Customers for Electronic Security Equipment in the
USA
There is no point in having a great product, detailed
plan, outstanding intelligence on your competitors or
the finest advertising campaign if it is not rooted
in an understanding of customers.
There are many, many ways to classify, or segment,
customers into homogenous groups. Segmentation allows
a common approach to be taken to one or more of the
challenges of making and selling a product. In fact,
it is often necessary to create new methods of
segmentation for new products. The common methods of
segmenting customers - size, longevity or location
are not necessarily differentiators in how a company
will react to a new product.
It can be just as valid to start with the technology
adoption model and classify targets according to when
they are likely to be interested in your product.
What you are looking for is groups of customers that
have a broadly consistent set of requirements
relative to your product.
For established products the following segmentation
is usually a good starting point and we often use it
when working with new clients. It classifies alarm
dealers into groupings characterized by how they do
business, the types of products they use, how they
source them and their approach to new products. For
companies who have not used segmentation before, it
can be salutory to consider how much the message
about a product needs to change from one segment to
another. Yet in many cases, companies will be using
the same sales material and advertising across the
entire industry.
National Installing Companies
Companies who operate across the entire US. These are
major corporations and have many of the
characteristics you would expect. For the most part
they are publicly traded companies.. It is a small
group, and the best way to define them is probably to
name them: ADT (part of Tyco), Honeywell, Ameritech
(Securitylink, National Guardian), Protection One,
Brinks.
Regional installing companies
Major companies whose activities span more than one
state. They differ from the National companies in one
important way that affects suppliers. They have not
usually developed the bureaucratic structure that
exists in the national companies. They may still have
just a small executive team, the same team, in many
cases that built the business. Not all have ambitions
to be national, though all are active in
acquisitions. The largest players are very close to
national in scope and typically growing rapidly by
acquisition. They are also disappearing at a rapid
rate as they are being acquired by national
companies.
Local installing companies
Companies with one or two offices (in relatively
close proximity), ranging from five to one hundred
employees. They differ from the next category in that
they are professional, have premises, are licensed
and insured and may be creditworthy.
Other alarm dealers
Small, one or two man companies, buying all their
equipment through distribution, usually with a credit
card. They do one or two systems per week, almost all
residential. While a few will graduate to
professional status and survive, most come and go.
Today, the vast majority sells their accounts to
companies like Protection One, rather than build
recurring revenue. This group is often referred to as
trunk slammers - supposedly the closing of the trunk
of the vehicle after the system is installed
represents the end of their interest in the customer.
Specialist alarm dealers
This category covers a relatively small number of
companies that focus on a niche in the end user
market. While national specialists all focus on mass
market residential, this group includes companies
that focus on various aspects of the commercial
market as well.
ESD’s and System Integrators
Engineered System Distributor is a term used
primarily in the specified fire market in the US.
Here it is used along with "system integrator" to
apply to all the dealers who focus on the commercial,
specified market, whether fire, access or intrusion.
While not every job is specified, in cases where it
is not, it is usually described as "negotiated". Only
very capable companies will be selected for the
negotiation, usually by a specifier of some kind. It
is only companies that have previously won bids for
the same kind of system that are invited to
participate.
This market is often for installations in new
construction, for customers that have a security
director and/or have used a design-consulting firm to
create a specification for the security system.
Dealers in this segment look and behave quite
differently from the average alarm company. They have
professionally qualified design staff, do
architectural drawings and are accustomed to working
with architects and other professionals.
Commercial End users
Naturally, end users often buy their security
equipment and services from one of the above type of
intermediaries. However, corporations, especially
large ones, will sometimes deal directly with
equipment manufacturers. Some of these companies have
all the capabilities of large alarm dealers,
including well trained installers and their own
central stations.
Residential end users
A category ignored by many of the manufacturers in
the industry are homeowners who wish to install their
own security equipment. In the past, such customers
were limited in what they could buy to that which is
available in Radio Shack, Home Depot and other
retailers. Today, they can buy professional alarm
equipment over the internet and growing numbers are
doing so.
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