Super-Regional Provider Ackerman Security Systems Shares Secrets to Success
SSI speaks with Ackerman Security execs who lift the curtain on the business’ people, practices, processes and profit strategies.
A no-theft guarantee that covers 100% of any financial loss from a burglary . . . No long-term contracts . . . 24/7 monitoring with a $19.95 base monthly rate that includes burglary, fire and medical alarms . . . Guaranteed monitoring response time . . . Able to activate and monitor existing systems . . . A UL and TMA Five Diamond Certified monitoring center.
All that and good ol’ Southern hospitality to boot? Such is the peachy value proposition offered by Georgia-based provider Ackerman Security Systems. An ingrained community fixture with ubiquitous yard signs dotting the landscape, for more than half a century Ackerman has delivered security services that have satisfied customers like a warm helping of cobbler, thereby cultivating a loyal and sizeable following.
However, with additional customers in Pennsylvania, New Jersey, Delaware and Maryland served by its Beltsville, Md., location; growing commercial and national accounts business; and recent changes in ownership and leadership, Ackerman has much more than Georgia on its mind these days.
Named after Charles Ackerman and co-founded by Bruce Turry, the suburban Atlanta (Norcross) company grew like gangbusters during Jim Callahan’s 20-year tenure, which included a five-year stint as CEO until his retiring in February 2017.
Having been acquired in 2015 by private equity firm Imperial Capital and partner OPTrust, a year ago this month Ackerman appointed Richard Perry as CEO.
With more than 30 years’ industry experience founding and growing security alarm businesses including Security Networks (acquired by Monitronics in 2013 for $507 million), in Ackerman Perry is now leading a business whose 300 employees serve 145,000 customers with revenues of $65 million including $4.4 million in RMR.
“Prior to stepping in I was on the board and an owner. I had spent a year or so interacting with the management team, and getting to know the company,” says Perry. “Before I took the role on, I spent about a month meeting with all the folks on the team. What I saw was really an enthusiastic group of people. Ackerman being as large and dominant as they are in such a tight geographical space is somewhat unique. I thought it would be fun to try to figure out how to leverage that.”
Security Sales & Integration convened with Perry and his executive team of Mike Sandes, president commercial, GM Chris Bean, Ryan Jaime, director of sales, and Nick Thomas, director of marketing, to bring the new Ackerman Security into sharper view. They lift the curtain on the business’ people, practices, processes and profit strategies.
Let’s go back a few years to 2015, the acquisition by Imperial Capital and OPTrust. How did that affect Ackerman Security, and how is it affecting it now?
RICHARD PERRY: Ackerman had a partner prior to Imperial. Jim [Callahan] and his team were already familiar with having private equity partners. However, the previous partner had been in the business for a long period of time, about nine years, so they had a long stretch together through which Ackerman grew dramatically and became the dominant brand in Atlanta.
When we acquired the business, “we” being OPTrust, Imperial and myself, we were really excited about the brand dominance and reputation not only in Atlanta but in Washington, D.C. We were excited about the opportunity to continue to grow that brand and to expand the great commercial business we have as a smaller piece of the overall business.
The impact of a private equity investor provides a fresh perspective on the business. They provide a fresh set of eyes, obviously capital for growth, and the challenge for management to take the business to the next level.
There’s been a big emphasis on making sure that we stay ahead of the curve in terms of being competitive in the marketplace. There’s been lots of changes, as we get that future plan into place, and position the company for that growth. It’s been a lot of fun, and I think we’re off to the races.
How have employees embraced the new leadership, and could you describe the corporate culture?
RYAN JAIME: The thing I most appreciate about Ackerman is the desire to create the culture that we want. Culture is not something you fix and then it’s just done. It’s a constant commitment to looking at ways to improve the organization. It’s something you have to look at every single day. When I came here at the beginning of 2017, there was a very good culture at Ackerman. We wanted to build upon it, and I think we’ve been able to do that.
PERRY: There’s a saying, “Nobody likes change except wet babies.” We’ve made a lot of changes in terms of building for the future here, and I’ve been really impressed with how the folks have embraced that. Ackerman has been around a long time. They were as steady as she goes, doing very well.
I wasn’t sure how folks were going to react to changes, but they embraced it and I’m really proud of that. It’s a testament to their enthusiasm and dedication to the business.
What is the philosophy for organic versus acquisitive growth moving forward?
PERRY: If you look at my past, all my businesses, it’s always been focused on organic growth. The future is not going to be any different than that here. If an acquisition comes along that is strategic for us and makes sense, we’d consider it, but I never include it in my budgets.
I don’t want to be waking up in the morning feeling like I have to go buy somebody to be successful here. We want to make sure we grow the business organically. That’s what our business model is based on here at Ackerman. We are an RMR-based business.
Even our commercial division, which includes national accounts and tends to do large installations, is also very focused on recurring revenue. Our goal is to grow on the recurring revenue side, where we want to at least be in double digits each year.
In this environment today we’re primarily focused on good metrics, meaning we want to grow in a smart way and at the right creation costs. We want to focus on customer retention. We’re very strong on underwriting, making sure we take on the right types of customers. And we want to provide great customer service, so we keep them forever.
We’re pretty insane when it comes to trying to exceed customer expectations, and make them raging fans. We spend as much time on that as we do on creating new customers.
What are some advantages or maybe disadvantages of operating in the region you do, and to what extent are you interested in expanding that footprint?
PERRY: It’s obviously a huge advantage to be in a market that we’ve operated in for so many years. Our name is somewhat of a household name here, and also in Washington, D.C., and Baltimore, which are our two primary markets to-day. We definitely do have an interest in expanding our footprint, but it’s not our primary goal.
Our primary goal is to build out the footprints we’re in. We still have a tremendous amount of growth opportunities within these markets I’ve just described. We also feel like we have a huge opportunity to grow our commercial business in addition to that, which is not confined to Atlanta and Washington.
Do you tend to standardize on certain vendors or product lines? How and why do you go about that?
PERRY: My philosophy has always been to keep it simple and standardized, and so that would certainly be my feeling going forward. Ackerman serves a couple of markets and is unique in a couple of ways. We do a lot of conversions, so this company is very good at dealing with many different types of vendors in terms of the equipment that we service.
When it comes to new products, the company’s been standardized on Honeywell for many years and has a strong relationship there. We like to be very standardized because it provides a more seamless and efficient customer support structure.
Do you find it’s more challenging to adhere to that on the commercial versus residential side?
MIKE SANDES: Commercially, I would tell you that we have our strategic partners and alliances with some of the major players out there. Commercially we’re more into the customer or client solutions that are right for the application and design of that system.
We’re able to traverse through quite a bit of manufacturers’ products and take them into the Cloud. So there’s a lot more variation on the commercial side for product deliverables.
What solution and vendor attributes are most important? Technology is moving so quickly. Is it the features, ability to integrate, support, relationships?
CHRIS BEAN: All of those are important. The top technology-oriented opportunities we see today are Cloud services, interoperability and Cloud platform integration, and video analytics. On the revenue side, continuous Cloud video recording, especially with WiFi cameras, is an important solution moving forward.
That allows us to offer the continuous recording feature, which is generally limited to CCTV, at a price point customers are willing to tolerate with WiFi cameras. However, as Mike said, it’s important to align the appropriate solution with the customer.
Even though we use Honeywell as a core product offering in the residential space, we do entertain products across the spectrum as well, especially in the conversion model. If customers have an existing security system at their house, they may not need to switch the entire platform over to be satisfied.
What are your top operational challenges, and how are you managing them?
BEAN: If you were to look at the hierarchy of top challenges and strains in the business, most of them all dial into the speed of our business and the volume of data tracking. We’re launching new proprietary software that will allow us to eclipse all of our previous capabilities. It will resolve many of our top business strains all at once.
It’s proprietary, custom-designed software that will allow us to integrate call center technologies, sales, service, installation and accounting. It’s one software platform to rule them all so we have everyone rowing in the same direction here on the Ackerman vessel.
PERRY: We have invested a lot of money into this CRM because we know it’s going to be a real game-changer for us. It interfaces with the central station software and then we’re also implementing Sedona software as our accounting platform.
Our internal CRM is going to be the tool that all of our folks use within the organization that will grab data from all these other systems and make it work with our customers to make their experiences more pleasant, more efficient, etc. It’s an ongoing iterative system so as long as we’re running the business that platform will continually be upgraded and have new features added.
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