lot of the Dynamark old guard is coming back,” comments Tom Piston, vice president of sales and marketing for the company. “We have 100 dealers on board since we kicked the program off less than a year ago.”


Although Dynamark buys accounts from dealers, that isn’t the sole focus of the program, Piston says. “We’re trying to put together a program for dealers to grow their business so they don’t have to sell an account until they want to do it.” He adds, though, that “If a dealer needs to expand his fleet, he can peel off 100 accounts and sell them to us.”


First Action has a strong product distribution background, passing on volume discounts to dealers in the Dynamark program on products that include video, access control, audio and home automation as well as alarm systems. The company also has acquired a central station, which it expects to launch later this year. “We want our dealers to use our central station,” Piston says.


In 2011, Dynamark also plans to have a multi-day national convention that will include training and a black-tie awards dinner party night.
Honeywell CSS Works Closely with A&E Community and AHJs

Honeywell’s Commercial Security Systems program, which targets dealers that focus on the business market, focused heavily on demand generation in 2010, observes CSS president John Lorenty.
For example, CSS hired a marketing manager from the architect and engineering community with the goal of getting Honeywell products included in more bid specifications. The manager organized numerous meetings with CSS dealer salespeople and the A&E community and also helped create websites and newsletters targeting that community. The program was so successful that Honeywell also has launched a similar program involving authorities having jurisdiction (AHJs).


Honeywell also sponsored numerous “lunch and learn” events with dealers and potential customers in various vertical markets that generated opportunities for 50 percent of attendees, Lorenty says. The CSS program has six people dedicated to dealer development who helped dealers improve their operations by working with them to develop new commission plans, hiring practices and providing what Lorenty calls a “playbook” to help dealers launch new offerings such as managed access control. Dealers that previously closed one out of four deals are now closing one out of three, Weinstein notes.


For 2011, the Honeywell CSS program, like First Alert Professional, will focus closely on Total Connect and on Internet marketing. On the Internet side, Honeywell has enlisted a marketing firm to help dealers search engine-optimize their websites. One dealer that previously came up 99th in web searches now comes up as number two or three, Weinstein says.