For instance, you have Walmart at the lower end, Nordstrom's at the higher end, Tiffany at the really high end. In our industry nobody's been able to really create that brand recognition that separates them from the competition.
If you think about our industry, we are a need-to-buy product, versus a want-to-buy product. The consumers are left with a choice of a lot of us that look the same, frankly. So how are we going to differentiate that to succeed in the marketplace? And over the years I really haven't seen any change in that. I think the little guys still own the customer service angle. It is personal with them. They actually do know who you are. The big companies still want to know what your customer number is. They want to make sure you don't actually know them as a person - you know them as a number. No one has been able to break that gap yet and deliver that great quality service as a large company, and the little companies aren't able to actually get through the economies of scale necessary to grow their businesses more. I don't think I've seen a great deal of change in that regard as people keep trying to make new attempts.
What are the challenges of being a large company and still aim to provide a mom 'n' pop appeal?
The challenge is getting in front of 11 employees in one small town and getting them to understand the message and live it every day against the five touch points and wake up knowing what we're going to deliver is doable. If you have 65 locations - we're not trying to run 12 great offices or 35 great offices - it's trying to get each of the 65 to operation at their highest level each and every day. That is the challenge when you are running a national platform.
You have to replicate what you know you can do in one location across each and every branch so the experience is seamless across the country. Given the variability in our transactions with the customers, how are you going to that? What tools, what tactics are you going to employ to allow your employees to deliver that best in class service each and every time across each and every one of those branches? That is the challenge. Not to do it in a few towns. Not do it in most of the towns. But do it in every town, every day in every transaction. That is the challenge.
Protection One is primed to grow. How will balance doing that through acquisition and growing internally?
First you crack the code to get one branch to grow and then it's 'how do we take that across each of them?' Growing organically is the best way to drive your company. The second month into it we actually achieved RMR growth for the firm so that was an outstanding month for us. We are trying understand the components of that, getting people to understand the easiest way to grow is to lower attrition. As you lower attrition by improving the quality of the service, then you go after the market share.
You are pulling a couple different levers there, but it's learning how to do it in one town, replicating that across a region, replicating that across the country. As you move forward, with acquisitions you have to decide if it is a strategic where you think you can fold it in and have the availability to do so? Is it something that is adjacent to your core offering that you think you've got a good chance to be successful in? Is it priced at a number that you think is fair and reasonable and going to give you a good return?
Historically, our businesses are at higher evaluations typically then what you could buy dealer rate at. You have to always look at it in that regard as well. If I want to start a dealer program it's probably mid-30s. If you are going to acquisitions why would you pay mid-40s? You have to look at the economic piece of that.