How ASG Security Achieved $10M in RMR

What is your organic growth target and what’s your overall growth target?

Masino: In 2014, we had a really good year with 7.8% organic growth. In 2015, we’re going to replicate that, about 7.5% in 2015 is our goal. Overall growth, in 2015 we’re planning to grow by about 15%; in 2014, we grew by 14.5%. So it’s very comparable growth for 2014 and what we’re planning on this year.

Nuccio: One of the things that’s obviously challenging is the bigger you get, the harder it is to grow at these percentages. We’ve thought about that, and why we feel really good about the level we’re able to grow. We’ve had very strategic processes from Day 1. We’ve remained steadfast and we feel confident we put together a five-year business plan that has very similar growth structures, even though we’re getting larger and larger.

< em>ASG wrapped up 2014 by hitting a major milestone, $10 million in recurring monthly revenue. Speak to me about that impressive accomplishment.

Nuccio: When you think about it, back in 2003 and even in 2002, when the company first started and then was acquired by partners we had. Going from zero and thinking about the opportunities that were in the industry, and the ability to build a company of high quality, of high customer service, and all those kinds of things. In that thought process, we always thought about what we would look like in 10, 11 or 12 years. Because we zero-base budget, we always mathematically figured out we’re going to hit $10 million, which is huge. It’s monumental when you think about zero. We’ve always been focused on it and excited about it, but we knew mathematically it would happen.

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We’re already thinking about what the next milestone is, but it’s a tremendous achievement for the organization. We have many employees who have very long tenure with us. I think it’s just been something that has actually been very fulfilling. It’s one thing to grow, but it’s another thing to grow efficiently, effectively, and have your reputation. The legacy we’re going to leave in this industry is that it’s a high-value company, and how we treat employees, stakeholders and customers.

Bob Ryan: The best way to get an appreciation for achieving $10 million in RMR is not to look forward, but to look back. I look back to when I came onboard with ASG. We had three offices, 25 sales reps and about $875,000 in RMR. Over the years, literally building this company one brick, one sales rep, one technician, one customer at a time, and now we’re not three offices, we’re 23 or 25, we’re not 125 employees, we’re almost 1,200. We’ve gone from 25 sales reps to 300. When I joined the organization we did not have one sales manager; today we have 30 guiding, directing and driving that salesforce. There was not any one big moment where a couple million dollars popped up in RMR. We literally built that one customer at a time. At some point, when we’re all off doing something else, we’ll be able to look back and say we grew this company 10 times or more from what it was when we got here. That’s already made my career a success, just being a part of it with these guys. 

Masino: We’ve built a platform we can continue to scale and break into a top five national player if we wanted to – a national player, in terms of RMR and customer size, but not necessarily geographic footprint. Part of our success is being densely concentrated in the markets we’re in. We could break into that top five, five or 10 years from now.

On the topic of RMR, what are the top three RMR-orientated services in terms of opportunity today?

Ryan: I’d say the biggest one is the most obvious, residential and small business security and home/business automation. That is a giant category that can keep us all busy for a very long time. We’ve got a flagship brand, ASG Connect which is our security and automation package for residential and small business customers. Probably 80% of all the transactions we conduct in the company involve a system and service delivered on that platform. What we see as the great opportunity for us is that the security panel is really the hub or gateway for all these other interactive services we can deliver to a homeowner or business owner. Along with the Internet of Things and everything that’s coming down the road, this particular category is going to have a very long and healthy lifecycle.

In addition to that is the whole notion of hosted services. We’ve invested a lot in hosted video surveillance. We see video surveillance as the fastest-growing technology category in the electronic-security industry for more than a decade. We’ve essentially taken what has been commoditized and reduced to a low margin type of product sale, and we’ve been able to convert that successfully to an RMR service. That’s a big deal, when you can take the fastest-growing category and instead of getting paid once to install a system, we get paid every month for delivering a service. We continue invest there. I think security and automation together, along with hosted video, is a lifetime’s worth of work.

Another great big category out there, access control, hasn’t made the same splash in terms of an RMR-based hosting service. But we think that’s going to change in 2015. We’re making some investments there, and probably going to launch a flagship service in that line, and really get some good market traction.

Those are the biggies, and where we spend most of our time.

Can you give me examples of how ASG employees are working smarter and more efficiently to enable success?

Bill Rose: One of the things I say often is people do more of what you inspect than what you expect. I think we need to be able to communicate back to our employees how we’re doing. It all revolves around analyzing, reviewing, understanding, training, implementation and accountability.

If you take service as an example, one of the challenges always is completing a service call without the need for some form of a callback. Reviewing each service touch with the customer where a return trip was required, and digging into that, to understand if it was an inventory or vehicle stocking issue; was it a training issue; was it something the technician was not prepared for that specific call? We break that down each month, and go through each initial service call that required a return trip. From that we look to gain an understanding that reduces the chance of needing a service return the next time out.

Another example would be showing up at a home where the customer is not there. It’s about calling ahead of time, which is not only a great customer service but it assures you don’t drive across town for nothing. We want to ensure the field technician understands the requirement of calling ahead, letting the customer know what time they’re going to be there and setting an expectation of approximately how long the call is going to take.

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