Demand for IP Helps Boost Integrator’s Bottom Line
|A combination of higher demand for IP video systems and close relationships with its vendors has contributed to an increase in sales for Dallas Security Systems.|
The last few years have been challenging for many businesses since the housing bubble burst and plunged the United States into a recession. And while that has begun to improve of late, the uptick has been slower in some areas of the country than in others. Case in point: the area of Texas where Dallas Security Systems makes its living.
“The north Texas area doesn’t always track with the rest of the country,” says Ray Cherry, vice president of sales for the Dallas-based integrator. “It’s been a battle since late 2008 or early 2009, but it’s really picked up in the last six months.”
As a result of this turnaround, Dallas Security has been growing, with sales up about 8 percent this year over last year. Perhaps the biggest driver for this has been IP video, which Cherry says appears to have hit the long-awaited tipping point in terms of general adoption.
“Our business has started to swing the other way. You could safely say IP is almost 50 percent of our business. Last year it was probably 65 percent analog, so that’s how much IP has grown,” he acknowledges.
Cherry says that as a result of the increased IP business, the company’s salespeople have gained comfort and confidence selling and proposing it to customers. The main issue, he adds, is overcoming the “price gap” between IP and analog by helping customers understand the value of IP.
“IP is a lot more in force and it’s more acceptable, but customers still have to be educated, mainly because of the cost,” he says. “When you ask someone if they want an analog or an IP system, they’re going to say, ‘Oh, I want IP.’ Then you tell them the cost, which is still enough of a difference between the two to make a difference.”
To keep current with the latest technologies, Dallas Security regularly brings in vendor reps to teach its sales staff and others about new features and benefits of their products.
“I hold sales meetings weekly, and at most of those meetings we have an equipment vendor come in for an update,” Cherry says. “They’re also really good about responding to email.”
That concerted effort to increase employees’ knowledge is the result of strong relationships with vendors, which Dallas Security has worked hard to build, Cherry says. “We’ve really worked with them to do it. They’re more than willing to do it, so we never have to beg. And they’re always ready to help us,” he says.
When it comes to installation and maintenance, Cherry says it is important for Dallas Security to hire those employees itself, rather than subcontract the work. “A lot of our competitors use subcontractors, but we do it with our own people. We actually use it as a selling point,” he says. “That way, we can control the quality of work better.
“I’ve been in the industry 31 years and I’ve used subcontractors. It’s good because you can fix your cost a little better. But on the other hand, they’re not as accountable as your own people.”
Based on his company’s experience, Cherry offers the following advice for anyone who may be dipping their toes in the IP water but is hesitant to jump in. “Keep in mind that if you have people who are used to analog, it’s going to take a while for them to get used to IP and selling it. Once they do it, they get more confident and it’s easier to overcome. I’d preach a bit of patience,” he says. “And if you’re going to quote a customer for analog, give them a quote for IP too, and vice versa.”