Security Sales July 2021 - 65

There's only one spend for the majority of these
properties that did not go down during the pandemic,
security. Janitorial services went down,
engineering services, parking went down, but
they had to maintain security of the property.
When property managers look at that from a
business standpoint, they're not able to leverage
security staff to adjust to the changes in revenue
as a building or site. Our ability to help support
that with technology is a huge opportunity.
Has that mostly been about leveraging
feature sets inherent in legacy
equipment or replacement?
Boulgarides: A lot of customers have changed out
access control readers. The challenge is there are
multiple Bluetooth providers and the credentials
are not always compatible with each other. HID
has got an offering, other companies have their
own offering. This has accelerated faster than the
industry was anticipating and so that's still a little
bit of a challenge. In most cases there's a significant
aspect of manual processes needed to get all the
Bluetooth credentials into a system for folks to use.
Francisco: Being heavily invested in a federal
government client base, we've seen them actually
increase spending and focus on the AI piece.
Artificial intelligence with things liked motion
detection and analytics have been in high demand
not only for greater situational awareness
and operations but also to be able to run reports,
discern patterns and identify areas of focus or
need. AI is something we'll also see coming to
light in the property management market. We
have some national accounts with multiple locations
that are on an RMR setup for managed
services like access control and CCTV.
On the government side, we don't do a lot
of Cloud-based work due to the way they operate.
They host their own Cloud datacenters and
there's a lot of regulations that go behind that.
However, one thing they are finally adopting,
which we're really excited about, and it has a
lot to do with the cooperation between security
and their IT, is doing a lot of virtual machines.
Instead of us bringing in our big servers and
MBRs, we're now working with our IT teams
to be able to put our systems in there, which
provided a majority of the work we performed
last year as a result of the pandemic.
AI has been big; more reports, more information.
To help bridge the gap and build a strong
relationship between IT and security, we've
securitysales.com
engaged an information assurance specialist to
help get ATOs [Authorizations to Operate] for
the government for systems to be online and on
their networks.
Continuing with managed and Cloudbased
services, have you found it
challenging to develop a pricing model?
Bongard: Yes, we're
continually looking at
that. We run it separately. We have our install
salespeople and we have our service salespeople,
and we're running it more through our service
department. It is a different type of compensation
and it's to keep people involved and interested.
We don't we have it completely figured
out yet, but we have a pretty decent platform. A
good thing about it is that you can talk to your
customer and they can budget for it easier. You
can tell them, " This what it's going to cost you
over this timeframe " and it becomes more palatable
for them on the RMR model that way.
Boulgarides: When we put together the program,
the first thing I did was bring on a director
of managed services to manage the program.
Our salespeople and other people in the company,
when they get a managed services opportunity,
they're able to work with somebody who
guides the process. Whale hunters didn't have to
turn into managed services sellers, they just had
to identify the opportunities. Our gross margin
for managed services is 50%. Installed systems
sell for somewhere around 32% gross margin,
so managed is much more profitable. The objections
around Cloud are rapidly going away, so
we're not dealing with that much. It is extremely
profitable and beneficial for our company.
From an incentivizing standpoint, I make things
really simple as I don't want my salespeople to have
to think too much. They get two times the monthly
recurring revenue upfront of anything they sell.
If you sell a $1,000 RMR contract, the first time
we get paid you get a check for $2,000. It's 10% of
our revenue right now, with our goal being 20%.
Francisco: I love Louis' compensation idea and
actually wrote it down! RMR is very important
to us and we currently have a sizable chunk.
However, we would like to increase managed services.
A lot of it for us comes down to a learning
shift and training people for it. Also, you don't
want your big game hunters to focus attention
on RMR as they're going to get bored with it. It's
just a mind shift for us to try to get toward that.
JULY 2021 Security Sales & Integration 65
We were lucky
in that I had
started an
initiative before
the pandemic
where we did our
business
continuity plans.
Part of that was
what happens in
emergency or
pandemic
situation. So we
were somewhat
prepared.
- Bert Bongard,
President & CEO
LVC Companies
Minneapolis
http://www.securitysales.com
Security Sales July 2021

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