The ROI sell: Video is different (in good way)

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Thursday, January 1, 2009

Most physical investments a business can make in the security arena are fairly straightforward in their purpose.

A deadbolt keeps a door locked. Bollards, fences, razor wire help secure a perimeter. A card reader lets some people in, keeps others out.

It’s all security related.

Video systems are different. Yes, they provide security, watching for things to happen, recording them when they do. But the wise integrator knows the additional, non-security related benefits the systems can provide, and uses them in sales.

Selling that return on investment to customers becomes even more important as the economy continues to sputter. If a business knows that the camera system it’s buying will provide specific returns beyond security, the investment is much more valuable - and palatable.

The added value video can provide varies by the vertical market. For example, Tyco’s video solutions are being used by a hospital’s internal pharmacy to monitor quality assurance, and by one of the nation’s top horse breeders for both security and to monitor the health and status of foals and pregnant mares.
“The key is to sell on ROI. How can the system help reduce cost or increase revenue in core areas of the business,” said Warren Brown, senior product manager for video intelligence solutions at Tyco International, in an email interview.

“Or, in verticals where the security system is a necessary part of an additional build out, the pitch is more on a total-cost-of-ownership basis - proven, durable products that last with low on-going maintenance reduce surprises and help companies manage budgets go forward.”

But most experts agree that the vertical market most open to the concept of video being useful beyond security is retail.

“The big retailers are relatively aware. The biggest retailers in the U.S. are our customers,” said Elan Moriah, president of Verint Americas Inc. “If you convince them, they will be very willing to proceed with such an application. They are doing that; the trend is just in the beginning.”

Combing IP video with a point of sale (POS) system can be powerful for retailers, he said, and can reduce a company’s internal shrinkage at the cash registers.

Then there’s the whole customer experience feature. Using analytics, a video system can highlight queues with more than a set number of people waiting in line, and alert managers. (That feature is also a sell with banks that want to use the ever-present cameras to monitor long customer lines, Moriah noted.)
Verint’s system is deployed in BestBuy, said Moriah, to let the store know where customers go first when they enter the store, allowing the retailer to identify the hotspots.

BestBuy can put a price tag on those hotspots, said Moriah, and develop floor space value.

It also allows a retailer to do very sophisticated and granular market research.

“With video you can look at product layout, you can very accurately assess how many minutes people stop in front of a product, you can assess promotional activities,” said Moriah.

Mike Harvey, senior marketing manager at Honeywell Video Systems, noted in an email interview that using video plus analytics can help improve sales and marketing strategies and maximize marketing dollars.

“Systems with integrated analytics can also collect and report on exceptions within processes to note where additional employee training is needed, for example,” said Harvey.

“Overall, intelligent analytics can collect and report measurable data to assist management in making more informed operational and business decisions.”
Harvey suggested a simple strategy for making a sell based on ROI: Identify existing customers who have positively impacted their bottom line with specific technology and document the successes, he said.

Then, identify targets in the same vertical market or with a similar application/need and demonstrate how they can do the same thing. Show them how they can save money, and estimate the time needed to recoup their investment.

And there are some real numbers to sell ROI to retailers, said Tyco’s Brown, some security-related, some not.

According to Brown, by using video intelligence versus standard surveillance video, retail customers have been able to increase the number of closed theft cases per month by more than 100 percent; increase the value of closed theft cases per month by more than 150 percent; and increase the accuracy on front door people counts from 74 percent to 88 percent, as compared to infrared beam breaker technology.

One selling point is that in many cases, businesses have infrastructure in place, and an incremental sale can be made.

“That’s the beauty of this proposition - the infrastructure is there, the camera is there, and it’s just leveraging the same infrastructure with an investment in analytics, integration,” said Moriah.

“I personally believe there’s a huge opportunity to leverage existing infrastructure.”

One of the exciting trends at the moment is for integrators to attach a decoder loaded with video analytics into an existing video system, looping the camera through it, noted Bob Banerjee, product marketing manager for IP video products at Bosch Security Systems Inc.

It can “super charge” one camera with cutting edge analytics, for a relatively cheap cost, he said.

“It’s a very small step to add, but it gives you different benefits,” said Banerjee. “In a time when no money is being spent, a little bit of money is better. It’s a step-wise way to get in the door.”

Harvey, of Honeywell, noted that integrating video analytics software with an existing surveillance system can increase productivity through more effective monitoring of large areas by alerting operators to any suspicious activity; improve security by automating surveillance and significantly reducing missed detections; and control costs by only alerting operators to activities of interest and thus virtually reducing false alarms.

“Retailers can use intelligent data analytics to link surveillance systems with business applications such as ATMs and POS systems.

“Through this integration, retailers can gain valuable insight into exceptions, which can help eliminate theft and fraud,” said Harvey. “This integration can also help retailers better understand buying trends and customer behaviors, which can help improve sales and marketing strategies and maximize marketing dollars.”

And that ought to be something you can sell.