The spin-off of Brink’s Home Security (BHS) from its parent, The Brink’s Co. (BCO), became official on Oct. 31. Now a separate publicly-traded company, BHS has up to three years to rebrand. BHS President and CEO Bob Allen discusses the future of the company and other topics.
How much change for the company do you foresee?
Nothing has fundamentally changed because of the spin-off. Our strategy remains the same. We have always been trying to grow our residential business. Over the last few years we have had a major push in the commercial monitoring business. We have been putting a lot of resources toward that, both developing products and services as well as human resources. Those two major growth plans will not change going forward.
How great of a challenge is the rebranding?
We do have three years to affect a transition to a new brand name. We think that is plenty of time and we think we have the resources to develop and launch a new brand that will be equally as powerful as Brink’s Home Security at the end of three years. We are a direct response marketer. We go to market nationally, so brand recognition and trust is very important to us. It’s is going to be a major focus of the organization moving forward.
Are your dealers concerned how the rebranding will affect future growth?
I think we have communicated with them pretty well that moving forward we are going to develop a brand that is equal to BHS and, in fact, over the next three years we are going be spending quite a bit more money on direct response marketing. We could be getting more sales leads in as we go through this rebranding process. Initially, the new brand name will piggyback with Brink’s Home Security in some fashion. We will be increasing our media weights across all media channels. We could very well see a lot more activity on the installation front, so that will be good news for dealers as well as the company.
Will you continue to expand commercial service offerings?
Over the last 4-5 years we have started to develop more products and services. We’ve added CCTV and DVRs, and access control. The biggest one we’re getting in to now is fire alarm monitoring. That is a little more complex. You are dealing with thousands of authority’s having jurisdiction. There is a lot more licensing, a lot more review of plans and permitting and inspections. We have been rolling that out on a regional basis to date and we continue to do that. We want to be national in small business and what we consider mid-market. We are differentially growing the commercial business through the first half of the year— the growth rate on commercial is about 10 points higher than our overall growth rate.
How is the housing crisis and the economy affecting the company?
Through the first half of the year — we have not released third quarter earnings yet — we have seen our subscriber growth slowing somewhat. We finished the first half of the year on subscriber growth at 8.2 percent, which I think is pretty good given the housing market downturn. Clearly the housing market is impacting us. We would prefer to have a rising tide; a strong housing market is good for everybody. It makes life a little more difficult in a housing decline. Again, we have a big advantage in that we are a national direct response marketer. We have a number of channels to go to market and our strong brand name has allowed us to continue to grow even with the housing market in decline through the first half of the year.
Are there opportunities with Brink’s for independent dealers?
You bet. Dealers have been a very important part of our growth strategy over this decade. We really didn’t start our dealer program until 1999 and since then it has grown very rapidly and allowed us to service everybody who is interested in a Brink’s Home Security system on a national basis, so we filled out our geography very well. In 2007, dealers were responsible for 20 percent of our installations, so it is very important to us. Again, brand name is important. Our ability to help give them sales leads that we get from our national marketing, as well as the brand equity, will be important while going through the rebranding process.
What will it be like to answering to shareholders?
We’ve always been proud of our results. We have always been pretty transparent in our accounting. If you look at the Brink’s Company’s [annual and quarterly reports] you can find out a lot about Brink’s Home Security. What excites us is now we will be center stage. We are front and center. The report card is up there under our CFL ticker symbol everyday and we get to report our quarterly results. We don’t mind the attention.
What is the inspiration behind the ticker symbol CFL?
Our internal mission statement is ‘creating customers for life.’ So the CFL stands for Customers for Life.
It’s assumed Brink’s Home Security will be an acquisition target. Is that something you are actively pursuing?
We are going to be an independent company and publically traded. We are for sale everyday. People can buy and sell our stock everyday. Are we more of an acquisition target now then when we were as part of BCO? Maybe. It’s hard to say. We have a great team here. We have a great strategy. We are getting great results. We don’t think about whether or not we’re going to get acquired tomorrow or five years from now or ever. We just go about our business.
Are you bringing in outside expertise to help ramp up your commercial business?
It’s a combination of grow your own as well as bring in new expertise. We have been very good at developing new programs internally. For example, our dealer program went from zero in 1999 and now we have about 160 dealers that account for 20 percent of our installations. We know how to go about it in a very controlled fashion. We have always been economically disciplined. We go about things as rapidly as we feel comfortable. We have done a very good job of getting into more sophisticated commercial applications and will continue to roll that out.