IFSS services revenue soars after business restructure

CEO Rob Hile says construction margins are in the mid-20s, services margins are between 40 and 70 percent
 - 
Thursday, June 6, 2013

FORT MYERS, Fla.—After restructuring Integrated Fire and Security Systems to “go after services business,” CEO Rob Hile said the company increased its services “by $155,000 or a total of 16 percent of our revenue, just by really focusing on it.”

IFSS is a 23-employee independent integrator based here. Hile outlined several components of his company’s services play. Hosted and managed applications are key to the strategy. Hile said that if IFSS is faced with two construction bid projects, one that has services and one that doesn’t, “we’re going to focus all of our efforts, as much as possible, on the one that has services.”

And if the company sees a specification for an analog system, IFSS will propose an IP-based system with services or a hosted or managed application.

“So we ignore what the customer is asking for and give them something that we feel is better,” Hile said. “Probably 30 or 40 percent of the time we get a call back to explain why we did that. And sometimes they’ll even scrap the initial RFP and give us an opportunity to bring in an IP-based system, sometimes even negotiated.”

The margins on IFSS’ services are impressive. “Our construction margins are in the mid-20s. Our services margins are 40, 50 sometimes even 70 percent,” he said.  

What’s the best way to get employees onboard?

IFSS doesn’t have salespeople per se, so all customer-facing employees who sell a services-based system receive commission on those sales. “Every one of them [gets a commission], technicians, project managers,” Hile said. “Across the board we incentivize our people to sell services.”

IFSS is planning to launch a new program where it will give all customer-facing employees an iPad or tablet so they can “show the customer the hosted and managed applications and the service module we have built for the company. [Potential customers] can actually see [and the employees] can show and demonstrate what some of the other customers are doing,” Hile said.

“Peer pressure is an amazing thing in the security industry,” he said.