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The Word on the Street
Hard Economic Times require "Increased Buying Savvy" !
I don't think there is a segment of the security industry
that hasn't been touched by theses tough economic times. Customers as
well as vendors & installers are affected.
If you are a
security system customer, don't be shy about asking for additional discounts
from your vendor! If you are a vendor or installer, don't be shy about
offering additional discounts to your customer. We are all in this boat
together!
Customers: If you are pleased with your current security
vendor, invite them in to discuss the economic challenges that your
company faces. Ask them what they can do to help cut costs. In exchange,
offer them your continued loyalty through this tough period. Perhaps you
and your vendor can enter into a special short term agreement to
generate
additional discounts, if you agree to use that vendor exclusively through
this interim period.
Vendors & Installers: Put
in some extra effort to keep your customers satisfied! Be proactive by
offering them short term discounts on parts and labor. I don't suggest
you "give away the farm", but I do recommend you offer discounts where
you can. This will help strengthen the relationship between
you and your customer.
All businesses know the advantage of
volume discounts. If you are a customer that is planning a security
system expansion,
use that as leverage with your service provider in seeking better
pricing. Any vendor or installer should be eager to respond positively
to discount requests, if they see a larger volume of work headed their
way.
Customers should avoid the trap of switching vendors
just on the basis of low price, especially if the current vendor is
doing a good job of supporting your system.
With every
economic downturn (and I have seen at least 9 in my lifetime) there are
always substandard service companies that pop out of the woodwork to offer their services at prices
that is well "under water" from a profit
standpoint. It's never in the
best interests of a customer to take a low price bid simply on the basis
of "low price" without checking the resources, references, and banking
information of the company it intends to deal with, especially during
a slow economy. The last thing a customer needs is a vendor
that fails to finish a project, or runs out of resources to give
the required service and warranty support after the installation is
complete.
Customers, if you need help in evaluating a
particular vendor or installer, feel free to contact us. We have
informational resources that can help you make a good evaluation.
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The information above provided by Gary Clark,
Electronic Security
Consultants, LLC.
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Specifier's Corner
Maintenance Agreements (MA) ---A Necessity or Not?
As Security Systems have grown, so has the cost of their upkeep and
equipment replacements. Cameras should last a minimum of 7 to 10 years, but computer workstations, servers,
and power supplies will need to be updated every few years. So how will
the customer handle these expenses?
One option is to simply "Pay as You Go."
This approach pulls money out of a facility's maintenance budget anytime
a repair is needed. If you can estimate the next year's maintenance expenses
correctly, this may be a good way to proceed.
Another option is the "Maintenance Agreement (MA)"
that would be in effect after the initial warranty period. These can be
one year plans, or perhaps they can span a two or a
three-year time period. Many have escalation clauses to reflect
increases in the cost of labor & materials. Keep in
mind that MAs can be
whatever your customer wants them to be. Some offer "Bumper to Bumper"
full coverage for all parts & labor, while others are customized to cover a
limited quantity of replacement parts and labor hours.
So What's Best ? ........It all depends on the customer!
Most large customers will require a MA
tailored to their needs, which they can budget for each
year. Smaller customers usually opt for the "Pay as You Go"
plan, since their systems are small, and less costly to
maintain.
A word of caution: Don't be too quick to suggest a "Bumper to
Bumper" Maintenance Agreement! These can turn out to be nothing more
than a very expensive insurance policy in which the customer seldom
benefits.
I personally like the "Customized MAs"
where the amount of parts and service hours covered are limited
to the anticipated service needs of the system. By limiting the coverage, you
also limit the cost. Usually both the customer & installer benefit from
this balanced approach.
Also remember, if your customer thinks they may need a "MA"
for a new system they're installing, it's best to build that MA requirement into
the original RFP. This allows that MA to be paid out of capital
improvement funds rather than the maintenance budget of an overworked
Facility or Security Manager.
Please contact us if you need help configuring MAs!
 Gary Clark,
Technical Advisor
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