With the explosion of residential DIY security solutions, numerous alarm dealers are looking elsewhere for opportunities grow. Commercial fire alarm system sales are a natural migration path with few barriers to entry.
First, let’s define some industry terminology. “Alarm Dealer” is used to describe a company that sells, installs and monitors security systems. They are referred to as “dealers” because the product they offer is typically brand specific. For example, you sell brand X, you’re a brand X dealer; brand Y, a brand Y dealer. Brand specificity is a good strategy as it allows your staff to learn a single product platform. The longer you employ them the more proficient they become with the brand you represent. The only negative to a “dealership” is your inability to control certain aspect of consumer brand awareness. In other words, when a big-name brand has a product recall or performance issue it can have a negative impact on your company. Alarm dealers have historically focused on residential system sales and the recurring revenue associated with monitoring those systems.
Many alarm dealers are hesitant to engage in fire alarm systems sales due to an elevated liability concern and higher insurance costs. This has to be weighed against the opportunities presented by the mandates.
In America, each state, via the legislative process, adopts building codes which are the source of our mandates. To be sure, you cannot construct a new building, renovate and old building or change an occupancy use group without taking into consideration the fire alarm system. That’s the good news. When you sell and service fire alarm systems this ensures there is always business opportunities. When the economy is good, new construction abounds and new system sales opportunities arise. When the economy is bad, new construction slows so building owners renovate existing properties, which again present us with opportunities. In either case, once a fire alarm system is installed, inspection and testing of that system must occur which again presents us with opportunities. Many a small business was built on the recurring revenue of inspection and testing fire alarm systems.
Engineered Systems Distributor (ESD) is the term typically used to describe companies that sell and service fire alarm systems. The larger, legacy ESD’s are also brand specific and sell proprietary equipment. Without mentioning any names, you know who they are. New entrants to this channel may find it difficult to secure a brand but it’s not necessary in order to compete. Plenty of reputable, non-proprietary equipment is available through over-the-counter distribution outlets.
ESD’s tend to focus on commercial system sales as opposed to the alarm dealer whose focus is primarily residential system sales. Your success as an engineered systems distributor will be dependent upon your ability to balance time and effort between three very different customers with different needs and expectations:
· Electrical Contractors
· Architect and Engineering firms
End-users. Even though you may not be selling them a fire alarm system outright, they are the most important of the three customers identified herein. As an ESD the emphasis should switch from proprietary product branding to creating your own company brand based on the capabilities and solutions you provide. Calling on end-users is how this is accomplished.
The relationships you develop here can often generate opportunities for the other two customer categories. This in turn will elevate your status in their eyes and help generate more sales opportunities for you. Think fortune 500 companies, National Accounts and school districts; three types of end-users your sales team should diligently pursue. In the markets where you trade, there are enough of these three examples to keep your sales staff busy all year cultivating relationships.
What do I mean by cultivating relationships? Establishing key contacts: facility managers, security directors, IT managers and OSHA compliance officers. The contacts you develop here will have need of other products and services you offer such as security, surveillance, and access control. These systems you are able to sell them direct. Do not neglect the commercial end-users in your market. Some companies refer to this as business development.
Electrical Contractors are the second most important customer to pursue. In commercial construction markets most fire alarm systems are sold to and installed by electrical contractors. This arrangement has become known as “parts and smarts” whereby you sell equipment and supervision of the installation. Your sell price to the electrical contractor should always include the following:
· Equipment costs with an acceptable markup
· Wiring diagrams and other construction documents like submittals
· Termination of the fire alarm control Unit
· System testing and commissioning
You will discover that electrical contractors can run conduit, mount boxes and pull wire far more efficiently and economically than your company can. You provide guidance in the form of “fire alarm plans and wiring diagrams” and the electrical contractor will mount and install your equipment. Once everything is in place, your company is responsible for termination of the control unit, complete system testing and scheduling system commissioning with the local Authority Having Jurisdiction.
Upon completion of acceptance testing, ongoing inspection and testing is yours to lose. You should have already presented the owner with an inspection and testing agreement that also includes monitoring as this too is part of the “mandates” we spoke of earlier. The ease by which you are able to pass a final inspection may determine how much future business you conduct with a particular electrical contractor.
Let’s not forget, because you focused on cultivating relationships with end-users, you may very well have opportunity to refer business to key electrical contractors and once again elevate your status in their eyes. In the end, building sales with electrical contractors may well be impacted by the effort you put forth with the final customer in our list, architects and engineers.
Architects and Engineers are not your traditional customers in that they rarely buy anything from you. Of course, A&E firms might be a security or monitoring account for your company but we’re not talking about those. The strength of A&E customers is what they know about upcoming projects in your market and which products they specify. Part of your job is getting the products you sell and support you offer written into project specifications. This is accomplished by calling on A&E firms.
I will admit this is a difficult task as many individuals are intimidated by degreed professionals. To be clear, the architect is not where you want to invest your time. Find out if the architects you call on have an in-house engineering department. If they do, you want to determine who is head of the electrical department. All correspondence with engineering firms must begin with head of the electrical department.
Engineers are detailed oriented and like to follow the rules. They tend to distrust, and sometimes even dislike sales people so it is important for you to be referred to them by a department head. Engineers are more comfortable with data, numbers, and observable facts than they are with people. Think like a specialist.
Avoid having a “commodity” mindset, which devalues your product and lowers profits. Establish yourself as an expert with low-voltage systems and in particular with the rapidly changing options for off-premises signal transmission to remote supervising stations. Why? Because all required commercial fire alarm systems must be connected to a supervising station. Remember those wonderful mandates?
Your best approach to this customer is stick with the facts. Establish and prove the products you represent are “industry standards”. In cultivating relationships with engineers, focus on helping them do their job. Offer to write project specifications or prepare system layouts. The engineer needs to incorporate a fire alarm system into his/her electrical design that is code compliant, and does what it is supposed to do without causing problems or delays that may adversely affect the engineer’s reputation.
So, there you have it. Sounds easy right? I’m kidding. If it were, everyone would be doing it.
In summary, why do we like selling fire alarm systems? Because of the mandates in place that ensure opportunities are present even during the most difficult of economic times. Are there hurdles to overcome? Sure, there usually are in all worth-while business endeavors. Most States have licensing requirements for installation and service of fire alarm systems. Some States even require NICET certification for individuals installing and testing fire alarm systems. This is a good thing as it will minimize your competition and raise the quality of all fire alarm system installations.
Besides, if you are reading this article you have already discovered that National Training Center is the most popular, most comprehensive training resource available for NICET testing preparation and fire alarm system design.
Gene LaValle is an independent consultant and trainer to the fire alarm industry. He can be reached by email at firstname.lastname@example.org