ADT lays out strategic plan to overhaul service to the small business market sector

It is often said that America’s small businesses are the engine that power the nation’s economy. But it is no secret that small businesses are also one of the most underserved sectors when it comes to the security market. That is about to change says Luis Orbegoso, president of the Small Business Unit for ADT.

ADT is looking to parlay the results of a just released security survey highlighting the major security concerns of America’s small and medium-sized business community into one the most comprehensive outreach initiatives the industry has ever undertaken. The study, conducted online by Harris Poll and commissioned by ADT, surveyed 712 small business owners of retail stores in January and found that theft of merchandise by customers (79 percent), vandalism (66 percent), break-ins (64 percent) and online security (58 percent) were the top pain points and concerns for retailers. According to Orbegoso, the survey findings only reinforced ADT’s suspicions that the small and medium-sized business segment lacked the internal resources to meet the challenges they face.

“There are differences in what our residential customers need as far as security and what the needs of small businesses are. The expectations of businesses are quite different.  Yet even the differences among various small business sectors are different, and that was our biggest challenge,” Orbegoso says. “The first thing we did was research our installed base. We have more than 400,000 small business customers. So by taking a look at these customers we were able to segment them into the appropriate verticals and ask ourselves the questions – what do they look like, what configurations do they have, what do they pay a month in security systems fees, what type of solutions sets are they looking for?

“Take, for example, a clinic, which is concerned with keeping its prescription medicine secure and being prepared for audits. Compare those needs to a retail store where it is all about reducing shrink and stopping shoplifting, and implementing the processes to create those controls. The solution sets need to be different and the education requirements are different. The fact that we have so many customers in our installed base provides us the insights and visibility to understand what is important to retailers, compared to a quick-service restaurant, compared to a clinic, compared to a tax service office,” adds Orbegoso.

The survey states that small business retailers who said they did not feel their businesses were secure or found that their security measures were less than effective were more likely to have between 10-24 employees, earn between $1 million - $2.5 million in revenue annually, hire seasonal employees, and screen those seasonal employees in-house. Additionally, those who felt their businesses were not secure and their measures were not effective were more likely to say their productivity suffered during the holiday season.

With ADT now focused on this sweet spot within the small business community, the first task according to Orbegoso, was to research its installed base of customers. The process began with segmenting the business sectors into control groups that aligned similar risk and needs. ADT’s initial segmentation research identified more than 20 different segmented markets. Realizing that was not a realistic service market, the research team began to aggregate the risk similarities among the various verticals to create a more manageable process.

“For example, there are a lot of similarities between a tax office and a lawyer’s office when you begin to assess the need for customer privacy and protecting client information. Digital security is as important, if not more so, than just physical security for this group. In a retail setting you have myriad stores selling thousands of different items, but the security concerns are usually the same. It is all about shrinkage, so they probably need a video surveillance solution to deter potential shoplifters,” says Orbegoso.  “There was a lot of work and plenty of analysis that went into identifying what the key verticals were based on company needs, and I think we have a very good understanding of what they are.”

The ADT survey findings support the company’s new approach to delivering bundled small business solutions that directly address the needs of specific industries. The newly released ADT Retail Solutions Bundle is the first of the offerings, and delivers a package of relevant security and automation resources for retail small business owners, including: front and back door access and supervision, stock room security, 24/7 video surveillance from the store floor, and temperature, lighting and small appliance control from any web-enabled device.

ADT has segmented its target small business markets into five major verticals to include:

• Retail
• Food and beverage sector or quick service restaurants
• Clinical segments to include vet offices, outpatient centers, dentist offices
• Mechanical and automotive  to include automotive oil change centers and gas stations
• Professional services to include lawyers, CPAs, etc.

“Now that we have identified the right segments, how do we develop the right tools and properly train the sales forces to be perceived as consultants and not just someone trying to throw a solution at the problem?  Before we launched the retail bundle, we spent four months developing the sales material, training our sales forces and making sure they understood what a retail store looked like, what the clients’ main concerns were, and how you conducted a proper business-risk assessment for the client,” Orbegoso says. “We want to be able to hit on the points that resonate with our clients.”

The Retail Solutions Bundle offers capabilities to help manage and protect small business retail environments including:

• ADT Pulse Interactive Business Solutions: ADT Pulse helps small business owners remotely monitor and control their business, from arming/disarming the alarm system to changing the temperature and turning the lights on and off. With Pulse, business owners can also schedule notifications via text or email when specific activities take place in their store – from a delivery arrival to activity in the stockroom.
• Intrusion Detection:  With intrusion detection, ADT delivers wireless connectivity options to help protect the business owner, employees, inventory and the physical premise of the storefront. Solutions include door and window security, a motion detector and hold-up/panic buttons for threatening situations. In the unfortunate event that an intruder breaks in after business hours, customers can rely on ADT’s 24/7 monitoring to be there when a business owner needs it.
• Video Surveillance: Video surveillance offers digital video recording that monitors activity throughout the store – from foot traffic in specific areas of the business, to employees coming and going from the front and back doors, or transactions at the cash register. With video surveillance solutions, ADT offers business owners an extra set of eyes, to help monitor in multiple locations at once.

However, security is not the only motivator. Integrating the business and operations management tools into the small business kit is also a prime concern.

“One of the biggest headaches for these retail business owners is scheduling. If you own three or four stores, making sure you have employees there to open them on time or that they don’t close early, are critical issues that can impact the success of the business,” says Orbegoso. “We have technology to integrate proactive alerts through motion detectors, video analytics, and through Pulse that will not only drive a higher degree of security for our customers, but also drive some of these higher level business management efficiencies, as well by leveraging these technologies.”

Orbegoso readily admits that the ADT endgame is looking to expand beyond basic security. The roadmap his unit has laid out encompasses an entire strategy that brings in the same capabilities as some of the nation’s largest retailers to the small business environment. It is all about economy of scale.

“There are two key factors we’re faced with. One, how to we make sure to offer the solution that is just right – not too much, not too little. But our greater vision is how we take the capabilities of a Target or a Walmart that use things like analytics to not only drive security, but also help them analyze customer flow and identify optimum merchandise placement in their own stories. We can bring these capabilities to the masses.

“Our initial approach is to take our existing products and position and configure them in ways that make the most sense for our customers. We can do that by leveraging the knowledge we have in house and from our small business customer base. The next stage is determining how we can leverage our platform to drive operational efficiencies. There are a lot of things happening behind the scenes helping us create this program,” adds Orbegoso, referring to the recent partnership with McAfee. “A lot of the things we are doing now are providing us the opportunity to lay the ground work for an ecosystem that may have security as its core, but that can also drive a lot more value for our customers going forward.”

He also hints that ADT could be entering into more non-conventional technology partnerships in the very near future that will expand the vision of this SMB program. The eventual plan seems to be movement to a full cloud-based environment. The large box stores have the budgets and capacity to employ multiple technologies for both security and business function. Because of the ADT footprint, it can provide similar services to a much smaller client by leveraging its strategic partnerships with multiple vendors in various disciplines, its diversified infrastructure and internal expertise.

“The goal is to leverage technology to drive more value add that leads to more revenue. We can use analytics to see how many additional people come into your store as a result of a dedicated promotion. We can use video analytics and heat mapping to see where their customers spent their time in the store and what types of products they are purchasing through point-of-sale integration. Everything here is something the Walmarts and the Targets do today and none of it is rocket science. All the technology is available,” says Orbegoso.

 “We are the only company that can pull all the necessary technologies and partnerships together to provide this opportunity to the SMB community. We are extremely excited about the future,” Orbegoso concludes.

About the Survey:

This survey was conducted online within the United States between January 17 and 29, 2014 among 721 small business owners of retail stores with less than 100 employees and with annual revenue of less than $5 million by Harris Poll on behalf of ADT. Figures for employee size were weighted where necessary to bring them into line with their actual proportions in the population. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology (including weighting variables) please contact [email protected]