COPS’ McMullen Prioritizes Alarm Management, Monitoring Redundancy

The October issue of SSI features a guide to selecting a third-party central monitoring station in which nine providers are spotlighted. I conducted extensive interviews with executives from all of them, most of which could not be shoehorned into the print publication. In this exclusive bonus blog, COPS Monitoring President and COO Jim McMullen discusses alarm and dispatch management, regulatory issues and COPS’ monitoring redundancy.

How have changing signal transmission methods impacted your company as well as your dealers’ businesses? Challenges? Technical issues? Sales issues? Pros/cons? Opportunities?

Jim McMullen: One of the biggest tech challenges we have today is with POTS lines. Without warning, the quality of the POTS lines can become degraded when a carrier upgrades their network or add new routes through their central office to get better throughput. As a result, signals using certain formats experience inconsistent results reaching the central station. This is completely fixable once discovered, but until then, it creates problems for all concerned parties. Another challenge is finding the time to dedicate to learning about IP network services. For the dealers and Central Stations alike, the switch from POTS to IP can be an opportunity for additional revenue and increased RMR by updating their subscribers’ systems along with selling some of the new features that home automation and lifestyle services that are available in the industry. However, we seem to also be going backward in time relating to central station receiver due to the lack of an IP transmission standard. Instead, just like when POTS lines were the norm, all manufacturers want have their own proprietary packet/transmission format, which means central stations have to purchase, maintain and have the ability to support all of the manufacturers’ receivers.

Please summarize your false alarm/dispatch practices and describe the ongoing challenges and successes.

McMullen: We have several practices that can help a dealer both prevent false dispatches and to identify account with high activity. At the time of alarm, we practice Enhanced Call Verification to reduce false dispatches. Dealers can also take advantage of the electronic cancel signal if they choose, which will automatically clear an alarm if it is received within 15 seconds of the alarm signal. We also have options called “Duplicate Signal Suppression” and “Cross-zoning” in our system – both of which can significantly reduce false dispatches. Finally, in over-and-above ECV, which is typically two calls before dispatch, customers can elect to have up to four numbers called before dispatching the authorities on burglar alarm signals. For new customers, we have a “User Familiarity Period” that can be activated by dealers for their entire account base, or for a single account. This feature gives new customers the freedom to use their new system without the fear of police response. Each month, we analyze our dealers’ activity and proactively help them identify customers with repetitive false alarms or with excessive activity overall. By doing so, we are also able to identify accounts that a dealer might have set up incorrectly such as not correctly identifying a 24-hour test, open/close signals, or other recurring signals that should be automatically logged by our system. There are also a number of ways that our dealers can identify accounts with false alarms on MPower including: a monthly Frequent Alarm Occurrence report, Most Dispatches Report, Runaway Report. Dealers can also watch their signals in real-time as they are received at the central station. In addition to recurring false alarms for a variety of reasons, one of the biggest areas we see that cause fines pertains to alarm permitting. To prevent fines due to permitting, our system can identify these jurisdictions and can prevent a dealer from activating the dispatch number until a valid permit is entered on the account.

In what specific ways do you help contracted security dealers increase their recurring monthly revenue?

McMullen: Because our staff represents our dealers, providing excellent service is the best way we can help a dealer’s bottom line. On average, through the course of business, we talk with customers more than our dealers have the opportunity to. Providing excellent service not only increases customer satisfaction and reduces attrition, it can also increase referral and word-of-mouth sales from individuals on existing customers’ responsible party list. Our private label MPower subscriber access is another way a dealer can increase the value of their service. Some of our dealers increase their revenue by offering their own MPower access, while others see MPower as something that helps increase customer satisfaction, which could ultimately reduce attrition. Either way, MPower positively affects our dealers’ bottom line. In addition to MPower, there is a wide variety of products and services that a dealer can use to increase their RMR. PERS and home control are just two. We see our job as supporting a wide variety of the industry’s leading technology, products and services, and then educate our dealers on how they can integrate them into their line of services. We often have training classes at each of our six central stations. We also have a number of ways to help dealers keep their costs down such as showing them how to reduce activity and reduce false alarms. While this may not increase RMR, it definitely helps their increases bottom line by reducing expenses.

Describe your company’s approach to newer technologies/service offerings such as PERS, video monitoring, GPS, energy management, managed access control, etc.

McMullen: We currently support all of these services and we see a growing consumer demand for them as well, especially in the home control and PERS markets, both home- and mobile-based. As consumers require more access and control from their systems, our goal is to support our dealers so they can capitalize on this demand and stay ahead of their competition. When it comes to new services and technologies, one of the best ways we know how to do this is by continually reinvesting on our infrastructure and adopting and the finest emerging technologies, and then integrating them into Generations™, our exclusive monitoring platform.

How does your company decide whether it is time to “go all in” with one of those newer technology areas or not? How do you determine business and pricing models?

McMullen: We would describe ourselves as adopters of leading-edge technology, not “bleeding-edge” technology. Here’s how we would describe the difference: The “bleeding-edge” technologies are generally pioneers and the first to market. However, they are not companies that perfect the technology or gain the widest acceptance. During the bleeding-edge stage, we see a lot of trial and error as the technology is perfected. Through we have often participated in testing and proving new technology, we don’t go “all in” until the technology has proven itself to be reliable. Because of the nature of our business, we can help test new technology with manufacturers and participating dealers, but we can’t afford to experiment when it comes to the products and services we offer to our general dealer base and their customers. We would describe leading-edge technology as solutions that are proven reliable and that show signs of growing demand. It’s at this point that we would make the decision to go all in.

What are yo
ur company’s top regulatory, compliance or operational challenges and how are you managing them?

McMullen: As a national monitoring company, we are faced with strenuous state licensing compliance requirements for both company qualifiers and dispatchers. For instance, some states require that companies provide original duplicate criminal background checks and fingerprinting for employees in states many miles away from their home states. Some states even obligate company qualifiers to travel to the state to take licensing tests often devoid of any monitoring-related materials and mandates. While these rules, regulations, statues and policies have been well developed to help protect both consumers and businesses, some of the requirements do little, if anything, to address alarm monitoring directly. Many of the monitoring regulations are piggybacked or attached as part of other legislation that often governs other industries such as electricians and private security guards. To combat this challenge, I am co-chair of an AICC subcommittee formed in March 2011 that is actively pursuing in congress a nationally recognized monitoring license. We also find it challenging to stay on top of the constantly changing landscape of state and local permitting and response policies throughout the country. We stay informed of policy changes through direct contact with our dealers in our dedicated dealer support department and regional account executives. We’re also closely involved with various state, local, and industry associations.

What are your top three go-to reasons why a security dealer/integrator should do business with your company as opposed to a competing central station?

McMullen: Stability: For over 35 years, COPS Monitoring has been known for delivering high-quality, third-party monitoring services to independent alarm dealers and their subscribers. Our ongoing commitment to reinvest in our employees, central stations and dealer base has made us one of the largest independent wholesale central stations in the industry, yet our unique organizational structure and regional central station approach has permitted us to retain a personable “hometown” level of professional service. Our average dispatcher tenure is over four years and 10 of our top level executives have combined experience of 214 years. Technology and reliability: Our network of central stations and technological infrastructure exceed UL-827 standards. Our central stations are strategically located in geo-diverse regions throughout the country. Each central station is staffed 24/7 and actively share in the handling of alarm signals, which means our redundancy is built-in. By distributing our alarm handling, we significantly reduce the probability that local conditions – either manmade or an act of God – can affect our entire operation. Because these conditions often create staffing complications and increase signal traffic, when these conditions strike, they wreak havoc on a single-site central station and their response times. When it happens to us, we maintain and often outperform our priority alarm response time that is consistently under 20 seconds. Our exclusive Generations™ monitoring platform is also reliable and operates on five mainframes, exceeding UL standards. Three of the mainframes are in our New Jersey headquarters, and the fourth and fifth mainframes are deployed offsite in the SuperNAP in Las Vegas – one of the world’s most prominent and secure hardened data facilities.

Scott Goldfine

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