Manufacturers Selling Direct

The security industry has been notorious for always working through the ever reliable "channel". No matter if it's through your typical Security Integrator, VAR, Distribution Channel, OEM, or something else, the partner model has always been the go-to approach for Manufacturers to get their feet wet in the market. And can you blame them? If the partner already has the relationship established with the end user, understands the procurement path/budget cycle, and has familiarity with the client's infrastructure, it only makes sense to use them. While this model may still be prominent in the industry, there has been a shift brewing recently with Manufacturers cutting out the middleman and going direct. Cue the "double edge sword".

For those clients who have never been to ISC West or any other industry event, the first thing you will notice on the showroom floor are the hundreds of Manufacturers and their pop-up displays, banners, lights, and crazy configurations to lure you into their booth. Let's say you enter a Manufacturer's booth; you begin to receive that "golden" sales pitch, and you say to yourself "this is exactly what I have been looking for". Your next question may be "How do I purchase this?" or "How is this solution installed?". The Manufacturer then begins to tell you that you can purchase their solution through one of their "premier" channel partners such as a Convergint, JCI, ADT, Siemens, etc. After making the decision to move forward, you decide that you do not want to pay the unnecessary markup percentage from the partner. Maybe, you already have a team internally that could handle the deployment of the solution themselves. You then begin to make your plea to the Manufacturer that you would much rather deal directly with them. The Manufacturer then responds and says that "the channel is the only way we distribute our products/solutions". So, what now?

While this response may not be true for all Manufacturers, here's my point. The year is 2022. The typical "box sale" of Cameras, VMS, and ACS systems are no longer relevant. While advancements have been made to those systems, the average person can watch a YouTube video on how to install a camera, rack a server, or configure a mercury panel. “But Taylor, what about the certifications or license(s) you need to install such systems?” (More on this later).

Since its inception and especially since 9/11 & COVID19, the security industry has evolved tremendously. We have seen an uptick in emerging technologies such as A.I/Computer Vision, LiDAR, Sound Intelligence, Cloud, SaaS, and various other innovations that are reshaping the way we face challenges. I have seen end users adopt this tech faster than the channel even learning about it. Is there a generational disconnect? Maybe it's a productivity thing? To play devil’s advocate and to all the channel partners currently reading this article, yes, there are pros with Manufacturers going through you. For example, the channel has an established presence already in the industry. Thus, allowing for the deployments of Manufacturer’s products to happen at a much faster scale. In addition, the level of direct support needed to handle an end user can be easier if Manufacturers lack coverage in certain areas of the country or if they simply do not have the bandwidth to deal with an end user’s requests/needs. However, I strongly believe that legacy decisions and previous generations have dictated a Manufacturer’s GTM strategy for so long that if it were to change, there would be a “ripple effect” with channel partners. And while the channel approach may still be effective our industry, there are many reasons why Manufacturers are exploring a direct sales approach to the end user.

The first is Product. As I referred to earlier, with the advancements of new technologies in the industry, I often hear Manufacturers speak about how easy it is to deploy their product/solution. If it is in fact, “easy”, why is it still a necessity to route the integration through a channel partner? If we’re talking about something that is structural or requires architectural support, sure, a channel partner may make more sense. But I would also argue that a Manufacturer could offer that too. I have seen many Manufacturers build out “Professional Service” teams to where they are essentially performing the actions of an integrator. Including taking the time to secure the certifications and licenses required to handle deployments from A to Z. While this may be an uncommon approach in our industry, it is not impossible for Manufacturers to do.

The second reason is Control. Let's face it, no matter how strong of a relationship a Manufacturer may have with a partner, they're never the partner's #1 priority to sell. However, when a Manufacturer goes direct, they have full control of the sales cycle. No longer are the days of hearing partners say, “this is my customer, and you have to work through me”. If a Manufacturer puts in the work to go direct, their revenue goals become attainable versus unreachable, they improve in all areas of forecasting/projections, and their entire team now has a clear understanding of any challenges or unforeseen hurdles that they must get through to solidify and sustain an end user. Cue the sales methodologies…. (MEDDPICC, Challenger, Dale Carnegie, etc.)

And finally, the third reason is Cost. For the Manufacturers that do go through the channel, do you have full transparency into what your clients pay for your solution? Do your channel partners inform you of how much markup they are offering to the client? Let’s say you have that knowledge. How much meat are you leaving on the bone? Are your clients paying too much? When a Manufacturer goes direct, rapport, trust, and loyalty significantly increase between them and the end user. Any discrepancy on cost is eliminated and you're less likely to lose the client because of the transparency in your actions. And as a good friend of mine once told me “People buy from people but more importantly, People buy from people that they trust”.

There's a lesson to be learned here. While there are both pros & cons with going direct vs through a channel, I believe the decision should always reside on the end user's shoulders. Let them be the ones who decide which path to procurement makes the most sense for them. The channel will counter that statement but the next time you're in front of an end user, ask them what they prefer. A few end users that personally come to mind when speaking about a direct sales approach are Eddy Collier of MGM International, Bill Mathis of Mercedes Benz, Josh & John of Cherokee Nation, and Cpt Francis of Seminole County. A common theme that these gentlemen all share is that they are tired of paying for a service that they could have done themselves. In addition, they all tell me that they would much rather have a direct relationship with the Manufacturer no matter the product or service being offered. That way, they can avoid any confusion, delays, or miscommunication that may arise.

At the end of the day, our job in this industry is to simply educate, nothing else. While going through a partner may still be necessary for some end users, we’re seeing a shift in the way many others feel about it. And if given the opportunity, I believe that you will start to see more and more end users favor this approach moving forward. This is the way.?