Summer sales: If you can’t beat ‘em, join ‘em
LANCASTER, Pa.—Select Security, a super-regional based here, facing competition from big national summer-model companies, tried an experiment this past summer doing what the big boys do.
Tired of seeing out-of-state companies bring in their college-student summer sales staff to sell alarm systems in his backyard, Select Security owner Patrick Egan went to Utah, where most of the summer model companies are based. There, he recruited his own sales staff of college students to go door-knocking for him from June 15 to Aug. 15 on Select Security’s home turf.
Overall, the eight-week experiment was so successful that he’s planning to replicate it in the summer of 2011—with even more salespeople, Egan said.
“It worked and we’re doing it again,” he told Security Systems News this week.
The experiment did have some drawbacks, Egan admitted. Among them, he said, was “the sales drama.”
For example, he not only had to find housing for his young eight-member sales staff and help them move in, but had to referee roommate squabbles when a couple of them announced they didn’t want to live together.
Egan also lost two saleswomen when they went to a Mormon church in Philadelphia one Sunday—and got recruited by another company. “They spent the rest of the summer selling for [someone else],” he said.
Still, he said the door-knocking sales blitz brought Select Security 200 more customers. The company sold only to qualified homeowners whose average credit score was 740, he said. They all have five-year contracts, so Egan estimates that will result in more than $500,000 in positive cash flow over 7.7 years.
He’s in the process now of recruiting even more college sales staff to have five sales teams this summer instead of one, and hopes to increase sales in the summer of 2011 by fivefold—to 1,000 systems.
“We’re a conventional company that took an unconventional approach,” Egan told SSN.
He also described the experience to other dealers on Nov. 12 at the Honeywell First Alert Professionals Convention in Boca Raton, Fla. It was among sales approaches Egan discussed in a seminar entitled: The Best Defense is Often an Excellent Offense.
Egan said he noticed two years ago that the big summer model companies had come to this city of about 56,000 people. As he drove to work one morning, he saw they’d planted their yard signs right across from his company’s headquarters here.
“And I’m realizing that clearly the summer sales program is having an impact even on a small city like Lancaster, Pennsylvania,” said Egan, who described his 12-year-old company with about 100 employees as a major provider for the numerous small towns it serves in the state. “So that’s why I decided to see if I could adopt the good things out of summer sales, leave out the bad things and see if it would work for a conventional company.”
He went to Utah last winter to recruit.
He didn’t want to try to turn his own sales team into door-knockers. “Don’t waste your time,” Egan said. “You’ve got to have people who are seasoned and know how to do that.”
He said the pay plan is key because the students want to earn as much as they can. Select Security used a simple commission-only, point-based system, he said. His top salesman made about $28,000 in eight weeks, Egan calculated.
More than 15 percent of all alarm accounts sold nationwide last year were generated by door-knocking, according to study completed this year by Barnes Associates, an investment banking firm specializing in the security industry, in collaboration with Security Systems News.
Some of the big summer model companies have faced legal complaints about their sales staff in various states. The charges range from using unethical sales techniques to not having proper licenses.
Egan said he took care to avoid such situations because Select Security is known and respected in the markets the summer staff sold in and he didn’t want to jeopardize that reputation.
He said he required his sales staff to get their own solicitation permits, and not to use hard-sell techniques. He also provided his own installers and tech support, telling the salespeople, “You do what you do best: sell.”
One satisfied customer was Jonathan Ober of Lancaster, who said his family had already been considering a home security system and Select Security’s door-knocking 20-something salesman clinched the deal. “The salesman was very informative and didn’t try to hassle us or try and sell false, grandiose ideas,” Ober said in an email interview. “He knew the product and what kind of service we would get.”
At Egan’s talk at the FAP convention, dealers peppered him with questions about the experiment.
One who listened to the presentation was John Loud, president of Loud Security Systems in Kennesaw, Ga.
Loud said it was very interesting to learn about Egan’s experience but he’s not sure it would work for his company. “I don’t know if I saw enough financial uptick to counter the risks and struggles,” Loud said.
He said he’ll be curious to see the results Egan gets in 2011 as he continues the program. “I think it’s something that I’ll let Patrick Egan lead the way on a little longer,” Loud said.