Security Sales & Integration February 2023 - 24

Management
Diving Into Dealer
Programs
Many dealer
loyalty programs
are cost and
commitment free
to participants. If
the manufacturer
or service
provider charges
an annual fee or
asks for purchase
commitments,
keep looking.
- Warren Hill, Alula
have the opportunity on the yard signs
to build your name or at least cobranded
with the company. After all, when it's said
and done your future business exit strategy
will depend on owning accounts.
▶ Does the funding program offer you
leads to customers? One of the hardest
jobs as an alarm company is finding new
business. At Haxakain, we teach companies
how to grow their business but
no matter what we teach it's an ongoing
process. If they don't provide you with
lead sources, you need to leverage those
programs that will bring you the lowest
fruit in regard to leads. As I like to say it,
'Circle of trust relationships are the best
types of leads.'
▶ Does the funding company offer any
type of revenue sharing on the accounts
you've already sold to them?
Many of the companies will share in the
long-term revenue for those accounts
you have sold. Those checks become
quite large over the years. If you've
chosen to sell your paper, make sure that
LET'S MAKE A
DEALER PROGRAM
ACCORDING TO John Madden, Vice President, Vector Security Authorized
Dealer Program, here are the checklist items that matter most in selecting
and gaining value from a dealer program.
VETTING
☐ Research provider company's reputation,
including history, size, customer base
☐ Research provider company's financial health and stability
☐ Understand terms of the dealer agreement
☐ Meet with the provider company face-to-face
☐ Schedule time with provider's management team
to review values and business practices
☐ Understand the dealer/branch partnership as it relates to the customer
ADDING VALUE
☐ Quick cash flow
☐ Brand recognition
☐ Pricing of products and services
☐ Partner with a larger known company
☐ Longevity of dealer program
☐ Provider company's financial stability
you get the advantages of some of that
revenue stream over the future.
▶ Understand the multiples. You need to
look at the net multiple amount paid out
on any contract. Some programs tout
that they will pay up to 40x in contract
payout, but after you calculate all the
holdback multiples, there really isn't much
meat on the bone. Make sure you are
being fairly paid for these accounts. They
will generate thousands and thousands of
dollars over the life of the account.
▶ Lastly, should you really sell your
accounts? While running the authorized
dealer program at Dynamark, I negotiated
a partnership with Synchrony Bank
that allowed our dealers to keep their
accounts, being paid by the bank on the
sale of the alarm system to the end user.
Some of those payouts were as much as
$2,000 to $3,000. The real bonus was the
ability for the alarm dealer to be able to
still own the monitoring revenue stream
for years to come. I encourage any alarm
company looking at selling their paper to
also explore the option of owning their
own contracts by leveraging a third-party
finance company.
WARREN HILL,
Vice President, Marketing, Alula
Being part of a dealer
program typically comes
with a number of value-adding
benefits. Some
of those might include:
▶ Access to deeper
levels of technical training,
including training
materials and/or training
personnel.
▶ Access to professionally created marketing
materials that can sometimes be co-branded
or private labeled.
▶ Access to preferred pricing on products
and services, which tends to be a highly
sought-after benefit.
▶ Access to credits or funds that can be used
for marketing and sales related activities
and expenses, which tends to be another
highly sought-after benefit.
24
Security Sales & Integration FEBRUARY 2023
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Security Sales & Integration February 2023

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