Are You Making the Profit You Thought You Were?
by Dera DeRoche-Jolet

Are you making the profit you thought you were? Everything in your business should be designed to increase your profits, not merely your sales. The key is to hone in on your finances.

Since most of your profit will come from recurring monthly revenue you should know your monitoring bill inside and out. Your profit per customer should equal your charge per customer minus the cost for monitoring that account. Are you paying what you thought you were? The answer might surprise you.

Look at your next monitoring bill. Divide the total charges by the number of accounts you have. Does that figure come close to what you thought you were paying?

The price tag of merchandise and services is often the emphasis in the security industry, when it should be on the quality of the merchandise and the value of those services. Undoubtedly you know a customer who compromises safety, because he only considers the bottom line. Such a customer's "bargain" mind set can have unpleasant - sometimes tragic - consequences.

When it comes to monitoring services, the dealer is now the customer, often with the same "bargain" mind set. There is usually more talk about what a dealer is paying rather than what a dealer may be paying for.

Some monitoring companies break their services down and charge individually for each service. Others provide essential, quality monitoring services as a package, with few add-on costs. As you might expect, the latter company cannot match "bargain basement," stripped down service arrangement fees.

Yet, a comprehensive package can cost less, because the same services are provided to every client and savings are generated from that uniformity. In other words, prepackaged services offer something called an "economy of scale" - the greater volume produces a smaller cost per unit.

As an example, most monitoring services charge for coding signals that exceed three or four per subscriber. The package approach has no limit on the number of signals that can be coded to a subscriber. Likewise, there is no limit on the amount of calls that will be taken, and often no charges are incurred for master file printouts.

What sets one package-priced service company apart from another is often company policy. Look for a company that charges the same rate for all formats, including the newer types of technology such as 2-way voice and video communication. Make sure they will notify you of any problems occurring with subscribers (so you are not taken by surprise when a client calls). Check if they have a 24-hour technical support team and something similar to a problem resolution task force.

Obviously, for the discriminating dealer who demands superior service, the package approach to alarm monitoring is usually the best deal. On the other hand, this approach also gives the economy-minded dealer a shot at providing the kind of high-quality service that attracts and keeps subscribers. What's more, with no add-on costs to worry about, both dealers can routinely estimate their subscribers' incomes. That's important as you build your business and develop marketing and business plans. So next time your service provider sends you a bill, ask yourself this question: "Are you making the profit you thought you were?"