DMP’s annual Owners Forum at ISC West featured two huge panel discussions, chock full of industry icons and experts.
The first panel focused on increasing alarm company value and featured:
Michael Barnes of Barnes Associates
John Mack of Imperial Capital
Don Erickson of the Security Industry Association
Daniel Oppenheim of Affiliated Monitoring
Chuck Durrant of Sandra Jones and Company
Stephan Segouin of Raymond James
Michele Turner of Google
George De Marco of Deco Ventures
Elizabeth Parks of Parks Associates
Kelly Bond of the Davis Mergers & Acquisitions Group
Here are some nuggets of knowledge from these esteemed industry experts:
Barnes: If you're going to own a company long term, you need to know what the average life cycle of a customer is. You need to know the margins that you make off the services you provide. And you also obviously need to know the cost is, if there is one, to originate that customer.
Turner: Keep an eye on this new Matter protocol that's coming out. It's going to be important to installers, but it's not something that's going to hit until 2023, but it's going to make that whole process of setup much easier. I would encourage you just to get smart on what that protocol means and then once you complete your installers because we could reduce the time to installation, which is another area or it could help save you money.
Parks: Your job in the future is to differentiate beyond just monitoring services. 36% of households now have a home security system, and 33% of those are professionally monitored. So that's 33 million or so internet households with monitoring and incremental monthly revenue that you can gain from these attached devices with future services.
Bond: “We are an industry that's made up of about 85% mom and pop-type businesses and in many cases, the business is very reliant on the owner for the growth. As you mature in your business and you start to think about what is happening in the next phase, especially if you don't have a succession plan that is already in the works, is how do you make the business less reliant on you as the owner and I will tell you this can largely impact the value of a business when you go to market.
Mack: Our industry has historically talked about attrition, so we track how many of our customers we lose. The SaaS industry tracks retention, and what they're looking for is can you sell additional services to your existing subscriber base? So a very good SaaS company getting a high valuation is one that has over 100% retention.
Daniel Oppenheimer: I think that when we hear talk about growing RMR or increasing revenue from an individual customer, that usually means adding new service to adding new capabilities to your business. My recommendation is to set up a point person and appoint them to be in charge of this new service or new product that you want to champion and relieve them of their other duties. I know that is so painful, because they might be a good salesperson that's closing business every month, but the only way to give birth to a new service or a new opportunity or a new geographic area is to take that person and firewall and quarantine and dedicate them to the new service.
The second panel featured a host of successful business owners and focused on the pressing business challenges facing today’s security integrators. The panel included:
Tim Whall of AquaVenture Holdings
Matt Wesphal of Bay Alarm
Pam Petrow of Vector Security
John Loud of LOUD Security Systems
Morgan Hertel of Rapid Response
Stanley Oppenheim of DGA Security Systems
John Brady of TRG Associates
Scott Elkins of Zeus Fire & Security
Rick Britton, CEO of DMP
Erik Varney of VerizonDM
One of the top topics mentioned was one of the perennially toughest challenges for integrators: Hiring and retaining top talent. Here are a few highlights of their comments:
Petrow: Make sure you're surrounded by people that think differently from you, have different approaches, and look at the market differently. When you’ve been around as long as I've been around, I tend to think I know all the answers, and I may not question things as much. Adding people to my team who are new to the industry, who will see it through a different lens, has been incredibly helpful for me personally.
Hertel: In a world looking at the great resignation, or whatever you want to call it. it is not only more challenging to find different people, but to make sure you find the right ones. I think there's a balance between those two. So many times I see people get desperate, they have three people and all of them are C players and they just hire the best C player.
Britton: Every military base has a person, or a department that is their whole job is to place all of the guys that are retiring. These are men that have been in the service for 20 years in some technical role, and they want to place them in the new job.
Stanley Oppenheimer: My friends in the industry are trying to hire finished, polished technicians. If you're out of work right now, the first question I’d ask is why. Our company decades ago completely gave up on the concept of hiring an alarm installer or technician who has any experience whatsoever at all. Every single one of my techs…we taught them everything they know, in a very standardized way.
Want to know more of what was said in the exclusive DMP Owners Forum? Stop by booth 23089 at ISC West and ask!
Paul Rothman is Editor in Chief of Security Business magazine (www.securitybusinessmag.com).
