Central-station strategy is key to generating revenue at EPS
Nov 1, 1999 12:00 PM
Centralized security system management will grow in popularity over the next few years, predicts Wayne Bro, director of marketing and sales for Engineered Protection Systems Inc. If he is right, EPS has much to gain, since the heart of the company is its central system. Most of the company's commercial business focuses on fire and burglar alarm systems, CCTV and card access, and all but CCTV can be managed centrally.
"A typical commercial installation for us is an intrusion/fire system with small card access, all controlled from the [UL-listed] central station," explains Bro.
Most of these customers are manufacturing plants and mid-size commercial facilities; a few are retail establishments. EPS manages a couple hundred accounts from the central station, and the size varies. For instance, the access control clients range from one reader to 150 readers. Some administer the system themselves, but EPS advises clients to opt for the central station approach.
"We're really pushing hard for this central-station-administered card access," says Bro. "We sell it the way traditional intrusion and fire systems are sold - it's leased equipment [and] we service it."
He expects the EPS approach to central station management of access control systems to develop a larger industry following in the coming years. Such an approach means smaller systems and smaller costs per door. The focus is on the service, not the software.
The approach is particularly attractive to smaller companies with 20-25 cardholders, companies that might not be able to manage a state-of-the-art card access system in-house. The advantage for EPS, of course, is cash flow. "We put a recurring monthly revenue on it - that's key," he says.
Recent Commercial Installations EPS doesn't handle a lot of retail business, but some of its most important clients are retailers. For instance, EPS still does business with its first customer, D & W Stores. One of its most recent commercial installations was for Meijer, a Midwest retail chain. EPS handles all the Meijer locations, including 12 stores that are opening this year.
"We set up a large enunciated fire system for them in [each] 500,000-square-foot store," Bro explains. "It can take a year to put the thing in - it's all point by point."
EPS also installed a card access system for each cash room. But that was a small part of the Meijer installation.
Access control plays a larger role for another client, Wolverine Worldwide, the company that manufactures Hush Puppies. EPS installed card access systems in all of Wolverine's facilities.
Wolverine is one of EPS's central station clients. Human resources forwards the data to EPS, which processes the cards and handles the software. The 26-bit proximity cards can double as ID cards. Some clients use that option; Wolverine doesn't. Bro himself isn't a big fan of the multi-purpose card.
"The thing with the ID on the card is if someone finds your card, they have your ID, they have the company information," he says. "If someone loses [the dual-purpose card], the person who finds it has all the information they need to get into your place - they even know who they are supposed to be. It doesn't happen that often, but it is a risk."
EPS primarily uses PCSC for card access systems. In the past, it has used PCSC, Cardkey, Software House and Schlage.
Card access systems are only going to become more prevalent and more sophisticated, Bro predicts. He also sees an increasing demand for CCTV. But this isn't your father's surveillance system. The guard with the monitors may soon be a relic of the past.
"There is a lot of demand right now for off-site viewing," Bro says. Anyone with a modem, a PC and the right camera can monitor facilities from anywhere. He tells of a client who owns six delicatessens. He can see what's going on in any store at any time just by dialing in via his PC. And he can record the scene on a CD-ROM.
The technology isn't cheap, and EPS only has a handful of such clients now. But, Bro notes, the technology will become more affordable; once it does, it will become more popular with clients.
Bro stresses that the CCTV side of his business isn't managed through the central station. Fire and intrusion alarms have specific protocols; operators know exactly what they must do. This is not the case when monitoring a television screen.
"One of the things to avoid in any central station environment is anything that causes your operator to make a judgment call," he cautions.
Changing Marketplace Access control and the camera systems may represent the future of the industry and of EPS's business. Companies are more concerned with their internal workings. Several factors are contributing to the trend, according to Bro:
Workplace safety. Companies are placing increased emphasis on protecting workers. This is particularly important because, in a PC environment, people can work odd hours. There are a lot of companies concerned about the safety of employees outside of normal business hours.
Limiting workforce access. Along the same lines, more and more companies are separating work forces from each other and are not allowing access for one group into the area of another. There are some common areas, but the controls are becoming tighter. First shift doesn't have access during the second shift. Office workers don't have access to the warehouse area.
Changing work environment. In the past, if someone broke in and stole your stuff at night, you called the insurance company and replaced it. But today, when someone steals your PC and dumps the hard drive, the consequences are far worse.
"Inventory control and employee safety is no longer focused on outside intruders, and that's changing the way companies view security," Bro says. "It's not the bad guy with the mask breaking in. The bad guys are already there, and they are on the payroll."
Growth And Competition Bro says that one of the greatest challenges the company faces is trying to outgrow cancellations. "In recurring revenue, we're at a size right now where we are replacing business; we're not growing at the rate we need to," he says.
Strategies include increased emphasis on mass marketing and increasing the size of the sales staff. The latter is a challenge; the competition for workers is fierce.
"Finding qualified people is difficult right now," he says. "I've been stealing them from my competitors."
EPS isn't letting a tight labor market get in the way of growth; the company plans to add new locations in the next year.
"We've got to expand and look at different ways of generating income," Bro says.
CAD Gives Competitive Edge One area that sets EPS apart from the competition is its CAD department. The two CAD operators can customize CAD drawings for customers, developing detailed layouts. The department was created for the Meijer account, but it stays busy working on layouts for other clients as well.
Surprisingly, the competitive edge isn't so much in offering the service, although that certainly helps in terms of marketing.
"It's one thing to market yourself and show that you offer CAD, but what we really do it for is our internal costing," Bro says. In addition to the CAD staff, EPS has a dedicated person who works with the layout designs for costing purposes.
"When you're bidding a large job, the more accurate you can be on the estimate, the more profitable you will be on the other end. It's hard to be competitive when you're just guessing," he says.
Bids are more realistic, so there are fewer ugly surprises once the installation is under way or finished. The information can show the sales staff just how close to the bone they can cut.
"By being very competitive and accurate on our cost estimating, we are able to go in with our eyes open, knowing when we need to get aggressive on something," he explains. "We do an actual estimate before we quote. You think everybody does, but they don't."
He estimates that 90 percent of their closings fall within 3-4 percent of the initial estimate. Anything beyond 10 percent draws close internal scrutiny, he adds.
Computerized costing also helps EPS position itself as an expert, Bro says. "We go in knowing what it's going to take, and we can talk intelligently about solutions."
Marketing The Central Station Not surprisingly, central-station support plays an important role in EPS sales and marketing efforts.
"If you're going to sell at EPS, you're going to talk about our central station, our support, our administration of the software. The message is simple. EPS has more expertise than the client," says Bro.
"The difference between doing it here and doing it on-site is that most companies have no procedure on-site for what they are going to do with the information," Bro explains. "Often, there's no backup and no contingency plan. But managing through the vendor's central station can erase the problem, and it can make a powerful argument. The client doesn't have to worry about training someone to manage the system. Card access software can be complex, and it isn't used every day."
Bro finds it easy to dismiss concerns over lack of control. How much control does the client have when only one or two employees even understand the intricacies of the system? "Generally, we have more control," he says. "The guy in the corner office who wants to effect change can go to our central station and get the same thing done consistently."
He also points out that the personnel department often handles card access systems. And while they may be the best HR folks in the business, they aren't security professionals.
"Do you really want that human resources person handling security? Human-resources people aren't typically security-minded," he warns.
Waiting On The Web One marketing tool has not yielded spectacular results, though. EPS established a Web presence at http://www.epssecurity.com. So far, the site has not been an important part of EPS's marketing strategy.
"It's nice, but we aren't taking many hits on it. We don't see any of our business coming through it," he says. "Our competitors are looking at it, but I'm not seeing a big marketing impact."
The site is straightforward; right now, it's primarily a brochure scanned onto the page. "We're probably not utilizing it to its fullest," acknowledges Bro.