Freedom From False Alarms, Complicated Programming

Arm this system by pushing a button and disarm it by unlocking the deadbolt.

The landscape of security has certainly changed since 1969. Many brands have just vanished, leaving orphaned dealers and installations behind. Some companies have been absorbed by larger ones and have lost their singularity and the qualities which enabled them to become established in the first place. The supply side of the industry has changed its rules many times, with many players now marketing direct to the end-user, and competing with their own customers by entering into the installation side of the industry.

NAPCO has been providing the independent dealer with security solutions since 1969, weathering the storms of change with a succession of innovative products and a focused corporate mission. Acquisitions have included door hardware manufacturer Alarm Lock and access control systems manufacturer Continental Instruments. Continuing to hone its core specialty of electronic security manufacturing, NAPCO has prospered and evolved as still independent, still loyal to its dealers.

Locksmiths who have been into electronic security for a while, like me, probably cut their teeth (and burned their first PROM) on a Magnum Alert, which I believe was the first microprocessor-based multi-zone alarm control panel, or at least the first one that worked. As mentioned, imitators and competitors have come (and gone) since 1969, but NAPCO prevails.

The new NAPCO Freedom reflects the maturity of NAPCO’s technology, its ability to come up with new ideas, and its awareness of the needs of the market and the challenges facing the industry, namely providing products which fit the demographic of strongest potential sales growth, and mitigating the false alarm crisis which threatens the residential alarm industry with extinction.

Those homeowners who have up until now felt they couldn’t afford a security system, didn’t really need one, thought alarm systems were ineffective, or were intimidated by the complexity of operating an alarm system represent an immense untapped market for new installations, and Napco plans to tap this market with the new Freedom line.

When a locksmith loses an account, he may not even know. The majority of his residential business is what we could refer to as casual or infrequent. You install a couple of deadbolts, and you probably will never hear from that client again, especially if he’s a satisfied customer.

But the revenue stream and business model of alarm installers is based partly on the recurring revenue from monitoring the alarm systems they install. That monthly payment from your subscribers is their way of renewing their vows with you.

Sometimes locksmiths criticize monthly recurring revenue by comparing installing a lock, which is a one-time charge and ostensibly brings the client a lifetime of safety and security, to an alarm dealer who bills the client monthly. Furthermore, everyone in the alarm installation business knows that because of competition and mass marketing, the general public is spoiled and have been trained to expect to pay little or nothing for their alarm system.

The cash flow model of the typical residential alarm dealer works something like this:

When an alarm system is installed, the dealer gets the client to sign a monitoring agreement in which the client agrees to pay $25 a month for a set term, five years in this example. In order to close the sale, the installer will frequently get little or no cash up front, and consequently may need to wait until into the third year of the contract to see a profit. The first three years of monthly payments go for the equipment he installed and the labor he expended. It also has to pay the central station, and his other bills. The remaining two years of the contract are ostensibly profit, but the dealer is still providing 24-hour a day, seven-day-a-week security, and maintaining accounts requires a certain amount of customer service.

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