2014 Business Forecasting
Want to start the new year right? Crunch some numbers. Just make sure you know what you’re crunching.
You’ve likely been planning for 2014 for at least a year, probably even longer. Capitalizing on market trends means you’ve developed a strategy for increasing your company’s sales or profits or both, and now you’re executing it — whether that means targeting an acquisition, adding internal resources, negotiating contracts, or any number of changes for 2014.
Business planning involves amassing information from a wide variety of sources — and weighing that information relative to what you already know about the capabilities of your business and the opportunities in your market(s). One of the things you may use in business planning/forecasting is market research. Compared with some industries, the availability of solid market research about the security industry is sorely lacking. There just is not enough of it, especially research that pertains to the installation channel, which is what you do.
Analyzing market research is not for the faint of heart. Mark Twain wrote, “Facts are stubborn, but statistics are more pliable,” which is a clever quip about the questionable reliability of statistical-based research. I have seen heaps of research reports in my capacity as SDM’s editor. 92%, 12%, 37%, 66% — the numbers are meaningless unless one truly understands what is being measured, who provided the data, and how it was collected. If sales of security systems are forecasted to increase 66 percent, you need to ask, “Compared with what?” “What is being measured — units shipped, sales dollars, or something else?” “Who was surveyed and when?” “Are they representative of the group in question?” “Were those surveyed given prompts or was the question open-ended?” and other such questions. You need to determine if the survey’s methodology and process were scientifically crafted, or if you’re reading the results of an informal poll posted on a website that anyone could answer.
I am very proud of the research that SDM conducts and publishes, especially the annual Subscriber Market Forecast Study (formerly titled the Industry Market Forecast Study). It is scientifically conducted to be representative of the demographics of SDM’s audience, and it represents only the installation channel of security dealers and systems integrators; it does not reflect revenue from product manufacturing or distribution. Like many research houses today, we are challenged with getting a response rate today that matched response rates of previous years; however, there is transparency in our reporting so when you read the SDM Forecast, you will understand how the numbers were derived and what they mean.
“Statistics are no substitute for judgment,” wrote Henry Clay. But I’ve found that, in addition to using their own judgment, security operators often feel isolated. They appreciate the opportunity to have something with which to benchmark their company’s performance. SDM’s 2014 Subscriber Market Forecast Study, which begins on page 42, can be that benchmark.
2 New Columnists
I am pleased to announce that two new columnists will be joining SDM this year. I think you’ll find the content of their columns to be engaging, inspiring, and full of information you can sink your teeth into.
Paul Cronin will write the bi-monthly Today’s Systems Integrator, a column that examines the business aspect of providing integrated security systems to commercial clients. In this first edition (see page 32), Paul writes, “We all have one thing in common: our client. How much are you willing to invest to help your client find the means to their ends?”
Paul is senior vice president of Atrion Networking Corp. He serves on the board of directors of Creating IT Futures Foundations; the board of directors at CompTIA; the board of directors of the National Systems Contractors Association; and the Education Advisory Board of PSA Security Network.
David Morgan and Alex Chavez will write Marketing Madmen, a column (see page 34) that will offer practical, action-oriented marketing ideas and advice, such as “5 Mistakes Security Dealers Make in Marketing,” “Does Facebook Help Generate RMR?” “Why Does Brand Matter for a Security Company?” and the like.
David and Alex are marketing professionals who specialize in working with executives in the security industry. They are co-founders of Security Dealer Marketing (SDM), whose mission to the security industry is to create awareness and to educate dealers/manufactures on how marketing tools work and what is available.