Alarm Company Execs Explain How to Outpace the Competition
In an exclusive roundtable, presidents and general managers from four leading installation firms discuss the current state of their regional markets and provide details of how they are positioning their companies for success in 2012.
Through the years, installing security contractors have earned quite a reputation for being hyper-competitive and loathe to network or talk shop with other industry comrades in their local or regional markets. Gather a group of them from outside their respective battlefields and the industry’s legendary camaraderie begins to shine through. You can see it on constant display at the industry’s various conventions, association meetings and similar business functions.
Sharing best practices and learning from the successes and struggles of other industry brethren remains an indispensible priority for legions of dealers and integrators. And it is a chief reason why each year SSI convenes a group of leading security company executives during the First Alert Professional Convention for an in-depth roundtable discussion. The latest installment presented here took place recently in Scottsdale, Ariz., at the Westin Kierland Resort.
In the ensuing conversation, Peter Allen, general manager of General Security in Plainview, N.Y.; Jeremy Bates, general manager of Bates Security in Lexington, Ky.; Larry Comeaux, president of Acadiana Security Plus in Lafayette, La.; and Stephen Wheeler, president of Holmes Security Systems in Fayetteville, N.C., detail their strategies for 2012 and how they deal with daily challenges of operating successful companies.
Learn how each of these company leaders are responding to increased competition, as well how new technologies and services are helping them meet the demands of a marketplace in constant flux.
Let’s jump in by having each of you recap your company’s performance in 2011.
Larry Comeaux: The [Gulf of Mexico] oil spill in 2010 really crushed our area because the industry relies a lot on the oil business. In 2010 we thought we were going to break all records. But when that oil spill happened, 30 days later business came to a halt. We lost 150 monitored customers in 90 days.
We didn’t expect it,but we had a very good year in 2011. We are about 60% residential, 40% commercial. We made some very good leaps and bounds with commercial jobs in the oil field patches, which are doing well again along with all the subsidiaries of other kinds of businesses. Access control and cameras in the past six months has really done well. We have bid on a lot of jobs in the last 90 days; all the jobs we are bidding we have been getting.
Jeremy Bates: 2011 has been an amazing year for us. We have had strong growth for several years, but we are probably close to doubling our sales for installation and monitoring revenue in 2011. Our company is primarily commercial-based although we do have a significant residential base. We do a lot of work in managed access and a lot of video work.
2011 has been the breakthrough year for us in IP. We played and tinkered with it for about a year or so. We had it installed at our office and finally we started installing some significant jobs with IP video. The quality of the video and the things you can do with it is just amazing. The customers really see the value. But it’s also been one of our biggest challenges; it’s not installing a basic burglary system or a basic camera system. It is a whole different skill set. That has been a challenge, making sure that we have that skill set.
Stephen Wheeler: For the past 50 years we have always had a minimum of 2% to 3% growth. 2011 is going to be in excess of 15%. When the market began turning down, I made a conscious effort four years ago and I hired [a marketing specialist ] to come in and specifically help me make sure that when we came out of this recession we’d be well prepared. When [a prospective customer] thought about security, I was going to be the guy they turned to when they were ready to spend money. I was planning on the future, but what ended up happening is that marketing along the way really shot us forward. I didn’t count on that. It taught me a lot about marketing.
Peter Allen: For 2011 we are up about 9%. I am happy it is an increase. Installation wise we’ve had some very nice successes. I personally sold a fire alarm for the basement of a large mall anchored by Macy’s and Penney’s and whatnot. It was more than $1 million. The amazing thing is it had very nice margins. We also got involved with a very prestigious North Shore village with a CCTV system, which is at 19 intersections.
We have been successful, but each branch is a story by itself. Plainview did very well. The Winston-Salem branch is struggling a little bit. In Utica we have a very nice commercial business but virtually no residential business. That is contrary to the rest of the company; we are 83% residential. On the residential side over the past six months we have gone very big on interactive services.
Identify a particular strategy you are pursuing in 2012.
Comeaux: Two years ago we started overhauling our central station. When we were preparing for all of this, we wanted to start a video monitoring service, which we couldn’t do with the old software. We want to be able to do accounting for access control and everything else. We now have Bold Technologies’ [Manitou CS, a central station automation software package]. SedonaOffice is up and running too.
We feel very good about 2012. We plan on doing a lot of video monitoring in the future. On average we put in 20 recorders a month. I’m not receiving any monthly income from it right now. I’ve had to sub out probably four of them right now to another monitoring station and they charge me $25 a camera. If you have a 16-camera recorder, most of the time they want at least nine of them to be watched 24 hours. So let’s just say on average $250 and say 50% of that, so 50% of 10, that is $2,200 more a month of income off of 10 jobs. That is a very nice income.
Some of our [market niches] include toy boxes where guys keep all of their fancy rebuilt cars. We do a lot of that in our area. Also storage units where people come and go 24 hours a day. We have oil field locations. We have car dealerships that are paying $40,000 to $50,000 a year for a guy to walk the yard at nighttime and half the time he is sleeping.
Bates: I would add to [video monitoring] that our attitude is any place with a lock and a fence is a prospect. We have definitely had success with car dealerships, and also any business with a guard service. The market is there. We have had good success with a local school district. They have done about 35 monitored video systems with us.
or 2012, we expect a good year. Back when it was pretty clear we were headed into a recession, we held a quarterly meeting with the employees present and we talked about it. We said, ‘Somebody is going to be buying security and it might as well be from us.’ I said the way we’re going to make sure that happens is the sales team will be aggressive as always, but the technical staff, the service, the installers, the inside people, everybody has to do a good job in order to maintain the customers that we have and also to continue to build a good reputation so we get referrals. You would not know based on our performance that there has been a recession. Our basic attitude is to continue that in 2012.
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