7.16.24 – SSI – Morgan Hertel
Data is available for just about everything you do in your business, so much of it is never actually used to improve a business.
We hear a lot about data these days — and, actually, it can be overwhelming with what’s available to us.
But that is in the aggregate. On the ground level, data is extremely valuable in our everyday lives as business owners.
When I moved to Tennessee four-plus years ago, the local electrical co-op had the ability to transmit a variety of account-specific text messages. Among other things, I elected to get a daily text on how much electricity I had consumed and how much that consumption was going to cost me.
I am not one of those people who runs around and unplugs things that have green power lights on or who sets the air conditioning to a sweltering 90 degrees because I am cheap. However, being in the business I’ve been in for 40 years, I seek to understand what “normal” is, what changes might have occurred and what I should do about it.
When I see my electricity usage go up or down dramatically, whether it’s due to the weather or it’s attributable to other things, I pause and think of what might have changed. I also consider whether I need to be concerned about it.
For example, if usage jumps, I might consider whether a heater in my shop or in the kennels get left on or malfunctioned. If it drops, I might investigate whether the same heater failed, putting the dogs in danger of being too cold. (Don’t worry about the dogs. I have temperature sensors all over the place.)
Putting Data to Work
You get the idea: When data points shift, it allows me to adjust the settings or act — or, at the very least, understand why a huge, unexpected power bill arrives at the end of the month.
Now, fast forward to today. I have been working on a number of solar projects at the property, and I have been keenly aware of energy use — down to the circuit sometimes — to understand what’s normal and what’s not.
I use all this data to predict consumption and battery usage all year long. But what I really use it for is to help make decisions on products and services that better align with my goals.
I am not interested in dramatically changing my lifestyle or living like a hermit, but I do pay attention to consumption, efficiency and cost. As an example, in my home, approximately 20% of my electrical use was for heating water since we have no natural gas in the rural areas.
Twenty percent is a lot for hot water when you think about it. So, instead of doing without showers or clean clothes, I elected to swap out the two traditional electric water heaters for one larger heat-pump-based electric water heater. That changed the economics from an annual cost of $950 to about $50!
It’s an understatement to say that is a pretty significant change. But, without the data and knowledge, there is no way I would have ever guessed that I was using that much power on hot water.
Runs on Data
Today, our monitoring business runs on data. It is tracked in fractions of seconds and gives us huge advantages to ward off problems long before they become emergencies. In fact, using AI allows data to be analyzed as a normal baseline. So, when the heater is left on, so to speak, the AI will alert you. That’s far better than having to wade through thousands of datapoints an hour “by hand.”
Data is available for just about everything you do in your business, but I am always amazed at how much of that data is never actually used to improve a business. It’s a squandered opportunity to ward off problems before the bill comes at the end of the month, or before you suddenly realize that you lost $100,000 in recurring monthly revenue at the end of the year.
When you look at central station partners specifically, the ability to deliver actionable data varies. But here are some datapoints and how you can use them to help run your business. It’s information that more centers should be able to provide. These are in no particular order, and your mileage may vary relative to conditions.
Some Data Points
Account Churn: Understanding your churn rates is incredibly important, as accounts are the lifeblood of your organization. If you are losing more accounts than you are gaining, it’s a slow path to death. Before you know it, you’ll have lost a significant amount of company value and considerable monthly income.
Most alarm centers should be able to graph this out month over month and year over year based on alarm types, residential versus commercial versus PERs, and so on. If you’re armed with this data, you can focus on the so-called “blood loss” before it’s too late and it becomes a challenge to adjust your sales practices or your account-retention teams.
Alarm Clearance Rates: This is the percentage of alarm events that the monitoring center is able to clear without a dispatch. Most competent centers with good policies and technology should be able to get to the 90% range. That means that nine out of 10 alarms do not result in a dispatch.
Some may be asking why this is important. Well, it’s important because having false alarms is the number-one reason that alarm monitoring is canceled at the retail level. There are a number of studies, including those by Parks Associates, which support this basic concept: Reduce your false alarms, and you will reduce your cancellations.
Troubles, Low Battery and Other Low-Priority Events: These are similar to alarm clearance rates. When systems are generating lots of these types of events, they are another major reason for subscribers canceling.
It doesn’t take long before subscribers just say “enough is enough” when they’re fed up with calls, SMS text messages and beeping keypads. Those companies that are most vigilant in scheduling service calls are always among those who experience the smallest number of lost accounts. So, be proactive! Watch for trending problems with certain manufacturers and types of systems. Keep this under control.
The Last Example
Emergency Service Requests: The last example — but certainly not the last data point you need to track — is one that reflects how fast on-call staff responds to emergency service requests. We track the amount of time that an on-call service technician takes to respond to a help call.
You never see the online review on how fast they called, but you certainly see the ones that complain that it took hours to get help on the weekend, or that no help arrived at all. Those kinds of events can cost you a lot of money. The opposite, however, can get you meaningful referrals.
Over the 40-plus years that I have served in this industry, one of my mottos is this: “You can’t manage what you don’t measure.” This has never been more applicable than it is today. So, I encourage you to start managing what you’re doing by measuring what you’re doing. It doesn’t help to point your finger up in the air to see which direction the wind is blowing if it’s already so strong that it’s blowing you away.
About the Author
MORGAN HERTEL
Morgan Hertel is Vice President of Technology and Innovation for Rapid Response Monitoring.