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.
Wheeler: We are going to focus in on ancillary recurring services. We have a wonderful account base already. If every one of them were to take an extra service — whether it’s Total Connect video or remote managed access on the commercial side; whether it’s just taking an old-fashioned telephone customer and getting them on a radio and getting them onto some sort of wireless communication — you could easily double your recurring revenue. Embracing new technology is what I keep repeating to my employees. We have to embrace technology, accept it, explain it to our customers and offer it to them because if we don’t offer it they are going to get it someplace else.
The challenge for us to tackle in 2012 is past-due accounts. I’ve seen it increase in the past six months, so I’m concerned there is a trend starting here. I’m an easy guy. When you’ve been around 100 years like we have — that’s how we made a living 50 or more years ago, by extending credit — and we still have that mentality.
That is going to be my focus this year — sell these new technology services to embrace those customers so they don’t want to go someplace else because they’ve got it with us. And also be careful in watching our back door and making sure that everybody is paying us.
Allen: The latest thing we have looked into is managed access control, which I am very interested in. We will also continue to push the higher-priced packages. That is our big thing, the higher-priced interactive packages, such as Total Connect.
We are not doing as much as I would like to do with video. We hired a commercial telemarketer. We are having some success with that. The funny thing is he is not calling on a particular product. He’s just calling and saying, ‘This is who we are, here is what we offer,’ and it seems to be working better than just calling on a burglar or fire system. He opens it up and the customer sort of tells you what they are interested in.
I am looking forward to a good year. I hope we are going to duplicate our successes of 2011. We have grown during the past 25 years organically and through acquisitions. I am involved in five acquisitions right now, from $68,000 to $1.3 million. Some of them are quite small; 150-200 accounts up to 1,000-1,200 accounts. We are looking in areas where we already have offices. We found that if you do it right, acquisitions can be very good for your company.
How do you contend with finding and retaining good employees?
Comeaux: It is very hard. Once you have them trained, all the little boys in town come after that technician because they don’t have the money to train these guys. They don’t mind paying a little bit more for a guy that is already trained.
In today’s market it is very difficult keeping people because the other companies are coming to get them. It has gotten to a point where we pay 100% of the health insurance to the employee; not for the spouse. We have a 401K plan that we match up to 4%. You are having to pay a lot of benefits to keep them. Of course, we have to let them drive a company vehicle home every night. We have to pay for their uniforms.
What we are looking for now is ‘Can you handle a computer?’ It’s not teaching a guy now to program a keypad any longer. Now you have to have some kind of computer skills to be able to do the new technology. That is tough. To hire an employee who is not computer savvy, you are just wasting your time with them.
Bates: Finding good people and training good people is probably my biggest challenge, especially when you are in a high growth mode like we have been in 2011. I can remember times when we have put [help wanted] ads in the paper or online and you hear about the jobless rate being so high and we basically get no response. It just amazes me.
It’s expensive but we’ve got our lead techs and then we are hiring a lot of them helpers or apprentices so we can in turn groom them to be lead techs later on. That is one of the biggest challenges organizationally is finding good people. Every now and then we get lucky and a qualified technician is out there looking and they find us, we don’t find them.
We have never relied on subcontractors but in response this year we started reaching out. Finding good commercial subcontractors is a challenge. Residential seems to be easier.
We’ve been doing a lot of school work and work in the court system in 2011. It makes our numbers look great but I don’t know if it is going to be great in 2012 or the year after so I really worry about staffing up too much and then the big contracts aren’t there. Our normal sales are good but then you have these million-dollar jobs and those don’t happen every year. It makes me hesitate to go staff up on an expensive technician and train them and all that.
Wheeler: It is a problem. I have two positions that are available right now. I have hired three people in the past three weeks and all of them went through the whole hiring process — records checks, drug tests, the whole nine yards — and never showed up. It amazes me.
I offer it all — the health insurance, 401K, the dental insurance, the drive the truck home, the cell phone, uniforms, $50 gas cards. We tried Craigslist and got two or three hires recently. I talk to everybody. If they are going to work underneath our shingle, I want to at least see you and talk to you. I look for chemistry. If you don’t find the right chemistry mix it isn’t going to work. When you get oil in water, it makes your office miserable. I think you have to interview 10 or 15 people to find one.
Allen: We are a bit strange because each branch is different. Plainview is a union shop. The pay is tremendous. My top service tech [in 2010] in Plainview made over $100,000, including the company vehicle, full family medical, noncontributory union pension fund. That is a different situation. We normally get a good response.
We lost our Lenel technician in the Rochester branch who was very hard to replace. We do some very large Lenel systems with thousands of readers. I have a saying, ‘When
all else fails, throw money at it.’ Unfortunately that is what you have to do sometimes. What amazes me you are supposed to have the highest unemployment in years, you would think you could run an ad and have a line run around the building and that just doesn’t happen.
Do you worry about outside competitors — be it summer sales models or telecom providers — stealing your customers?
Comeaux: When it comes down to the summer sales guys, if anything, they have taught me a lot of lessons to stay ahead of them. It has taught us we are not focusing on our customers like we should be. It has taught us some good lessons for the future as far as keeping more in touch with our customers and letting them know more about what we do.
We are trying to touch our customers more but also let them know what we have to offer. It has taught us to participate more with our customers, as far as sending cut sheets all the time of what we have to offer, be it Total Connect, cell backup, smoke detectors or whatever it may be.
Bates: I worry in our market being told that the local cable company, which was bought by Time Warner, is going to become a competitor. And I worry about Verizon. I worry about them devaluing what we do, driving down what we charge for monitoring. But then I realize there will always be a place for a company such as ours where we charge what we charge so we can support good, quality service for our customers. I can’t do that with these bargain basement prices that I see some of these big national companies doing in trying to get a ‘triple play’ or a ‘grand slam’ to preserve their outrageous cable bill. The best thing to do is to be a better competitor, be a better security provider, and that is what we will aim to do.
My other big concern is we are in a state where there is very lax regulation of security companies. Anybody can be a security company. Yes, there is this thing called fire code but it only gets enforced if you want to enforce it and do a good job. I know we are at a disadvantage where we know how to do something properly and by code, but a lot of our competitors don’t. They get away with murder and there is nobody enforcing the rules.
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