Developing a sustainable video security distribution model in a market dominated by low margins and competition on price – that’s the goal behind CCTV Center’s new CCTV distribution venture, Nexus Connect.
It’s a new twist on installer partner programmes, schemes operated and controlled by manufacturers to build loyalty among integrators which generally involves a commitment from the installation company to buy a certain value of product solely from that manufacturer.
In the case of Nexus Connect, however, the distributor takes a central position between the manufacturers (more than one) and the integrators/installers and justifies the position on the basis that it manages sales leads for the benefit of all involved and provides technical expertise to the integrators.
The Nexus Connect proposition is straightforward enough: selected manufacturers (VMS firm SeeTec, camera firms Sony, JVC, Panasonic, FLIR, and Videotec, along with ancillary products when required) provide equipment and training to a limited number (16 being the target) of independent, small to medium sized integrators through Nexus Connect; the integrators in turn work with Nexus Connect to design a tailored security system for the end user. The integrator installs the system, and Nexus Connect guarantees it will work.[youtube]http://www.youtube.com/watch?v=6zNGomxE8Cc[/youtube]
Video: Bob Tate, director of the Center Group, explains the concept behind Nexus Connect
The aim is to shift competition for contracts away from focussing solely on price and more toward a value proposition which balances price against quality.
Bob Tate, who heads up the Nexus Connect division, puts it simply: “The traditional route to market is a bloodbath, ultimately, on price. With Nexus we want to add value at every stage of the chain – for the manufacturer, for the integrator, and most importantly, for the end user, which is the best way to ensure repeat business.”
The key, he says, is transparency and honesty. “We are being completely upfront with our partners about what we expect them to bring to the scheme: the manufacturers will provide priority pricing, training and marketing support, the integrators agree to take part in that training and to a business plan with Nexus Connect.
“All partners will have a named individual who is the main point of contact for the programme. We will coordinate the lead management scheme, so that the sales leads we receive are passed on to the most suitable integrator partner for the job.
“The aim is simple – we want to create more business opportunities for integrators, because that in turn means more business for both our manufacturers and Nexus Connect. And the best way to do that is to build a reputation for providing high quality systems.”
History repeating itself?
Andy Coombes, Phil Campbell, and Tim Cocks and Jeremy Cocks started CCTV Warehouse, a traditional-style CCTV distribution company, in 1984. This grew to become the second biggest UK security distributor after Norbain, and in 1994, Norbain bought CCTV Warehouse.
Part of the condition of CCTV Warehouse’s sale was that it was not able to trade in the UK for five years; but it retained its export business, which was strong at the time. This enabled Coombes, Campbell and Tim Cocks to establish CCTV Center distribution businesses in Spain and France. While the French operation eventually closed, the Spanish CCTV Center (now a separate entity to the UK operation) is currently the biggest independent distributor in that country’s security market.
CCTV Center UK was established in 2000, and traded as a general multi-brand security distributor up to 2004, when the decision was made to become a Panasonic-only distribution company. CCTV Center became, over time, more entrenched in IP video, and encouraged installers to move from analogue to IP – between 2007 and 2012 its customers buying IP-based Panasonic equipment increased from 10 per cent of sales to 85 per cent.
And after becoming a single-brand Panasonic distributor, CCTV Center moved from the ‘box-shifting’ distribution model to a more projects and solutions-based business – with 80-90 per cent of its sales going to projects where its technical team had helped with system design and specification.
But with economic downturn and recession came more difficult trading conditions, as evidenced by Norbain’s 2012 pre-pack administration and sale.
“As a single brand distributor, it works if you’ve got the backing of the manufacturer,” Coombes said. “But as everyone started to struggle, it started not working for us.
“And in 2012, we were finding that the move to VMS-based solutions were on the increase. So if we wanted to provide Panasonic cameras via VMS, we didn’t really have an offering.”
But what they did have was an opportunity with SeeTec, a German video management system that dominates its home market and is in the top two in the majority of European countries. SeeTec, as it turned out, was looking to launch a UK business – so the timing was ideal.
Tate says there are 37 integrators which Nexus connect will be targeting as potential partners, but that it would welcome approaches from others that may fit the criteria.
“They’re medium-sized, multi-disciplined, independent companies, obviously moving to IP, and with an awareness of the importance of green issues,” he says. “But most importantly, they embrace our ‘soft values’ – the understand the benefits of partnership, they’re forward thinking, and they are committed to the scheme.
“That could mean, potentially that they come from outside the CCTV industry – possibly from an IT background.”
The plan is for the integrator partners to be relatively complementary, in terms of UK geographical coverage and vertical market coverage, reducing the potential for conflicts within the scheme, but Tate and Coombes are aware that their trust in the way the lead management scheme is run will be important in this aspect.
Coombes says: “These integrators are grown up – they know that there will be some competition, but we also know that if we bring them business, they will be loyal.”
CCTV Center is now Center Group (which has always been the company’s name, though it had only ever traded under the CCTV Center banner), and is comprised of the Nexus Connect division and the CCTV Center division, which will continue to sell products in the more traditional distribution fashion.
For the foreseeable future, though, Center Group says its focus is firmly on Nexus Connect and its sustainable distribution concept.