The past few years have taught us that the electronic security industry is essential and resilient. It has also led many to understand that operational efficiencies and staying close to the customer are paramount for long-term viability. It is time for dealers and integrators to be proactive and set their course. In order to do that with some success, they must first have some industry insights to plot the course ahead.

What might surprise security professionals?

The Good – Security professionals are still considered one of the most trusted partners in delivering safety and security products and services. Because of disruptors entering the industry, they caused traditional players to change their operational playbooks and adopt new product offerings. Although traditional players sometimes rail against these disruptors, their fresh perspectives have supercharged revenues, especially recurring revenue streams.  

The Bad – Truck rolls are getting more expensive. Dealers and integrators will need to augment field service with technology that minimizes truck rolls. 

The fight for the smart home is the next battleground for traditional dealers to address, especially as the largest technology companies on the planet are ramping up their smart home go-to-market strategies. In addition, recurring revenue is at risk for those dealers and integrators that don’t have a proactive customer engagement plan in place.   

Negative Industry Impacts Compared to Previous Years

Supply Chain and Labor Shortages – With supply chain and labor shortages, dealers and integrators may experience lower growth.  

Profit Squeeze – As a result of supply chain and labor shortages, dealers and integrators may experience a profit squeeze unless price increases for products and services are implemented.    

Response to Alarms –  As cities and municipalities implement or consider budget cuts for police services, the potential fallout may result in a more limited capacity for police to respond to alarm activity.

Positive Industry Impacts Compared to Previous Years 

Proven Resiliency – Many dealers, integrators, and monitoring centers experienced strong growth in 2021, proving that security services are important to end users, whether for homes, businesses, or governmental agencies. The most successful companies are the ones that adopted new technologies, services, and methods to market, and have the ability to add incremental and sustainable recurring revenue.  

Customer Experience – Consumers and businesses have a higher degree of interaction and engagement over the technology and services offered by the industry. This simplifies the process of managing what’s important to them on their terms. This reinforces that dealers and integrators are the go-to trusted resource that consumers and businesses expect for security, safety, convenience, or productivity needs.

Security professionals who are interested in taking a deeper dive into the industry’s trends should register and attend ESX 2022 in Fort Worth, TX, June 14-17. Over the course of 3.5 days attendees will experience industry-leading education programs, best practices, and more. It is where the industry gathers, and you don’t want to miss it.

The 2022 Electronic Security Expo (ESX), presented by Electronic Security Association (ESA), has released the full educational lineup for its educational conference which will take place at the Fort Worth Convention Center in Fort Worth, Texas from June 14-17. 

In addition to the main stage presentations and networking opportunities, the 3.5 day event includes 35-plus educational sessions across nine tracks, designed specifically for security professionals. In keeping with the event’s theme, “Security Connected,” sessions will touch on new markets and best practices that will help businesses grow and remain competitive.

Attendees who are looking to address a specific business challenge or opportunity can look at the collection of focused sessions, including: 

Customer Focused

An important component in your customer engagement strategy is delivering a hyper-personalized experience that tailors products, services, and experiences according to their needs and wants. Learn how this strategy provides an emotional connection between a customer and your brand to buy more and refer more and deepen their loyalty. Sessions in Engaging Customers Track: 

• Top 5 Ways to Authentically Keep Your Customers Loyal 
• Expert Ways to Consistently Deliver Great Customer Service 
• Leveraging Data: Analytics that Drive Customer Experience, Sales and RMR 

Employee Focused

Leading a team means inspiring others to achieve certain desired outcomes. Deciding how you manage for success is critical in today’s workforce. Learn from seasoned leaders their leadership strengths and why focusing on engagement rather than merely output will boost your company’s success. Sessions in Managing for Success Track: 

• Navigating a Tight Labor Market – Find. Retain. Augment. 
• Sales Management – Coaching Talent for Success 
• 7 Practical Ways to Become a Better Boss

The Business of Security

Identify proven practices that take your company to the next level, financially, legally, and operationally. Learn to manage your risks, improve top line revenues and bottom-line profits, and increase RMR. Sessions in The Business of Security Track: 

• Labor Utilization Methods – Best Practices to Manage Rising Costs 
• Handling Contract Modification Risks 
• Reducing Truck Rolls Through Technology and Repeatable Best Practices 
• The Internet of Litigation: Security. IoT. Cyber Attacks. 
• The Connected Experience – Security. Convenience. Privacy. 

Financial Growth

Expanding a business offers the potential for many growth opportunities. Employees, customers, and owners all benefit from sound business growth strategies with increased wages, expanded products and services, and greater profits. Learn to manage growth with insights on how to implement key performance indicators that drive sustainable financial results. Sessions in Financial Growth Track: 

• Measure Your Financial Results with the Right Metrics – Financial Boot Camp (Two Part Series)
• Drones and Robots – The Future of Security?
• Improve Customer Retention by Understanding Attrition

New Markets

Expanding into new markets can be an effective way to grow your business. Having a disciplined approach will help you identify complimentary markets and innovative product and service offerings. Learn how to assess each growth opportunity more accurately and develop a viable go-to-market strategy. Sessions in New Markets Track: 

• SMBs – Expanding Opportunities with New Services 
• Top 5 Factors Before Entering the Multifamily Market 
• Supercharge Residential Sales with Innovative Products and Services

Increased Sales

Investing in your sales team has a meaningful and positive impact on your sales results. Learn how to coach the sales team for better results and identify the products and services that grow your revenues and RMR. Sessions in Increased Sales Track:

• Powerful Hacks to Grow Your Recurring Revenue 
• Best Practices for Promoting Your Company Via Social Media 
• Fire Alarms – New Codes, Services and Technology that drive RMR

The Business of Monitoring

Delivering quality security and life safety monitoring services to end-users, including cloud-based lifestyle enhancements, is mission critical 24/7. Discover best-of-breed operator training, state-of-the-art technology infrastructure, and vital monitoring processes and procedures for next-gen central stations. Learn from seasoned professionals who share best practices to maximize your 24/7 monitoring operation effectively and profitably. Sessions in The Business of Monitoring Track: 

• Monitoring Center Benchmarking: Track. Measure. Manage. 
• New Monitoring Trends and Practices That Reduce False Alarm Dispatches 
• Monitoring Innovation in Action

The Future is Now

Examine the future of our industry through emerging trends, new products, technologies, and services that will excite your customers. Discover what and who are reshaping our industry, explore exit or succession strategies, and create a vision of what’s next for you and your company. Sessions in The Future is Now Track: 

• Industry Introspective – Challenges, Trends and Opportunities 
• Rise of the Machine – When and How to Leverage Artificial Intelligence 

Executive Leadership

Today’s company leaders are facing unprecedented challenges. Workforce shortages, supply chain delays, technology platforms rapidly being upgraded, and consumer demands ever changing. ESX has teamed up with Executive Education at the Southern Methodist University (SMU) Cox School of Business to develop 4 hours of executive leadership education that will provide breakthrough insights and advanced skills on change leadership and people management – two of the toughest areas for integrator companies. The instructors who will deliver the learning experiences are proven experts and thought leaders. They’re top practitioners with years of experience solving tough business problems for leading corporations nationwide. And they’re passionate educators—dynamic, committed mentors whose enthusiasm is contagious. Workshops in the Executive Leadership Track: 

• Leading Change that Works 
• Hiring, Engaging, and Retaining Your Best Talent  

“We’re excited to bring our community together this June for best practice and idea sharing, anchored by a stellar education session lineup,” said George De Marco, chairman, ESX.

“Now more than ever, it is imperative for security professionals to take advantage of opportunities that drive growth and profitability, improve the customer experience, and prepare them for the future.” he continues.

“ESX is focused on providing the best possible program for our community and we’re confident that they’ll walk away energized and inspired ready to take on today’s changing competitive landscape.”

The complete listing of educational programming, including NEW leadership sessions, can be found here.

ESX Passes range from free options to $699 for the new ESX Executive Pass. Prices will increase April 1. Visit ESXweb.com/register for more.

With changing social, economic and business environments, security professionals need to adapt to new market strategies and offerings. Identifying the right next gen products and services can have a positive impact on the customer pipeline, improve the customer experience and keep customers loyal. 

New Markets: SMB’s – Expanding Opportunities with New Services 

As the world experiences a digital transformation and a renewed reliance on broadband services, small to medium businesses (SMBs) are poised to invest in their physical security and network system. According to Parks Associates, 21% of SMBs report a need for products and monitoring services that deliver safety and security for their employees and business. Currently, one-half of SMBs have a security system, with 45% of those systems being professionally monitored. During the session, “New Markets: Expanding Opportunities with New Services” members from Parks Associates will share insights and address the following: 

• How remote work arrangements have exposed new security vulnerabilities and increased the need for cyber security solutions 
• How security providers can benefit from offering value-added services that include on site security and monitoring services, advanced threat detection, wi-fi and network configuration, and other services 

Industry Introspective – Challenges, Trends and Opportunities  

The pandemic has changed the world, and its effects will be lasting in the near future. Regardless of the industry, change happened, touching each one in different ways. The security industry wasn’t immune to the effects of Covid. However, many dealers and integrators flourished during the pandemic, as they adapted to change and were aggressive in their approach to tackling the new normal. Profound and practical applications are being applied to innovative technology and services, especially as artificial intelligence and machine learning gain more acceptance. The delivery of security services is being affected by remote working models, cost of higher wages, reinvention of supply-chains, new applications of technology, and critical protection of information security. During the session, “Industry Introspective – Challenges, Trends and Opportunities” Micheal Barnes of Barnes Associates, Inc. will cover: 

• What pandemic-induced consumer and business behaviors are not going away  
• The industry trends and challenges that will affect your business and how to prepare for tomorrow – strategically, operationally, and financially. 
• The business attributes and metrics buyers will be focused on     
• How to capitalize on next-gen products and services and monetize them 
• What you must do to stay relevant and on top of your game 

“These sessions will provide a glimpse at how security professionals are navigating today’s business environment and protecting their customers against evolving threats,” says ESX Chairman George DeMarco.

“It is vital for ESX to provide a platform for security professionals to come together to exchange ideas and best practices. It’s how our industry gets stronger — by learning from one another. That’s why ESX 2022 is #SecurityConnected.” he continues.

The complete listing of educational programming, including NEW leadership sessions, can be found here.

ESX Passes range from free options to $699 for the new ESX Executive Pass. Prices will increase April 1. Visit ESXweb.com/register for more.

At some point this year, the status of the pandemic should change to endemic stage, unless a new variant creates a major health concern. If we enter the endemic stage, Covid-19 will then become a part of our daily lives, like the seasonal flu, requiring us to get used to it. As dealers and integrators adjust to the new normal, I believe that the remainder of this year will bring less of a worry about Covid-19 and give way to other concerns, such as changing consumer expectations, access to products, labor shortages, and product and wage inflation. All organizations will modify their travel, health, and safety protocols, based on their risk tolerance of the pandemic’s status.  

Changes in the Workforce Landscape 

In addition, hybrid remote work options will remain a highly desirable choice for employees, as they have become accustomed to remote work alternatives. The place of work is rapidly changing, and many employees believe that the time is right to seek other opportunities that may provide higher wages, better work-life balance, improved career path, a more aligned business or life purpose, or the ability to relocate to another community. All of this is having a profound impact on every employer in the electronic security industry, as they realign their organizations to accommodate expectations of the current and future workforce.      

Expand Product & Service Offerings 

End users want the products and services we offer, which was proved last year. Many dealers and integrators experienced an exceptional growth year, especially those that had a higher risk tolerance in their growth strategies. I believe this year will require a similar risk tolerance, as other business risks come up front and center to replace the challenges from the pandemic. I anticipate this year will bring significant opportunities for organizations that are prepared to tackle the post-pandemic economy. However, being a one-dimensional burglar alarm provider may limit your growth potential, rather than offering complementary products and services that drive subscription fees (RMR) and higher profits.  

End-Users Are Adopting More Technology

The pandemic has caused an emerging change that will accelerate adoption of the digital life by people. With that, there is a broad appeal of remote processes that embrace tele-everything and smart products and apps for living and working in the digital world, greatly changing work structures and family life. This emerging change offers security professionals the ability to reinforce themselves as the trusted source and technology expert, helping end-users get and experience what really matters to them. End users want technology to easily control and manage their homes and businesses, and to keep them connected remotely, giving them a greater sense of safety, security, comfort, and convenience, including situational awareness that brings understanding or anticipation of needs. Until the integration of connected devices truly becomes ubiquitous and seamless, end-users will need dealers and integrators to manage the installation process and customer service support.  

A dealer or integrator that strives to understand the changing needs and expectations of its existing and future customers will be able to fine-tune their brand messaging and promise, select the right product and service offerings, and help differentiate themselves from the competition. 

Security professionals who are interested in taking a deeper dive into the industry’s trends should register and attend ESX 2022 in Fort Worth, TX, June 14-17. Over the course of 3.5 days attendees will experience industry-leading education programs, best practices, and more. It is where the industry gathers, and you don’t want to miss it.

The supply chain encompasses everything from sourcing the raw materials to the eventual product delivery. Many of the basic building-block chips go into the products the industry sells to consumers, businesses, governmental agencies, etc. Unfortunately, the chip shortage will likely get worse before it gets better, with some experts saying that it may not return to normal until 2023.

Dealers and integrators are integral in the delivery process, installing products and providing ongoing customer support services. As a result, if there is a supply chain bottleneck at any point, such as labor and semiconductor shortages, transportation delays, or price inflation, this disruption can cause growth challenges for dealers and integrators in 2022. However, I believe these challenges will be lessened in the second half of 2022, if these key risk factors are addressed:

1. Materials: The demand for products that use computer chips will continue to outstrip the supply side until semiconductor manufacturers resolve it and move to a more resilient supply chain process.
2. Labor shortages: This is requiring dealers, integrators, and monitoring centers to rethink compensation packages, professional development, and employee retention programs for new and existing workers.
3. Consumer Demand: Labor and semiconductor shortages are causing cost inflation, which needs to be passed on to end-users. As a result, end-users may elect to delay or postpone projects if costs continue to skyrocket, potentially muting growth.

As supply chain disruption begins to subside, I believe the growth outlook for the electronic security industry will become more normalized as we enter a post-pandemic economy. In this next phase, consumer and business behaviors towards technology are changing along with their expectations, including privacy and information security. This will impact those companies unprepared for the next phase.

Security professionals who are interested in taking a deeper dive into the industry’s trends should register and attend ESX 2022 in Fort Worth, TX, June 14-17. Over the course of 3.5 days attendees will experience industry-leading education programs, best practices, and more. It is where the industry gathers, and you don’t want to miss it.

Session Highlight: Powerful Ways to Grow RMR by Exploring New Opportunities 

As the COVID-19 pandemic overtook the nation, nonessential work was put on hold, and customers became anxious about budgets, many security installers and integrators saw their businesses suffer. But those whose customers were contracted for subscription-based services weren’t as concerned – their Recurring Monthly Revenue (RMR) helped them weather the COVID storm.  

In an ESX Virtual Education Session, Preventia Owner Aaron Whitaker and the president of LOUD Security Systems, John Loud, shared their experiences with RMR business models and how to get employees and customers on board.   

Even if you can’t provide these services yourself, Loud said, you can partner with companies that do. Manage the billing and relationships and sell it to your customers as a customer service add-on. 

Opportunities for RMR:

• Cloud access
• Water detection and shutoff 
• Monitored smoke detector
• Life safety facility mangement
• Sprinkler systems / hood systems
• Guard dispatch
• Ankle bracelet monitoring
• Environmental monitoring (gas, water)
• Bank panic buttons
• Cybersecurity

Creating a Solution that Leads to RMR
“The long-term gain is that RMR that creates equity and stability in the company,” Whitaker said. As such, Preventia has designed their entire business around RMR. “We first look for what problem we are solving and see how we can make the customer happy while creating a solution that leads to RMR,” Whitaker explained. This is not only for the benefit of the business, but for the benefit of the customer as well, since security customers are increasingly asking for integrations. Whether it be smart home and video solutions, cloud video, or cloud access control, customers place huge value on being able to manage everything in one app. Subscription-based services are a draw for them. Because there are free options on the market for the aforementioned solutions, “Integrators have to drive value around these solutions and charge customers for it monthly,” Whitaker noted. 

Engaging Your Advocates 

On the commercial side, your biggest advocates for a security subscription are likely to be in the IT department. “We engage with IT as soon as possible,” Whitaker said. “IT values time: if it saves them time, they will pay money for it. Get on the IT budget.” 

Get comfortable having conversations with IT and “Be prepared to go beyond security,” Whitaker advised. Instead of just talking about the usual benefits of keeping a business secure, bring up the value of a cloud-based, integrated system. Owners and managers can make sure employees are getting to work on time and that things are running smoothly. One restaurant owner Whitaker cited loved that he could log in remotely to make sure the restaurant looked great and check that orders were going out in a timely manner. 

Getting Your Team on Board 

When you’re simply installing equipment, you’re making one sale. But when you’re adding security as a service, you’re doubling that sale. Take a look at how you’re compensating your sales team, Whitaker recommended. “Any good sales rep will work to maximize the compensation plan they have. Are you rewarding the equipment and installation more than the RMR?” Preventia has shifted their compensation plans so sales reps get more money for selling RMR. Loud added, “Think of how you can turn your commercial sales team into an opex rather than a capex.” 

When you migrate to an RMR model, management and leadership need to be built out accordingly to support the growth. “If you’re asking someone to pay you monthly, they’re expecting service on the backend,” Whitaker said.  

Loud commented on how RMR has changed his hiring and training processes. “Everything we look at in the hiring process is about customer care. I realized early on that I need folks who are customer-focused first, then we can easily train them how to install.” 

Reducing Attrition 

RMR reduces customer attrition because your relationship become more valuable to them and also stickier – it’s harder for customers to disengage if you’re providing multiple services. Loud, all of whose residential clients are on an RMR model, encouraged companies to start with their existing customers. “Go back to your base,” he said. “They trust, know, and like you, and they are paying you already.” He also suggested that companies that are providing subscriptions increase their rates regularly, and that they consider getting into access control if they aren’t there already, since it has “a lot of opportunity for RMR.”  

Though selling on an RMR model may feel unfamiliar at first, looking for opportunities to add subscription services benefits your customers as well as your business. They will enjoy the convenience of having a one-stop-shop for their security and security-related needs, as well as only having to manage one monthly bill for those services. Your business will become financially stronger in the process, helping you more effectively manage any uncertainty in the years to come.