Alarm Firms Post Improved Q1 Results

Some alarm companies and integrators tell SSI their first-quarter returns met or even exceeded their projections, and they expect the remainder of 2010 to deliver on the promise of that growth. However, some providers continue to struggle.

Those companies seeing jumps in revenue from a year ago mostly attribute it to new intrusion business driven by rising crime and a gradual economic recovery that has kept residents and businesses fearful.

Syed Ali, general manager of All American Alarm in Fort Myers, Fla., says he has been careful to gear his marketing efforts to appeal to reasoned approaches. Ali’s first quarter produced 18-percent more profit than the first three months of 2009.

“We use more of a consultative approach, making the customer make the decision rather than shoving it down their throats,” Ali says. “We’re more concerned with the customer having a good experience than a raw experience to get the sale.”

Successful initiatives for Ali included launching a blog where he posts safety tips; producing a TV ad for a Christian network; and using Google AdWords to capture more Web traffic.

Ali expects 22 percent profitability in the second quarter and has set a goal of 30 percent for 2010.

Central station operator Alarm Monitoring Services of Monroe, La., saw a similar first-quarter increase in profitability. The company recorded a 23-percent gain from a year ago, CFO Dera DeRoche-Jolet tells SSI.

The company’s accounts growth came from new dealers coming into the industry, she says.

“We’re adding accounts. There are some deletions. For every one we take off, there are two or three we’re adding.”

The new business is coming from residential intrusion and fire systems for retail and warehouses. Dealers are also adding additional surveillance and access control systems to gated communities for after-hours monitoring.

Integrators that relied on outfitting commercial new construction with security systems didn’t fare as well. Bob Michel, CEO of Valley Alarm in Sun Valley, Calif., says his business returned to sales fundamentals.

Michel, who reported a 25-percent drop in sales for the quarter, also says he’s begun marketing to other verticals such as education and medical.

“We’re using this time to strengthen our sales infrastructure,” he says. “It’s a time when you’ve got to work twice as hard to get half the sales. We’re really focusing on basic sales strategies, marketing and prospecting.”

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