The Silvertrac Extra: A Blog & Podcast for the Security Guard Industry

023: Customers Only Care About Price.. The Downfall of the Security Industry

Jun 19, 2015 3:39:00 PM / by Johnny Page

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You’re bidding on a contract, and you feel great about your proposal. You’ve demonstrated your ability to meet every possible contingency, established clear procedures for communication, and shown the customer how you’ll be an effective partner in keeping their property secure. So, of course, what happens? They ignore all that and immediately turn to the back page to figure out how much it will cost.

This emphasis on price above all else makes the security industry tough. It drives down margins, makes it difficult to differentiate your service, and reinforces negative perceptions about security providers.  On today’s episode, we discuss the three issues we’ve seen that cause customers to ignore everything besides the price.

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Lack Of Credibility

The biggest issue for security companies bidding on a project is the lack of credibility with customers. Property managers and other potential customers have come to expect that contractors will exaggerate or just plain lie about the level of service they provide, so they ignore it out of hand. This creates a negative feedback loop.

“The low margins force companies to either lie about the services that they’re providing or hire very low, minimum wage employees that… really deteriorates the level of service that you are offering,” I tell Chris.

Part of this issue is a disconnect between business development managers, who are focused on winning contracts and cutting costs wherever possible, and the actual operating managers. Companies deliver poorer service than they promised in order to meet a low budget, which just convinces customers not to pay attention to the promised level of service.

Limited Awareness And Buying Power

Most property managers have to work on a tight budget that is enforced by administrators above them. They simply can’t take on higher costs for security unless they can make up those costs somewhere else in the budget.

Additionally, security is often not perceived as an especially pressing need—you don’t feel like you need it until you really do. Unless you’re bidding for a property with active issues, security tends to be a low priority, and a cheap price is the most attractive quality.

Since security tends to be a low priority, property managers often view security guard companies as interchangeable. They think that everyone just provides patrols, and there’s not really any differentiation. You have to show them that’s not the case, and that usually starts by demonstrating how you can help them cut costs in other areas.

“Become a partner, not a vendor,” says Chris. “Look for ways to save your client time and money, do more things for them.”

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Poor Communication

Property managers aren’t the only ones guilty of failing to recognize the complexities and differentiation of the industry. Too often, we see security guard companies trying to apply a one size fits all approach to dozens of different property types and industries. In doing so, they lose any competitive edge or value proposition.

Focusing on a niche and really developing a deep understanding of an industry allows you to communicate a clear differentiation to customers. You want to be able to explain how you’ll not just meet their expected needs but actually go above and beyond to help them solve problems and cut costs throughout their operation.

Shifting from a Vendor to a Partner

 

 

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Johnny Page

Written by Johnny Page

Johnny is a Customer Success Enthusiast for Silvertrac Software who is passionate about business, technology, and (of course) our customers! Johnny spent time in the security industry in Business Development, Marketing, and Operations before joining the Silvertrac team.

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