If you're not offering verified alarms, are you missing the boat?

Thursday, October 8, 2009

WHITE BEAR LAKE, Minn. and CHARDON, Ohio—There could be a trend developing that may make your business worth more in the long run, give you more cash flow to function in the short run, provide a differentiator for your business by allowing you to provide more value for the end user, and improve relations with municipalities, PSAPs and first responders through reduced false alarms and needless response rolls. Does this trend sound too good to be true? According to some in the industry, the time has come to embrace verified alarms.

For example, RSI Video Technologies is now offering a solution called XL, an alarm panel that incorporates video and two-way voice over the cell network for about the same price to the dealer as a “blind” system. According to Keith Jentoft, president of RSI Video Technologies, security companies don’t have time to waste. “Are verified alarms now mainstream? Is that something the industry should pay attention to?” Jentoft asked. “If I’m not getting into verified alarms, in general, then I have a threat to my business.”

Stanley Convergent Security Solutions made a major investment last year in Sonitrol, a $275 million buy that came with Sonitrol’s trademark audio verification. This allows Stanley, said Tony Byerly, Stanley CSS president-North America, to offer its “Best Fit” strategy. “We present to the marketplace whatever’s the best fit for that customer, both by budget and by the solution to their problems,” he said. “Traditionally there’s the conventional digital alarm signal; Audio Impact is the Sonitrol solution; and then we also offer video monitoring.”

However, Stanley CSS’ stated strategy is to mainstream advanced Sonitrol audio verification technology and services across North America through its corporate locations and franchise partners. Stanley is betting heavily that verified alarms will be seen as more valuable than the traditional alarm system.

Jentoft said traditional burg companies must differentiate themselves in order to survive. One way of differentiating is to take advantage of decreasing price points of two-way voice and video to offer affordable, verified solutions. “The price points now are what are making verified alarms, in general, mainstream,” Jentoft said. “Instead of just saying audio-verified or video-verified, which are two technology choices—one of which I obviously favor—the concept is that a price-competitive verified alarm, either audio or video, is a much more compelling sale than a non-verified alarm at the same price.”

When Lafayette, La.-based Acadian Monitoring on Oct. 5 announced it had partnered with RSI to include video verification of alarm events, it emphasized the need for verified alarms. “At Acadian, we are always looking to stay in line with the latest security technology and adding video verification certainly fits with our strategy,” said Acadian director of operations Kenny Savoie in the release. “Video verification is already required in several major U.S. markets and throughout most of Europe, so we believe that it is only a matter of time before it becomes a more standard practice through the industry and we want to be prepared to meet that need.”

Jentoft said improvements in economy of design and a ramp up in manufacturing have led to more affordable pricing for the dealer. “We package the keypad and the panel together, so there’s economy there. We strung several boards down into one,” Jentoft said. “We’ve had 80 percent of our engineering team working for two and a half years to bring the price down.”

Sandy Jones, president of Sandra Jones and Company, a consulting firm focused on assisting suppliers, new entrants and investors to optimize their investment and potential in security industry, agreed the rise of affordable video verified solutions would change the industry, noting that “with equipment costs being the same for a verified video verses a traditional burg system, smart dealers are able to give their customers an upgraded system and at the same time generate additional profits for their own business. We also believe when a customer can see what the central station sees it will help dealers close more sales.”

Jones said using verified alarms also brought on other shifts in the market as well. “In addition to changing both the short and long term value of an alarm dealer’s business, it allows the dealer to build a positive relationship with first responders. It’s powerful for a dealer to demonstrate what their central station operator sees before asking for a response and proves that although the dealer has many equipment options he or she has chosen a system that unburdens and takes first responders into greater consideration,” Jones said. “This goes a long way in building relationships with first responders … I think in two years, we’ll look back and see a major trend.”