This is the continuation of the Transform Your Security Company series. Please jump to the first or second post through the links below or continue on…
Target Higher Margin Services
Have you considered and weighed which security services you offer that could bring your business greater stability and profitability? How accessible are those services? Are you licensed and prepared to offer them? Some states allow armed security services and even arrest rights that can help you target security needs at a higher premium. Municipal budgets for law-enforcement haven’t fared well in the last decade**, which has seen a corresponding increase in the demand for supplemental and alternative approaches to law-enforcement. This can be a prime opportunity for you to leverage such needs into lasting contracts at a higher margin than some of your other service offerings.
Another way you can increase your margins is by targeting your existing higher margin services and maximizing the profitability within each segment through efficiency. As you target these services, think about how you can improve the profitability of them. Can you sell more accounts to increase the density of service on a per-region basis? As mentioned in the second installment of this series, that will reduce the travel and maintenance costs required to service those locations. It will also help you define regions that should geographically be separate from one another. Again, you don’t want people from one region spending non-billable time traveling between service areas if you can avoid it. If there’s a long expanse due to a body of water or a mountain range, try and separate them out into regions that won’t require as much travel between them. Once you do this, make sure to fill in the gaps within each region to further mitigate interregional travel costs.
If you can’t eliminate travel time between far-flung service locations, sell intermediary accounts to make up the difference. Be prepared to diversify your service offerings to accomplish this. If you focus heavily on property management and apartment complexes, try and expand to commercial real-estate, educational and financial institutions, corporate security, and retail. This will help you increase the density of your regions, and the visibility of your brand and service. Consider taking on some loss-leader accounts that while maybe not profitable themselves, can reduce the cost of doing business at your other, more profitable locations just around the corner. Adding to that point, consider offering some loss-leader services that can hook new clients and convince them to switch to your service. Be prepared to take that loss in the short term. A great example of this is lighting assessments and one or two weeks of free service! That might sound like lunacy, and your potential new customers may object, but don’t forget to mention that doubling their security presence for free won’t hurt. Be prepared to impress should they take you up on your offer, during the trial period… and after they switch to your similarly priced but superior service.
Furthermore, think about seasonal work that can help you plug the holes in your schedule. Event security can carry higher margins than recurring contract security work, as can executive protection. These kinds of offerings are not as consistent and ongoing as some other services, but they can boost your presence, establish you as a leader in your marketplace, and ultimately increase your profitability.
Finally, invest in some really good account executives. Make sure they’re personable, funny, engaging, and that they really care about your customers. Nothing builds marketshare faster than quality service with people that are fun to do business with. The white-glove treatment is always a good investment as long as you’re increasing customer loyalty and promoting good word-of-mouth (which is an unbeatable marketing tool).
Consider offering some loss-leader services that can hook new clients and convince them to switch to your service.
Systems matter. Meaningful and actionable processes can bring overview and insight into your operations, your staff, and the people that make up your business. Be proactive with putting those systems in place, measuring performance on a routine basis, and taking action when necessary. Do this, and you can make a lasting and positive difference in your company.