Of the many companies that enter SD&I’s Fast50, few can claim to provide anywhere near 100-percent residential security services. In such an ultra-competitive environment, where major and minor players routinely merge to create super-sized companies, it is a supremely difficult task for companies to rise to the upper echelon of a crowded field. But by leveraging emerging technologies and the consumer’s growing desire for ultimate control at their fingertips, Utah-based NorthStar Home has done just that.
Coming off the best sales year in its history, NorthStar Home more than doubled its business in 2015 on the way to being named the top-ranked company in the 2016 SD&I Fast50, honoring the fastest-growing North American security integrators and dealers.
“It was a record year in sales for us with new accounts,” says Jason Christensen, the founder and CEO of NorthStar. “We have continued to drive different strategies around our retention and being able to keep our attrition low in the single digits. A lot of it comes down to the fact that we feel we are able to provide a truly superior customer experience.”
Embracing the Evolution of Home Security
Much of NorthStar’s record sales and customer retention success centers around Christensen’s company philosophy, and the organization’s embrace of the burgeoning home automation market. In fact, in just the last year, NorthStar shifted its operating name from NorthStar Alarm — which the company had used since 2000 — to NorthStar Home to cement its place as a smart home provider and not simply an alarm panel installer. “It is more descriptive of exactly what our focus is — on the home and connected home with security being a key component of that,” Christensen says.
Security, of course is still fundamental to NorthStar’s business. Multiple research studies and surveys cite security as a driving factor in connected home adoption, second only to entertainment. “We feel like we are leading out on presenting connected home technologies to our new customers and actively marketing to our current customers on how to add the technology to their systems,” Christensen says. “You have the consumer who benefits so much more and is essentially able to use these technologies and additional services at a similar cost. To me, that’s really exciting. It fuels a lot of the growth.”
As a long-time Authorized Honeywell Dealer, NorthStar has leaned on the popular Lynx systems for the majority of its home installations; however, the company will be among the first to market Honeywell’s new Lyric home automation and security platform; in fact, NorthStar is the first dealer in the country approved to sell the Lyric Security Panel.
“As technology has changed, we have adopted the latest and newest technology,” Christensen says. “We will be leading the way by starting to offer Lyric to our customers starting next month (May 2016).”
Connected homes seem to be an obvious progression for traditional alarm dealers, but many have not embraced the smart home concept, especially to the degree that NorthStar has. The company uses Honeywell’s Total Connect services within its own branded NorthStar app, so customers can control all the different home automation systems from a single location — a key selling point, according to Christensen. “Home automation is getting a lot of buzz in general, and we hear a lot about it, but what I love is being able to integrate all these things together,” he says.
Using the app, customers can have their thermostats, door locks and garage doors tied in with the security system so that with a single command, the user can turn off lights, lock doors, shut the garage and arm the security system when they are ready to go to bed. It also satisfies the modern consumer’s often insatiable need for information, as they are able to stay connected when away from home with text messages and notifications.
Connected Homes Mean More Profits
We provide peace of mind through quality products and superior service is NorthStar’s mantra and mission, and Christensen repeats it often every day. “We are still delivering that peace of mind, we are just allowing our customers to really stay connected to everything that matters most to them,” he says.
As many security dealers know, the connected home market is still just a step or two removed from its infancy. While it is true that many consumers are adding connected locks and thermostats to their homes on a DIY basis, very few have actually integrated it into a single interface or system, as Christensen points out.
This has put NorthStar, which operates in 28 states, in a strong position from a residential market standpoint. Not only is the company capitalizing on security-only customers, but it is also uniquely positioned as a solution provider for first-adopters and others who are dipping their toes in the connected home space —an area where security dealers are only scratching the surface of potential customers and subsequent RMR.
“The adoption rate has grown every single year,” Christensen says of the connected home offerings. “We expect to have a majority of our new customers with some element of connected home as part of their system and their services this year and as we move forward. Our focus has been to try to find what is important to those individuals — some care more about cameras, some care more about having a thermostat or door lock integrated with the system. Our expectation is that a majority of our customers will have more than just security. I wouldn’t call (the smart home) an upsell, but I would say it would be a downgrade to just have security.”
There are challenges to adopting this mindset as a residential security service provider. Installers, for example, have to do much more than simply mount an alarm panel and run some wires. It involves extended training and expertise to install smart thermostats and Z-Wave locks, for example. It also adds complexity to ongoing service and maintenance and customer support. The byproduct, however, is a more sticky customer, according to Christensen’s philosophy.
“Our expectation is ultimately that if someone is interacting with their system regularly, they are going to be a long-term loyal customer,” he says. “Anything that opens up the possibility of interacting with a system more frequently is a good thing, and we will have higher RMR.”
Growth Trajectory
Christensen and his partner founded NorthStar in 2000. He had worked just two years in security sales as he was working on his MBA at UCLA and decided to postpone his education and jump into the security services market with both feet. “We weren’t sure how it would play out, but it started out really well and I changed my own personal plans and focused all my efforts on NorthStar,” says Christensen, who later completed his MBA at BYU.
From its humble beginnings servicing Utah, Arizona, Ohio and Indiana, the company has expanded rapidly to where it stands now — at nearly 50,000 customers.
In January 2015, NorthStar purchased 8,000 accounts in Maryland, Virginia, Pennsylvania and Minnesota from Vision Security — pushing its RMR over the $2 million mark. “The acquisition (was) transformational for NorthStar and positions us as a leading growth company in the home automation and security industry,“ said John G. Troiano, Managing Partner of The Beekman Group, which along with Goldman Sachs, are NorthStar’s primary equity investors.
While the purchase was a key component of NorthStar’s growth in 2015, the company has enjoyed steady organic growth for the most part. “We have followed a pretty controlled growth pattern, where we add more new accounts each year,” Christensen explains. “Even though it has been very good growth, it has been controlled relative to some of the other companies we compete with. That has enabled us to grow and develop our infrastructure as the company has grown.”
In certain markets, more concentration has enabled the NorthStar brand name to take hold. “It hasn’t reached that stage nationally, but there are certain parts of the country where we have really good concentration,” Christensen says. “We have worked hard to keep and maintain a good reputation with our customers to be able to drive those types of leads and referrals.”
Sales, Marketing and Customer Service
Growing markets and customer bases means a growing sales force, and NorthStar’s management is diligent in its training and management of its sales teams — especially for door-to-door salespeople, a tactic that, as alarm dealers know, has seen it fair share of negative stereotypes and deceptive practices. The key, according to Christensen, is having a well-defined code of conduct that is well-trained and formally committed to, then holding every individual accountable to those principles. “It starts with having a very strong culture and having defined core values that are deliberately implemented from the point someone is brought into the organization,” Christensen explains. “We also align individuals on the goals of the organization to incentivize the right type of behavior and to have a system of accountability.”
Hand-in-hand with sales is the customer service challenge for a growing security service provider. That means keeping in contact with customers, being proactive and reaching out to them, and educating them on new technology.
Beyond the tried-and-true methods of achieving these goals, NorthStar is extremely active in the digital and social media arena. The company maintains a blog and active pages on Facebook, Twitter, Instagram, LinkedIn and Google+ — all of which provide helpful and often fun ways to interact with the company. It often runs special social media promotions, such as its recent “Giveaway Day” where customers could submit a photo of their NorthStar sign in their yard for the chance to win a $50 gift card. “We have done a lot with our own social media and have made efforts to increase the number of leads and referrals we have been able to bring in as well,” Christensen says. “I think a lot of those different elements have contributed to our success and just help us to continually grow and add more accounts each year.”
For monitoring services, NorthStar leverages Rapid Response Monitoring and has been a customer of the third-party monitoring provider since 2005. “That’s also part of what we consider to be an exceptional part of the service we provide to our customers,” Christensen says.
The Future
“Growth is certainly exciting and people are excited to be part of a growing company, but it certainly presents different challenges,” Christensen says. “You are constantly reassessing and evolving the organizational structure, developing new leadership, and the systems and technology we use. It is almost a never-ending list of change that has to be managed.”
With such rapid growth comes expansion. NorthStar is nearly ready to move into a new 30,000 square-foot headquarters facility in Orem, Utah, with NorthStar’s name and logo prominently facing one of the busiest intersections in the state.
The company is also taking steps to remain an attractive landing spot for millennials and other budding employees. Christensen says he recruits on college campuses often for seasonal sales jobs and positions in the corporate office. “We have tried to adapt the different ways we train and interact with our employees to fit the millennial mindset better,” he says.
While recruiting and staffing a growing company like NorthStar is challenging, Christensen says the key will always be the corporate culture and environment. “For me, the most important thing I can do is just make sure that we are truly living our mission statement as a company,” he says. “If we are truly doing those things — providing security and peace of mind through quality products and superior service — then it will contribute to recruiting. People want to be a part of something when they really truly believe in the product or the service they represent. It all goes back to the corporate culture.”
To learn more about SD&I’s fifth annual Fast50 and read about this year’s and previous rankings, please visit www.securityinfowatch.com/sdifast50.
