As the former owner of a successful security guard company, with two decades of security industry experience, I’ve navigated numerous industry challenges. One of the trickiest situations is managing client resistance to annual billing rate increases. With operational costs like wage rates, insurance, taxes, and inflation on the rise, these increases are often unavoidable. In this article, I’ll dig into effective strategies for addressing this sensitive topic with your clients.
Understanding Security Guard Company Client Concerns
Engaging with clients early and often is the first crucial step in obtaining a billing rate increase. Regular, personalized visits by either you, the owner, or a senior account manager are essential. These visits aren’t just courtesy calls; they’re opportunities to assess the company’s performance from the client’s perspective and to build trust.
When clients know that their voices are heard and their business valued, they are more likely to be receptive to discussions about rate increases. It’s even more crucial to create a partnership where both parties understand and respect each other’s business needs. It’s much more difficult for your client to say no if they are receiving good service and have a good relationship with the management team.
Tackling Cash Flow Issues
A novel approach that was recently shared with me that has worked, is offering clients the option to switch to weekly payments rather than taking the price increase. Although this does not get the rate increase that you desire, it does improve your company’s cash flow, allowing for better management of wages and operational costs. As a result, you also stabilize the company’s financial health, ensuring that you can continue providing top-notch services.
Addressing Security Guard Company Cost Drivers
Transparency is key when discussing rate increases. Clients need to understand why these increases are necessary. Detailed explanations about rising wage rates, insurance costs, and other operational expenses create a clear picture. It’s also important to highlight how these costs directly impact the quality of service they receive.
For instance, higher wages contribute to better staff retention and training, directly translating to more reliable and effective service. Additionally, I’m sure that your clients are experiencing the same wage pressures and are more likely to understand your needs in today’s job market.
Exploring Alternative Solutions
When resistance is particularly strong, it might be wise to propose alternative solutions. With the advent of technology, options like remote camera monitoring or even robotic security can offer cost-effective alternatives to traditional manned guarding. These innovations not only help in cutting costs but also showcase your company’s thought leadership and embrace of new technologies. However, it’s crucial to assess whether such alternatives align with the client’s security needs and expectations.
Security Guard Industry Trends Impact
The current industry challenge of finding qualified security guards, due to competitive wages in other sectors, is a significant factor in driving rate increases. Explaining this industry-wide trend helps clients understand that rate increases are not just about your company’s profitability but about sustaining the quality of the workforce in a competitive market. This broader perspective often helps in rationalizing the rate increase to clients. If you are using tools like OfficerBilling.com, providing your customers with a detailed cost analysis will also bode well and make the conversation much easier.
Navigating billing rate increases with clients requires a combination of good relationship management, transparent communication, and innovative problem-solving. It’s about fostering a partnership that goes beyond a mere service agreement. Your aim should be to ensure clients understand the value they receive and the real costs of providing high-quality security services.
In an industry as dynamic as ours, adapting to change while maintaining strong client relationships is the key to long-term success.
By Courtney Sparkman
OfficerReports.com is a software company that provides security guard companies with an easy way to monitor their officers, better manage their operations, and win new business. Take a tour of our software to see how we combine Electronic Reporting, Real-Time GPS-based Tour Tracking, and GPS-based Clock In and Out into one easy-to-use platform.
