Exclusive! Pro One Sets Priorities, Executes Plan

In recent times, it seems like Protection One has had to spend as much time and energy protecting its reputation as its customers. Overwhelmed by rapid growth and undermined by associations with marginal dealers, the nationwide alarm company found itself having to take a step backward in order to move forward. That’s why, in April 2001, parent company Western Resources brought Richard Ginsburg, 32, in as Pro One’s new president and CEO.

Whether it’s pulling cable out of a ceiling or profits out of a company, Ginsburg knows the security industry. Having grown up in a family that owned and operated an alarm company and, at 24 years of age, founding and turning Miami-based Guardian Int’l into a $20 million company, you might say it’s in his blood.

Since joining Protection One, Ginsburg has been busier than ever.  He has been at the forefront of the monitoring giant’s strategic refocusing on core operations and internal growth. Pro One’s only major news in 2001 was expanding a relationship with BellSouth Corp. in which the companies market BellSouth Security Systems from Protection One.

Security Sales & Integration recently spent some time with Ginsburg, talking about what he brings to the table. Topics included Pro One’s new focus, bad press and rumors, the company’s future, and countering dishonest dealers and account stealing, one of his biggest sources of aggravation and prime initiatives.

Refocusing, Consolidation Pace Positive Changes

Security Sales & Integration: In relatively quiet fashion, Protection One turned its fortunes around in 2001. What do you attribute that to?

Richard Ginsburg: The first thing we did was look at some of our marketing strategies and how to refocus our marketing efforts. At the same time, we restructured the management team, including a lot of field managers, in a very short period of time.

We also really focused the company on minimizing attrition. That involved getting out of the zero-down business. We believe it is important for our customers to make a financial commitment to us, which in turn leads to a longer-term investment.

Ginsburg’s Experience, Openness Key to Success

SS&I: Why do you believe you were selected for your current position?

RG: I believe the board of directors wanted to bring some industry people into the company. Previously, some of the managers were from the utility side. The entire top management team is new and all of us share significant security industry experience.

SS&I: What is your management style and how do you relate to Protection One personnel?

RG: I travel frequently and visit at least one of our 70 branches weekly. Since I have only recently joined the company, I have had to spend a lot of my time explaining the company’s position and direction to our employees. They have had a lot of CEOs and the direction of the business interests them. I have a very open management style and we discuss problems and goals for the company.

I probably give at least one to two speeches a week, to about 40 to 50 employees at every level. In addition, every employee has an open link to me as I am available through E-mail or a dedicated 800 number. I answer these communications personally; I do not have an assistant filter them.

Improving Image Includes Reducing Dealer Program

SS&I: Let’s talk about that rumor mill. In the media and among other security practitioners, Protection One has indeed endured its share of scandalous reports and rumors. How much truth is there to these allegations and what are you doing to improve the company’s image?

RG: With a company that grew as fast as Protection One did, it was no secret that it had some growing pains. We are overcoming that by being open and honest with our customers and asking them to let us prove ourselves. In this industry, a lot of people spend more time gossiping than running their businesses. It’s frustrating and hurts morale, but we are dealing with those issues.

SS&I: Speaking of the dealer program, do you still have one and, if so, how does one qualify to participate? Also, what benefits does the dealer derive from such a relationship with Pro One?

RG: We have moved away from the dealer program model. We still have a few dealers left in the program in some markets. We will continue to consider new dealers in areas we want to increase market share, but it is not something we are very aggressively pursuing.

Internally created sales and controlling our own destiny is our focus now. It is important to control the customer’s experience as much as possible to ensure your brand name. At the end of the day, we are installing sophisticated equipment that protects lives and property and we want to have as much control over that as possible.

SS&I: Do you believe most existing dealer programs are properly administrated and regulated?

RG: I believe there is a tremendous lack of self-regulation with alarm dealers. There are low barriers to entry in this industry—you just need a sign and a phone number and you are capable of being an authorized dealer! I believe it hurts other companies that do the right thing. In some states, there is not nearly enough regulation and it is too easy to set up a security business.

Video, Access Monitoring Are Big Blips on Radar Screen

SS&I: How is Pro One keeping up with and incorporating new technology into its operations? What are the opportunities?

RGWe just refurbished our main monitoring center, which, as I said, is state-of-the-art. We are very interested in video monitoring and monitored access control. There are businesses that we are testing now and would like to introduce as products going forward.

In certain markets, we have installed systems with palm or finger biometrics. I still believe biometrics has a way to go before it becomes as common as, say, a VCR. Its cost, reliability and programming have a way to go. But I am seeing more requests and it clearly is something in our future.

Attrition Addressed Via Service, No Pressure

SS&I: How does Protection One handle customer service?

RG: We have two levels of customer service—at the branch level and at the monitoring centers—which we believe is a competitive advantage. If you call a branch with a problem it cannot correct, the monitoring center will step in and actually back the branch up. We all share the same database.

SS&I: How is Protection One combating attrition?

RG: We do a lot of mystery calling in which we actually check up on our internal operations. We are also very open with our customers; they can discuss any issue with an officer of Protection One. We call our customers to see how we are doing. In addition, our sales program is not based on high-pressure tactics like most companies. We are going to sell a good product for a fair price to someone who wants our services.

SS&I: What is Protection One doing in the war on false alarms?

RG: Our customers are all taxpayers who pay local taxes for a reason and police response is important to them. Companies need to do a better job with their installations and minimize false alarms.

In certain markets, we review police dispatches and communicate with the customer to see what happened. In addition, we have online Web surveys for customers to determine if they are educated enough and mail out our false alarm prevention guides. If they need more training, we have no problem sending someone back out to instruct them.

Cracking Down on Account Poachers Is High on Agenda

SS&I: Your presentation about poaching—dealers stealing or using unethical methods to get accounts—at the Securing New Ground Conference this pas