THE ROI STORY

Many dealers are worried about the possibility of a recession and its impact on their sales efforts. For as long as I can remember I have heard dealers lament that customers (primarily retailers) just do not understand the true Return On Investment (ROI) of a surveillance system.

Most dealers have well prepared and thought out arguments about how much a retailer can save on shrink reduction. They throw out scary statistics about the impact of internal theft and vendor theft, complete with industry percentages and reports used to calculate what the retailer’s likely losses are. They then switch to liability mitigation (like slip and falls) and try to hammer hard numbers that can be saved due to investing in surveillance. Lastly, they might even throw in a few bucks that can be saved on insurance. All together it seems like a no-brainer to the dealer. The payback appears to be significant, but the customer doesn’t bite. It’s not enough. It’s too intangible.

Retailers understand where their money comes from. It comes from their customers. Retailers understand where they their spend money. It’s on wages, goods and overhead. This is the real financial world where the retailer lives.

Certainly they understand that theft and liability can impact the bottom line, but the challenge of ROI relating to video surveillance are two-fold. One is that theft can be mitigated in a variety of ways. Video simply helps their mitigation strategy and therefore becomes a desire instead of a direct need. Secondly, liability is a risk issue. It might happen, it might not happen.

Retailers, like any business, are faced with limited resources and therefore must prioritize. They understand that spending more on providing a quality customer experience directly leads to more cash. They understand that putting in systems that can reduce labor directly leads to lower costs.

Surveillance cannot compete at the same priority level because it is simply a competing desire; something they know will help, but without the direct benefits that other expenses might lead to. So, more often than not it becomes a price shopping experience rather than a functionality shopping experience. If they can get it with pocket change they’ll do it, if not, in many cases they will keep shopping.

SELL WHAT THEY NEED

During these times of economic downturn dealers should stop and consider how the solutions they sell specifically address the basic and core needs of a business to drive revenues and reduce costs.

The good news is that for some time now manufacturers, including 3xLogic, have been designing value-added business intelligence applications built right into the surveillance system. These value-added features are intended to help manage the business in real-time, allowing retailers to be proactive instead of reactive. Systems today are designed to help retailers creatively address these key needs:

• Proactive, real-time management of the workforce including proper training, mitigation of negative incidents, and reduction in travel expenses.
• Real-time management of critical systems such as refrigeration, HVAC or even drive-thru lanes.
• Cost of goods control through management and reporting mechanisms, in addition to traditional loss prevention activities.
• Monitoring and management of the customer experience with strong mitigation and retraining capabilities.

The bottom line is that most dealers are still trying to sell Loss Prevention when there are much more effective and compelling reasons why a retailer should deploy a Video Management System. Not that LP isn’t important. It is important as part of an overall business management strategy, but by not giving your clients the full picture of what these solutions can do for them, you are not maximizing your sale potential nor are you providing the level of service to your client that you should.

Especially in this time of economic challenges, it becomes imperative that businesses (both the retailer and the dealer) understand how a correctly sold, deployed and utilized system can significantly contribute to the company’s revenues and cost reduction strategies.

The challenge for dealers is that they are great at what they do which is security and loss prevention. When it comes to addressing their clients other business needs … not so good. This leaves a large gap between what these multi-purpose solutions are capable of doing and what the client is presented with.

Dealers need strong partners that can help them tell the complete story. Dealers need strong partners that will help ensure that their customers are getting everything they can from these systems when they do make an investment.

If you don’t know one, I might be able to make a suggestion.