Are You Sick Of Losing Deals To DIY Cameras?

The opportunity to supply and install HD cameras to homes and small businesses (10 employees or less) is nearly gone.

We win a lot of proposals, but over the past year we've also lost many to DIY. Gyms, retailers, convenience stores, gas stations, gun shops, farmers to name a few.

When the consumer can buy an HD system from Costco for under $500, why would they pay double or triple with a security provider?

What's your successful strategy?

I'm not worried about losing sales to Costco or anyone like them really. The cameras they sell aren't good quality. So after the, let's just say "budget minded consumer" buys it and sees that it is useless in MANY ways, hopefully learns a life lesson on "you usually get the quality you pay for it".

That same customer who doesn't want to pay much for their security probably has flat screen TV's in every room of the house's not always about budget really, it's about priorities. All we can do is try to educate when they'll listen and be here for them when they get serious about their security.

"The cameras they sell aren't good quality."

Devil's advocate. Is that not the same stuff / level that ADI sells as W-Box that many 'pros' use?

All that means is that ADI stoops down to compete in the low end as well. Careful calling anyone who sells that trash a "Pro".

Real pros' offer custom solutions tailored to the customer's needs based on their application. Don't cave in and compromise the integrity of what we do to keep up with those driving down industry pricing and value.

Stick to the security minded customers and you'll make money and feel good about the services you provide. Let the rest go to Costco or work with the industry bottom feeders.

But their flat screen TV's were probably $300 each not $900 each.

It's always a compromise of the three sides and picking two in any purchase home or business:

Price, performance, quality/reliability.

To be honest this topic gets a lot of play on this board. I just don't have the same experience. The prices have come down significantly no doubt, but our business has actually increased, and I think that the prices are at the root of it. Price decreases have allowed fence-sitting consumers to reach out and pluck that fruit from the tree.

As a side note, I was ringing bells for Salvation Army at Christmas in front of a Sam's Club. I saw several of those kits go by. I did not approach anyone with the "why" question, but an observation was that they were buying it for their home. That is a customer that was never going to call us anyway.

Coming from a telecommunications background and having a direct competitor in the area, we provide value in the IP cameras that we provide. Anytime that you can show a consumer the "value" of purchasing from you especially if you provide support after the sale, it is a win-win.

Yes, we don't nab every customer. To be able to win 100% of the market is unrealistic. Those same customer's walking out of Sam's club with the kits will get frustrated and realize that they should of called the local provider that installs the system once they can't get it installed or the quality is not what they anticipated.

The good ole adage, you get what you pay for.

Occasionally I get calls from people who purchased a DIY kit from Costco, Sams, or eBay and ask if I will install it for them. I did it once for a friend who I wanted to help out, but after that experience, I decline to help others.

In my experience, the customers who always want to go for the cheapest deal are also the most high-maintenance ones. They not only want the cheapest gear, but they want the cheapest labour to install it, and then are the whiniest about wanting quick service and everything covered under warranty.

"Losing" that business is no great loss.

The thing is that many of the deals we lose to DIY cameras remain great alarm subscribers. I wouldn't characterize these subscribers as cheap or clients I wouldn't want anyways. 5 years ago they wouldn't have bought cameras from Costco.

Virgil, up to around 16 years ago you could have taken a few Microsoft certification classes, been a little computer savy, and gone around to small businesses and charged $100 to $150 an hour (or more if you knew some advanced Cisco stuff for your close to mid size companies), and small computer store retailers made relatively good margins selling computers.

Then Dell, HP, Gateway, Acer (remember, this was 16 years ago) initiated MAD (mutual assured destruction) with their race to the bottom pricing which destroyed margins for the small retailers, and now you get anyone who knows even a little bit about computers all over Craigslist charging $50 or less an hour for onsite services.

The level of the security market you're talking about, "home and businesses with 10 employees or less", is the level that is starting to become where computer services and sales is today. The question now is, do you want to stay playing in that market, or not? If not, you're going to have to do something different that is marketable, play in another level of market, or do something else entirely.

We used to do a lot of small businesses. Now we do much larger verticals, where needs are much more complex and have higher requirements than what the small mom & pop shop needs are, on a greater scale. And greater scale means much more technical ability and understanding, not just selling more cameras or door access. And if it is a small job, we still do them from time to time, it's usually beyond just the simple camera install, something beyond the capability of the average trunk slammer.

We are a very different company than what we probably were even 10 years ago. Because we had to be if we wanted to get out of that dog eat dog market where sometimes so called integrators don't even know what margins they need to make and don't realize they are slowly cash dying. You loose jobs to competitors who aren't even making money, and you can't compete against that and make money.