ItÃ¢â‚¬â„¢s all in the numbers
Publisher, Security Systems News
It doesnÃ¢â‚¬â„¢t seem that it was that long ago that I did this exact exercise. But given the dramatic slow down in the U.S. economy, it seemed pretty appropriate, particularly since thereÃ¢â‚¬â„¢s been SO MUCH hype about the expected growth in product sales and installations throughout the security industry. So we went out to the community and asked them: WhatÃ¢â‚¬â„¢s really happening out there on the front lines? Is it soft or are things rolling along?
We went to our Newspoll subscribers...and there are a lot of them now...more than 7,000. We asked a series of questions in an attempt to get a measure of how well weÃ¢â‚¬â„¢re all doing.
Our first question was:
People say that the economy is soft and business is soft as well. Is this true for you? 62% said yes; 39% said no. We like this!
What have your sales been like this year? 40% have experienced an average of 17.9% growth; 28% have averaged 25.4% decrease in business; with 27% remaining flat.
Of the contracts that you have bid on, how many have turned into business for you? 42.1% have turned into business.
And when we asked: On average how many usually turn into business? The answer was 48.2%.
ItÃ¢â‚¬â„¢s important to note here 77% of the respondents answered the question about contracts turning into business this year, with only 58% answering the question about what was the typical number of contracts that turned into business.
Does this mean that more people have bid on or gotten contracts this year? Or that people donÃ¢â‚¬â„¢t know what their average numbers are? Of course now I wish that I had asked if the contracts were of equal size and value as before, or were they larger or smaller in returned revenue!
We asked if there had been any change in business since the troops began returning from Iraq. HereÃ¢â‚¬â„¢s what you said: 6% have seen good, positive change; 20% have seen some change; 73% have seen no change; 2% have seen a change for the worse.
IÃ¢â‚¬â„¢d sure like to be able to say the 2% negative change is simply coincidental. And that weÃ¢â‚¬â„¢re at the beginning of a trend to move forward, just as the stock market has improved and that much of the anxiety of how the war would impact our country has diminished. I suppose I can say anything that I want...but youÃ¢â‚¬â„¢ll decide for yourselves.
The respondents to this survey were: 46% integrators, 32% installing dealers, 8% manufacturers, 6% distributors, 4% manufacturers reps, 2% were consultants and 2% did not identify who they were.
Overall this is a nice cross section of the industry. No monitoring companies answered the questions but theyÃ¢â‚¬â„¢re likely waiting to see your numbers. Surely your sales directly impact their growth...or not!
I looked at the rise and fall of sales by industry sector as well, reviewing the numbers by installing dealer, integrators and manufacturers independently. There are some interesting differences too!
Installing dealers are seeing different trends than integrators: 55% of the dealers have seen 21.3% overall growth; 23% of the dealers have seen sales drop 22%; 22% are flat.
As far as the integrators go: 56% have seen a 21.4% growth in their business; 23% have seen a 42% drop in business (ouch!); with 22% remaining flat.
The same results I got from manufacturers ironically matches with the above.
With 60% being up, 20% being down, and 20% being flat.
I canÃ¢â‚¬â„¢t give you the exact percentages of growth or losses though, because folks were a bit sketchy about filling in these details. For you who did answer, thank you...and no, I wonÃ¢â‚¬â„¢t tell a soul who you are! But I think from the above, you can likely make some decent suppositions about how things are shaping up.
Certainly IÃ¢â‚¬â„¢d rather be in the security industry right now as opposed to being a retailer, a restaurant owner, or relying on the airline industry to be supporting my family, and myself. Are we rocking like so many analysts said we would? Yes, but only if youÃ¢â‚¬â„¢re comparing us to the above industries! Yes, 20% of the industry is down, with the integrators having taken the major brunt of this! WhoÃ¢â‚¬â„¢d have thought that? There isnÃ¢â‚¬â„¢t a soul out there that doesnÃ¢â‚¬â„¢t think the growth for the integration is a given! This likely says something very solid about where the problems in the economy really lie. So if youÃ¢â‚¬â„¢re an integrator and have some insight on this...please let me know.
Some folks believe commercial customers are looking at security a different way after 9/11, war and our global issues. I suspect this is a two-fold issue.
Years ago, The Wall Street Journal said historically recessions have only lasted 11 months. OK, so we broke that mold...But things are slowly moving forward now, and thereÃ¢â‚¬â„¢s no real reason they shouldnÃ¢â‚¬â„¢t continue to do this, albeit slowly. Rationally thinking, we should continue to see steady progress. But as I said the last time we did this studyÃ¢â‚¬Â¦progress and growth is affected by your attitude, commitment and how hard you work to make this happen.
Some people move forward in the darkest of times. So right now, this is not the time to lay back, give up or even rest but itÃ¢â‚¬â„¢s the perfect time to get cranky, persistent and push forward.