Electrical contractors (ECs) are bearing witness to dramatic changes in the physical security industry. Everything is moving to the network. Customers connect to systems and services with smartphone apps. New methods of delivering security and monitoring continue to emerge, and ECs can seize these opportunities if they are nimble and adjust their business models for a younger demographic.
Smart functionality and convenience are engaging customers looking for a fully connected experience. Popular consumer brands are making their way into security and professionally monitored systems, reshaping the channel. For contractors, engaging customers with experiences ultimately creates a long-term relationship, according to Jay Kenny, senior vice president of marketing at Alarm.com, Tysons, Va.
While integrating technologies such as energy management, lighting and security were possible before, it was largely prohibitive because of the expense. However, costs have come down.
“Affordability and addressability—the ability to connect devices and products for additional functionality—is driving adoption,” Kenny said. “The more devices connected, the more value to the end-user. When conveniences emanate from security, the value of every device is magnified. Consider the connected light. You can use an app to turn it on, and—when it’s connected to the security system—it can be used to illuminate when the alarm goes off. Or you can use motion sensors to trigger the light. The ability to seamlessly integrate other sensors makes that single solution even more important.”
Kenny said security providers are embracing the future by moving to interactive services and changing their approach.
“It’s a different sales process,” he said. “Historically, the security system was all about a specific product and panel. That’s changed to a solutions-based sale. The upside is that, because products have so many different options, there is greater opportunity to upsell with additional components. All this creates engagement and boosts the lifetime value and longevity of the account.”
Impact of millennial buyers
Once perceived as a threat, self-installed products are now gaining ground, with room for professional security providers to grab a slice of the pie.
“[Millennials are] not in the food chain for traditional alarm systems but are driving the self-installed market, the biggest growth category for security,” said Keith Jentoft, Integration Team member for Videofied/RSI, a Honeywell Company, Minneapolis.
Jentoft is the former president of RSI Video Technologies and the inventor of Videofied. Honeywell acquired RSI Video Technologies in March 2016.
In June, the company unveiled RSI DragonFly, based on the Videofied platform, which uses wireless motion viewers with camera/passive infrared sensors to detect intrusion and send an alarm and video clip.
DragonFly is a self-installed but professionally monitored security system—referred to as a “business in a box” for security contractors. It consists of a hub communications kit and indoor and outdoor video cameras that range in price from $100–$200. The wireless communications uses 900-megahertz proprietary radio technology and has a 1,000-foot range between the camera and the hub. Outdoor cameras support night vision with infrared illuminators.
Security companies can become part of the DragonFly network, collecting a percentage of the $10–$30 in recurring monthly revenue based on the customer’s selection of basic or premium monitoring. Basic monitoring allows users to arm and disarm systems and view video clips with a smartphone, selecting dispatch to the professional central monitoring station on demand. Premium monitoring, which is also smartphone controlled, automatically sends alarms to the central station where dispatchers assess the video clips.
Jentoft, also director of sales for DragonFly, said the offering opens nascent markets, targeting millennial buyers who aren’t interested in or won’t pay for professionally installed alarm systems. Once contractors capture this demographic as customers, they can upsell professionally installed alarms once they have more disposable income.
Your piece of DIY
“We didn’t create the self-install market; it’s here and marching onward,” he said. “DragonFly gives security contractors options, so they can play in this market successfully. It provides real security but at a price point millennials can easily buy into.”
DragonFly gives contractors a tremendous amount of flexibility in specification. For example, they can use it at their own sites to receive notification of deliveries or employees arriving early who need access. They can remotely arm or disarm the system or dispatch to central monitoring if a theft is in progress.
“The electrical contractor signs up to be a dealer under one of our monitoring providers,” Jentoft said. “They can also sell the service to general contractors to protect capital equipment or high-value assets. About 60 percent of the monitoring charged to the customer goes back to the contractor. There are no support or training costs and the dealer is notified when a customer has installed. And now, they have customer who may upgrade to a more robust, traditional system in the future.”