A MEETING OF THE MINDS

Jan 1, 2002 12:00 PM, By JAN RABINOWITZ

How well do security industry suppliers know their customers? To find out, Access Control & Security Systems magazine surveyed both groups. The results shed light on the interaction of customers and suppliers on the front lines of our industry.

The suppliers we heard from are familiar names in the industry. Two-thirds of them are involved in access control products, half in CCTV, over a third in photo ID/badging, and nearly three in ten are involved in alarm systems and/or centralized monitoring/integrated systems. They also include manufacturers of electronic locks (19%), computer/network/data security (22%) and other security products (21%). (Some supply multiple product categories.)

The end-user respondents included 116 companies in the Fortune 1000 (56%).

WHERE IS THE BUYING DECISION MADE?

About half of the users who took our survey (48%) say the buying decisions at their organizations are made at the corporate level, while a slightly greater percentage of suppliers think it is so. Another four in ten users say the decision is made at the individual location or on a department basis. Half as many suppliers anticipated those responses, and the same number did not venture a guess as to where the decisions are made.

While similar percentages of users and suppliers say the security manager or director is one of the decision-makers (51% and 57%), twice as many suppliers as users believe that the president/owner is also involved in the decision (67% vs. 33%). Suppliers are also much more likely than users to indicate that an IT director/network administrator or systems integrator are involved in the decision-making process (45% and 60% vs. 11% and 6%). These results suggest that suppliers view the buying process as being more corporate-based or committee-driven than the users say it is.

Just over half of the end-users we surveyed (52%) told us that they have standardized brands or suppliers for their security equipment needs. This is something that a similar percentage of suppliers know - 54% of them said their customers have standardized brands/suppliers.

PICKING A SUPPLIER

What criteria do users employ when choosing a supplier? Service after the sale is the most important criterion, users and suppliers agree. Users also rate availability of parts as key to the supplier-selection process, although suppliers did not rank it as highly. Suppliers rated representation by a dependable dealer as second in importance; users ranked it as third. Both groups of respondents rated reliability of equipment as the most important issue facing the industry, while clearly viewing its impact on supplier selection from opposite sides. Related to the equipment issues is the need for training. Suppliers chose training in the use of equipment as the number one area of training that security employees need. Users displayed a less equipment-centric response, ranking such training fourth, after security procedures (both advanced and basic) and dealing with customers. Users rated the availability of training as very important in selecting a supplier, although it ranked only fifth out of the eight criteria listed on the survey. Perhaps providing additional training represents an opportunity for suppliers to distinguish themselves in the marketplace.

VALUE OF THE EQUIPMENT

In ranking various security system components, users and suppliers are generally in agreement. Both groups chose CCTV/surveillance as “offering the most value,” “being easiest to integrate,” and “providing the fastest ROI.” Suppliers responded that their customers would find electronic access control slightly more useful than CCTV/surveillance (34% vs. 31%), while the reality among users showed only a slight preference for CCTV/surveillance (17% vs. 15%).

Do the users believe the industry is meeting their equipment needs? How well do the suppliers think they are meeting customers' needs? Perhaps surprisingly, users are fairly satisfied and suppliers know it. The survey limited suppliers to rating only the areas they are involved in. Users say their alarm system needs are most likely to be met, while centralized monitoring/integrated system needs are least likely to be met. However, suppliers say their customers' needs are being met in both areas (4.71 on a 6-point scale and 4.21, respectively). Suppliers of electronic locks rate their technology highest in meeting customers' needs (4.80), while suppliers of computer/network/data security rate theirs the lowest (3.92). While the ratings were all fairly close, users' top-rated product segments were suppliers' lowest-rated segments.

LOYALTY TO SUPPLIERS

Because the security industry generally appears to be performing up to expectations, most users say they will consider continuing to use the same suppliers when upgrading their equipment. Only one in three users say they may not consider a current supplier for an upgrade. Suppliers overestimated customer satisfaction, however: More than 90% responded that their customers would consider them for future upgrades.

EFFECTS OF THE ECONOMY

Suppliers' optimism was evident when they evaluated the economy's effect on security equipment spending and the outlook for 2002. Twice as many users as suppliers indicated that the economy has caused a dramatic cut in spending (21% vs. 9%), although the largest segment of both groups of respondents has seen spending cut only somewhat (41% users, 48% suppliers).

Some 22% of suppliers say that the economy has had a positive effect on their customer. Only 8% of users indicated that their spending has increased, however.

LOOKING AHEAD TO 2002

What about this year? Most users (48%) indicate that 2002 will not bring much change in the way of spending. A whopping 71% of suppliers are wearing rose-colored glasses: They believe their customers plan to increase spending.

Asking suppliers about trends they see among their customers can provide insight from the front lines of the security marketplace. Suppliers recognize that one of the biggest changes their customers have seen is an expansion of their roles in their organizations. Suppliers overestimate the number of security professionals whose jobs have become more technical/technology-based (69% vs. 41%), and perhaps believe that professionals' positions have changed more than they actually have the last few years. More than one in ten users indicates that their position has had little or no change, compared to a negligible number of suppliers (13% vs. 2%).

However, in the all-important area of money, only half as many suppliers recognize the budget crunch that exists for their security customers. Only 17% of suppliers noted that their customers are having to do “more with less.” Some 35% of users say it is so.

FOR THE RECORD

METHODOLOGY

End-user research results are based on a 9 percent response rate to a mail survey of 2,400 subscribers in October 2001. A separate survey was sent to 469 manufacturer/suppliers from our subscriber list, with a response rate of 12.5%.

ABOUT THE AUTHOR

Jan Rabinowitz is a senior research manager for Primedia Business Magazines and Media, publisher of Access Control & Security Systems.

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