Responding to demand

INTERVIEW

Response to demand

Following on from the article in last month’s edition we take a closer look at a new response service in the UK and find out how technology is evolving in the alarm sector

How receptive are your customers to adding monitoring to their installation package? Money is tight so it is no surprise that there are plenty of domestic bells-only alarm systems in place today. What’s more, there is a trend towards anything with an app these days resulting in self-monitoring being a popular option. Recently a new service has come to the UK which could be an attractive choice for customers and an earner for installers.

RSPNDR is a Canadian company that formed four years ago but now supports over 200,000 properties and handled more than 50,000 call outs in the last year. The business sells through security providers including ADT, Chubb, Telus and installers and has already expanded into the US and recently brought its services to the UK and European markets.

The response service is of note to installers as it offers recurring revenue following the initial install and can be added to existing systems as we found out when we spoke to the company’s GM for Europe, Kevin Meagher:

Who are the people behind RSPNDR? The company founders and management team all have a security background, specifically with regard to running and managing guarding companies, but they also happen to be entrepreneurs. They understood the challenges of getting guards to a particular place within a reasonable timescale and cost. They saw how high false alarm rates meant the police would not react and felt that some of the security industry’s attempts to address this through stricter regulations on installations simply increased the cost and complexity of systems which in turn, choked sales. This is when the idea first came to life.

How does the system work? It is very simple; the easiest way to think about it is as Uber for manned guards! In essence we link into the software of alarm receiving centres so that when an alarm goes off and the alert goes to the monitoring station, the ARC can, with the simple press of a button, trigger a guard response. The second part of what we do is to manage a network of guard companies across the country (typically two or three guard companies covering any one patch) with all of their guards carrying our app. This allows us to see their location so when the alarm goes off, we can quickly identify the nearest guard and direct them straight to the property.

So does the installer sign the customer up? The channel to market for us is through ARCS to installers to customers. The installer would sell our services as an alternative to police or traditional keyholder response when the alarm is fitted and connected to the monitoring station, the installers simply tells the ARC that the customer has subscribed to the RSPNDR service.

What is the pricing model? We typically charge an installer less than £1 a week for a domestic customer and this covers two free call-outs. A small business would pay about £2/week. In essence, we operate an insurance model. Normally about 20% of professionally fitted alarms will trigger a need for response services every year so if everyone pays a small premium, these cover the likely claims. We think everyone wins with this new business model. It’s designed to make response services more affordable and expand the market. This in turn will give guard companies

Kevin Meagher of RSPNDR

“The installer would sell our services as an alternative to police or traditional keyholder response when the alarm is fitted and connected to the monitoring station”

INTERVIEW

“We think the priority should be to get a guard to the site as quickly as possible, find out if there is any evidence of a problem, and only get the keyholder if there is a need”

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access to new tasks, whilst monitoring stations and installers will generate new, recurring revenue streams.

Can ARCs not provide the same service? The problem that they would have in matching our service is in the building of the network and developing the technology to make it all happen on a national scale. The efficiency of traditional keyholding services depends on a particular guard company being available at the moment when the alarm goes off and access to the keys. This can delay responses and makes it costly. We think the priority should be to get a guard to the site as quickly as possible, find out if there is any evidence of a problem, and only get the keyholder if there is a need.

So speed of response is better? In Canada, our average response time over the rolling twelve months is 26 minutes. We are sure we can beat that in the UK so we are giving customers the guarantee that we will get on site within 30-minutes. There are some obvious geographical limitations and we recognise that there will inevitably be some occasions where traffic and event will conspire to thwart our efforts. We back the guarantee up with promise that the call-out is free if we don’t get there in the 30 minute window.

There are plenty of UK homes that don’t have monitored alarms or prefer bellsonly. How can we change this picture? I think this is a major problem for the industry. In my view, part of that is due to customers not being able to afford traditional response services and preferring to go with selfmonitoring on an app to keep costs down. However, if installers could offer an effective response service for just a few pounds a month it becomes more appealing than the traditional keyholding option. We've already seen this happen in Canada where we had a lot of customers who wouldn't otherwise buy monitoring of any sort. They like the comfort of a professional security officer coming around in a uniform driving a branded security van to check their house or business.

Do insurance companies have a role in developing alarm adoption? They do have a role, but I don’t think it will be in the way you might expect. In talking to insurers, they are not motivated by burglaries - their biggest losses are fire and flood related. Look at what ADT is doing in the US. They're shifting from professional systems to DIY in the domestic market and including water sensors, temperature sensors and fire sensors to help minimise the insured loss. The recent announcement that Google and State Farm are investing $1.5bn into ADT is further evidence of this trend. And I think this trend will be copied in the UK which is good news for us. We will be able to send a guard when a water leak is detected to switch off the water supply – not really a security alert but an incident that could be expensive for both the homeowner and their insurer.

How do you see the market evolving over the next year? I have two predictions. The first relates to the likely disruption in the legacy market and the second is tied to changing customer expectations and the need to deliver more value. The disruption with the removal of PSTN could be significant, because customers will need to upgrade their systems if they want them monitored. To bring them to full standard will be expensive and we think our new service will prove to be a better alternative as we do not have the same demands. The second prediction relates to customer expectations and how we can add value. We are building RSPNDR into apps so that customers can summon a response and just like Uber, the homeowner will be able to monitor their progress and receive messages to let them know the situation. This will add a new dimension to the offering that installers can present to their customers and goes beyond traditional security services into areas such as insurance, repairs and maintenance.