Upselling, a traditional business technique, has also found its way into the security industry. Through this, the markets have become much more prevalent, especially as the economy and technology continue to advance and evolve. In fact, it's become an important part of day-to-day operations, and is far more common than people realize.
Upselling, a traditional business technique, has also found its way into the security industry. Through this, the markets have become much more prevalent, especially as the economy and technology continue to advance and evolve. In fact, it's become an important part of day-to-day operations, and is far more common than people realize.
In the past, security has always had a very straightforward approach to business. Manufacturers create and produce for distributors who in turn move down the chain to systems integrators who than create the solutions for end users. It was all about box moving and quantity. Nowadays, with the induction of education seminars, value-added solutions, aftersales support, and market trends, channel players are moving away from traditional box moving to a total solutions package. From a business standpoint, the shift in the industry to a more total solutions orientated market is a sign of revitalization. Because of recent infrastructure developments, integration, and technology advances, benefits for both sides of the sale are clear. In part, because of a renewed commitment to more direct customer relations, as well as more aftersales support, opportunities for upselling have become more and more prevalent.
“Customers are much more in tune with how they can best leverage technology to solve specific application challenges and build more efficiency in their daily operations. They no longer just tell a systems integrator ‘I need video surveillance' and leave it up to the SI to install a system of their preference,” said Matt Powers, VP of Global Technology Marketing at Anixter.
An equally crucial result from this has been in establishing more direct channels all the way down the supply chain. By maintaining closer relations with users, integrators, and distributors alike, it has created more opportunities to fuel growth in the industry. As Rüstü Arseven, GM for Tesan further emphasized, “Contact directly to the customer will always be helpful in upsells. It shows how to find potential customers and creates interest in our brands. In educating the customer about the advantages of total solutions, it extends the aspects of anticipation and information found on the partnership level.”
Tying total solutions to upsells
Because a total solutions package encompasses a new host of opportunities up and down the supply chain, the chances of upselling become higher. Of importance to highlight include education for the suppliers, providers, and users. It stands without saying that a better educated industry translates to better results for all. According to Balthazar Zuniga, Director of TVCen Linea, the biggest obstacle being overcome in the industry right now is knowledge. “People are afraid of new technology, new knowledge. Why change something that isn't broken? You have to change the culture, and we have to concentrate on training, changing the culture internally.” Other key factors to point out include post sales service and more offerings of recurring monthly revenue (RMR) solutions.
The need for education
Education - and just the education of end users and seminars - is vital to any industry that wishes to expand out and create diversity. A better grasp of the industry translates to better prospects for all. According to Powers, education has to go all the way down the supply chain. “SIs have to be agile and willing to continually change, and the faster they can adopt technology, the better they will become at upselling their customers and differentiating their organization,” he said. Arseven brought it in line with total solutions, saying, “Giving training, making demonstrations, and support to our partners and end users makes up the total package of total solutions.” Zuniga summarized the end result, explaining, “We have to transmit this new culture across our distribution channel. By educating people on how to get projects, they can face any solution or problem. Teach them the basic strategies, how to make your business grow and improve, offering coaching and training, on what the industry is comprised of.” In fact, Zuniga mentioned an important factor in that many new players entering the industry lack business knowledge and business sense, whereas education in this sector drastically helps them to gain a better grasp in the markets. From a business standpoint, the benefits are clear. When the suppliers and distributors are better educated, the industry demands and needs are more clear-cut. Because the industry is constantly shifting and moving, the need to constantly be caught up with today's trends is important. What may be popular today may fade in popularity tomorrow. Educating the sectors on the newest products, newest business offerings, and newest, most attractive solutions is key so that they can then introduce it to their users and buyers, creating a clean opportunity for upselling. The users will benefit as well, as they may gain access to better services and solutions - a win-win for both sides.
Aftersales support and services
One of the business stigmas that unfortunately exists across all kinds of industries, including security, is the belief that purchasing warranties or extended service packages is a waste of money. The truth is, much of the services and post-sales packages being offered today are actually incredibly beneficial for the purchaser. With all kinds of service providers nowadays offering 10 to 20 years, or even lifetime support for their users, the simple frame of offering peace-of-mind is a definite plus. In security, upselling on these packages is a boon on both sides. Aftersales support now even consists of everything from training seminars, to product and solutions maintenance, and to service upgrades and support. Avi Bareket, CEO of Anteco, brought it together, mentioning, “Customers really believe in service. In the IP age, service is more important than ever. The main strength lies in support and working hand-in-hand with our customers.” Tied in with the education factor, Zuniga explained that education means more technical training, which directly correlates into better technical services and warranty or product support. At its core, he further mentioned that getting and maintaining the customer base is all about aftersales, and you have to work directly with customers through both service and education.
The art of RMR
Honing in on other forms of upselling occurring in the industry, another point of fact lies in RMR. In fact, one of the premiere security solutions these days that is gaining enormous popularity is the cloud. As Zuniga put it, “The cloud is important for the future. It offers opportunities for anything.
Many suppliers are already offering the cloud. Everyone can work on it.” Because cloud works as a service, providers are able to create a flow of monthly revenue. By offering a host of cloud solutions, the door is open for upsellers hoping to net a greater profit ¬ albeit over time. By operating on a sort of rental agreement, solutions providers can offer the cloud to many users wishing to partake, and at little to no setup cost or time; especially when compared to more traditional onsite systems.
Other forms of RMR include operating on credit for customers and shipping services. By offering monthly or annual payment plans, it is an opportunity for providers and distributors to charge things like interest or fees. In fact, Zuniga mentioned that credit forms a large part of their revenue, as much as seven to eight percent in fact.
Product advancement and Technology
Product development remains just as important when it comes to upselling. By enticing customers with new and nifty products, it creates room for better opportunities to upsell. Attractive technologies being utilized through solutions like the cloud now include biometrics, video analytics, and smart city solutions. “As we know, security concerns grow everyday. Planning sales strategies should be done correctly, and it's important to highlight new technologies such as 4K, 60 fps and above surveillance cameras, cloud technologies, etc. Users and integrators alike are looking for smart solutions, and becoming more common day by day. The adaption of new technologies is easy for integrators and users alike. This facilitates sales and increases profit margins,” said Arseven. Powers brought up another point, as he said, “Educating customers on open standards such as ONVIF and ways they can implement new features of their security devices is extremely important, as most features still go unused today.”
The move forward
Upselling is going up. On top of that, many new players are entering the market, and many wholesalers and distributors have sprouted up, because the market is growing exponentially. “The next one or two years will continue to experience good growth in the markets. However, in the next two to three years, many players will start to die off. It's vital that if you wish to keep doing business, you must provide added value. It's important to diversify yourself and make yourself stand out.” Comparing the situation to a 50 versus 50 soccer game, Zuniga mentioned that there just is not enough balls and not a big enough field to support everyone. “The market is too saturated,” he stated. In diversifying yourself from your competitors, it is important to note that for upselling, the need to offer something a little bit different from everyone else could be the difference between gaining a large project and losing one. This could include factors like better offerings of seminars or tradeshows, to superb extended services, and even onto value-added solutions tacked onto existing systems and products. Whatever the need, make yourself stand out.
Indeed, upselling is a valuable part of the business and will continue o see developments, especially as more new players and new suppliers enter the industry. It will be an interesting point to keep an eye on, as maybe through consolidation and further M&As, the market may continue to see advancement and evolvement. By furthering education prospects, technological advancement, and integration towards total solutions, the business strategy of upselling should continue to remain a part of the security industry. It is important to continue to spread industry knowledge and another important point ¬ keep prices at an attractive level.