Multimarket Surveillance Sales Drive Double-Digit Growth
By Matt Pillar, editor-in-chief, Integrated Solutions For Retailers
This LA-based security solutions reseller doesn’t discriminate by vertical, and it’s consistently achieving 20 percent annual sales growth.
A recently published IHS Technology paper titled Trends for 2014 — Video Surveillance Trends for the Year Ahead posits that the worldwide market for video surveillance sales is expected to climb 12 percent this year. According to Pat Baca, vice president at security solutions integrator West Beach Systems, the Los Angeles market proves an exception to that prediction. In fact, his company has been consistently beating that forecast for the past two years. While access control and alarm systems supplement the company’s revenue, Baca says surveillance has been the hot ticket for the past several years.
New Tech Spurs Rapid Growth; Education Market Heats Up
West Beach Systems got its start as a residential ADT alarm reseller 21 years ago. After 10 years in business, the company broke into the commercial alarm and access control space. That move exposed West Beach Systems to the fast-growing surveillance market, which now drives nearly 70 percent of the company’s revenue. It also opened the company up to new markets. “Surveillance is hot in all the markets we serve, primarily because of the risk mitigation it affords our customers,” says Baca. “But if I had to put my finger on the best opportunity for sales right now, it would have to be education.”
In the wake of the school violence that’s been making national headlines in recent years, administrators at all levels of education — from K-12 to post-secondary institutions — have stepped up their security mandates. In fact, spending on school security systems is eclipsing that of all other markets. IHS Technology reported in its Vertical Insights: Video Surveillance & Security in Education report that the market for school security system integration was expected to rise by more than 80 percent through 2017. Asked if recent high-profile school crime is contributing to that spike in adoption, Baca is doubtless. “The fear of a Sandy Hook-like tragedy is absolutely driving security sales in schools to some degree,” he says. When disaster strikes in a school, response time is everything. As such, some schools are seeking more sophisticated solutions that expand the forensic function of surveillance tools to include detection and mitigation of risks or threats as they happen. “We’ve handled several implementations that feature some pretty complex security solutions integration and analytics,” says Baca. “When surveillance and access control are integrated, we can enable a camera to spin and zoom in on a door when it opens. With analytics, we can set off alarms or send email or text-based alerts when a camera catches someone entering a predetermined space, whether there’s a door catch involved or not,” he says.
West Beach Systems’ access control and surveillance integration expertise is clutch in school environments, where identifying potential threats and restricting access are important priorities. But catastrophic school tragedies are rare, and so too, says Baca, are customers with sufficient resources to actively monitor video in real time. To effectively sell surveillance, even in schools, he says it’s imperative to convey the value beyond catching bad actors on film, in real time, before they commit harm. “We have to make sure our customers, and theirs, are comfortable with video,” says Baca. “They need to understand that it’s not a Big Brother tool; that would require constant monitoring of the surveillance footage. In this world, very few customers have the time or the money to do that.” More often, surveillance is about revisiting footage to mitigate the risk of liability or prove a point. It’s to help and protect through forensics. Once that’s understood, says Baca, the “Big Brother” fears dissipate.
“In education, as in most verticals we serve, surveillance is about risk mitigation. There are concerns around teacher and student interaction liability, as well as student-to-student interaction liability, for instance. With these concerns, video is seen as a safeguard,” he says. Protection from erroneous slip-and-fall claims and gymnasium and athletic injury claims are also keys to the school surveillance value proposition.
Surveillance: A Lucrative, Yet Complex Sale
“Surveillance solutions encompass a whole ecosystem of technology, which makes them an extensive sale,” says Baca. “In addition to the cameras, that ecosystem includes NVRs (networked video recorders), servers, switches, cabling, software, and PCs that serve as viewing stations,” he says. The network and peripheral requirements of an extensive camera system add up to incremental sales opportunities for West Beach Systems. “Our average surveillance install is about 50 cameras, so the infrastructure necessary to support the installation is complex,” says Baca. “The technology is always changing, and integration of cameras to other systems, such as POS and access control, is very challenging.” Mastery of that complexity is what sets the company apart from resellers who treat surveillance as little more than a peripheral sale. Baca and his sales and engineering staffs are constantly training on new technologies and certifying on their vendor partners’ platforms. The business has been around since the CCTV days of old, requiring continuing education to be a priority. “We have dozens of vendor certifications on the wall, and we continually participate in training opportunities at ISC [International Security Conference] events,” says Baca.
Networking, he says, has also contributed to the company’s success. In the context of the IT definition of networking, Baca says his sales people and engineers have become quasi IT guys since the surveillance space began going digital and moving to IP. “That’s given us a competitive advantage,” says Baca. “When you understand bandwidth, LANs, storage requirements, the hardware specifications necessary to make a solution work, and the way digits move through a network, it sets you apart.” But Baca says the social definition of networking is also extremely important to business growth. “We do a lot of networking with third parties, so that when we encounter specific installation needs, we have resources to call on, and also so that we’re made aware of sales opportunities early on.” Telecom and LAN infrastructure providers, for instance, bring West Beach Systems business, and vice versa. Baca also stays tight with real estate and construction companies to ensure West Beach Systems is in the running for new build business in the LA area.
Don’t Charge For Your Differentiator?
In a value-added reseller market plagued for years by declining hardware margins, many resellers are devising strategies to directly monetize their expertise, rather than the boxes they sell. But Baca says your expertise should be factored into your rates and then demonstrated as your differentiator. For example, West Beach Systems takes an interesting approach to sales prospect situations that require a lot of up-front intelligence. “Prospects will frequently ask us to design a security system for their facility or facilities as part of their evaluation of our solution and capabilities,” says Baca. That request takes a lot of work, often involving CAD (computer-aided drawing) files of facility plans and exhaustive rationale for camera selection by specification and location. “Good system designers understand the relationship between camera placement and facility coverage. Great system designers understand the nuances of lighting on camera performance in relation to placement, bandwidth issues and limitations, the best opportunities for access control or POS integration benefits, and so on,” explains Baca. Because that kind of expertise costs money, many resellers will oblige the request, but charge a hefty consultation fee regardless if they win the deal. West Beach Systems doesn’t do that. “We state up front that if we win the deal, our expertise is free. Our intelligence is the deal sealer, and we don’t charge for that. But if we don’t win the business, the customer will be billed for the intellectual capital we invested in their design,” says Baca.
West Beach Systems also mitigates customer attrition via service and maintenance agreements. “Without service and maintenance agreements, you’re only as good as your last deal,” says Baca. “If a customer buys a system from us without a maintenance agreement, anyone can service that system, and that puts us in jeopardy of losing that customer,” he says. To ensure that doesn’t happen, West Beach Systems creates incentives, such as equipment discounts, free quarterly cleanings, priority service calls, and 24-hour response times to lock customers into annual service and maintenance agreements at a premium cost. More than a quarter of the company’s customers participate. “We’ve been offering our maintenance agreements for four years now, and it’s proving that giving a little up front pays dividends in the long run by creating customer loyalty.”
West Beach Systems serves as living testimony to the stats presented by IHS. The surveillance market is hot — especially in education — and that spells great opportunity for those resellers with the tech chops to meet the market’s needs.