Your sales margin is an important indicator of the success of your business. The higher your sales margin, the more profit potential you'll have. Striving for strong sales margins, while keeping a close watch on your competition, is critical for critical for long-term business success.
Yet, that’s not an easy task in the security industry, given today’s competitive environment where manufacturers are too often locked in a race to the bottom with respect to pricing.As a security integrator, you are used to having a predictable revenue model selling security hardware and software to end users. Your portfolio likely contains products such as door hardware, access control systems, card access readers and software, video surveillance cameras, VMS software, and many other technologies to help your customers deploy a complete security solution.
The Challenge of Meeting Sales Targets Today
In the past, selling these products was enough to keep your business stable. However, times have changed along with technology. Just take a moment to think about the volume that you need to sell to meet, let alone exceed, your sales targets. If you are looking to sell millions of dollars in security products, your team needs to work overtime to reach the margins your CEO demands. Even more, access control and surveillance systems are two of the most significant victims of the never-ending price war, which continues to erode profitability for systems integrators. Without a large enough sale, many transactions are a losing proposition.
Security Entrances are a New Opportunity
Unlike security cameras, card readers and other security technology, security entrances continue to have healthy and stable margins, and the market for security entrances is only growing. According to the IHS 2015 survey “The Market for Pedestrian Entrance Control Equipment”, the total market size in the Americas for all types of security entrance products (from 3-arm turnstiles to security revolving doors and mantrap portals) grew from $123 million in 2012 to $159 million in 2014, or an average of 14 percent per year. The report predicts the entrance market will continue such strong growth into the early 2020s. Even better news is that unlike cameras and card readers, security entrances continue to have healthy and stable margins.
Security entrances such as turnstiles, security doors and mantrap portals are a critical element of any business’s ability to mitigate security threats and keep a facility secure. They help businesses control who can enter and exit a building, and they decrease or eliminate the threat of tailgating, which has become a top security challenge as recognized by the C-suite.
One Sale Leads to Future Sales
Even better, security entrance sales are typically not a one-time purchase. We typically see end users increasing the number of security entrances they purchase as their security needs change and grow. There are several reasons for this, but usually the customer will bring up new security pain points they have at other buildings once they see how well their first security entrance project is functioning, especially when they observe an ROI from reduced need for security staffing. This creates an opportunity for you to show them how they can secure other locations, and create a strong relationship with the end user which can lead to multiple sales over many years.
Integrating security entrances into your business model will help you increase your profit margins, build a strong relationship with current and future customers and produce additional new revenue. It’s a win-win situation for today’s integrators.