It's All About Customer Service

How leadership and a laser focus on customer service created a 300 percent increase in valuation

When industry veteran Timothy J. Whall was first approached to take the helm of Protection 1 back in 2010, it was primarily a residential security company that was struggling with growth. The company had just been acquired by GTCR and taken private. GTCR had prior experience working with Whall, when he helped the company sell SecurityLink to ADT and then again in 2004 when he helped GTCR acquire Honeywell’s Security Monitoring division (“HSM”). While at HSM, Tim completed a successful carve-out of the division from its former parent within nine months. Tim was instrumental in preparing HSM for its eventual sale to StanleyWorks in 2007.

In fact, over the past 96 months, Whall has delivered $1.4 billion in value to the companies he has led. Whall’s first order of business upon joining Protection 1 was to get a thorough understanding of the company, its operations and its customers.

In the security industry, many companies focus on recurring monthly revenue (RMR) and its growth as a key indicator to the health of the organization and how it is performing. Whall firmly believes that the true valuation of a company is more than RMR performance and that the real indicator to understanding the business’ value is steady state cash flow . Steady state cash flow includes margins, attrition, creation multiples and growth.

Under Whall’s guidance, Protection 1’s approach was first to focus on margins through technology enablement to drive productivity to serve both the business and the customer. Second was to deliver world class customer service and the customer experience which continues to provide Protection 1 with the lowest attrition rate among similar sized peers in the industry.

All of the above is what attracted Apollo, the largest private equity firm in the industry, to make Protection 1 the foundation for its entry into the security industry. While Protection 1 has focused mainly on organic growth in the past, with the backing of Apollo, the company will be looking at larger additive growth initiatives as well.

”GTCR has been a tremendous partner over the years and has always partnered with operational leaders allowing them to do what they do best,” stated Whall. “Apollo is uniquely known for creating a collaborative environment, working with company management teams to achieve the greatest potential for the business. With Apollo’s style of investing, as well as the access to capital they provide, we know this partnership is a great match for Protection 1.”

“Apollo is delighted to be partnering with Tim Whall and his team to combine two strong businesses and create the industry leading platform in both residential and commercial security monitoring,” said Marc Becker, Senior Partner at Apollo. “Protection 1 is one of the strongest companies in the industry, with a national footprint, diverse sales channels and an experienced management team with a history of delivering strong financial results while being laser-focused on customer service. We see further opportunity for growth in the industry, and with the greater scale of a combined Protection 1 with ASG, the new company is well-positioned to succeed in a business that we believe offers very compelling expansion and value-creation opportunities.”

Protection 1 took some time to understand ASG’s business model and its customers through a very thorough due diligence process and has started to implement a very thoughtful integration plan. Joe Nuccio has done a good job building a company of passionate employees that care about the customer, which mirrors the Protection 1 culture. With a new equity partner in the industry and one with the depth and reach of Apollo, Protection 1 expects good things not only for its customers, but for the industry at large.

The due diligence process has included meeting with the employees of ASG, hosting town hall meetings and sharing insights as to how Whall looks at measuring the business, taking care of the customer and developing employees. The senior management teams have been working together to develop a detailed integration plan.

Under Whall’s direction, the company uses Key Performance Indicators (KPIs) to measure and adjust its approach on a daily basis. The company also has daily KPIs for its monitoring centers and customer service teams that measure dozens of items including alarm response time, customer hold times and percent of calls transferred.

Perhaps Whall’s greatest passion is serving the customer and over the past five years, he has built the company for long-term success. Every decision that is made is based upon looking 10 to 15 years down the road and determining if those decisions make sense for the company’s future.

Protection 1 collects customer feedback to determine customer satisfaction from several sources. First, it uses an outbound call service to survey thousands of customer interactions per month. For its national account customers, its 1Touch Pod teams survey each customer location after every service call and completed installation.

The company proudly promotes its 97.3 percent customer satisfaction rating and its A+ BBB ranking. Every phone call received by the company is answered by a Protection 1 employee, not an automated phone tree and typically within one ring. At Protection 1, same-day service is standard and not an upcharge. Unique in the security industry, Protection 1 offers Tech- Tracker, a service that notifies the customer when a technician is scheduled for their location. The service provides the customers with the technician’s name, picture and certifications. Innovation at Protection 1 is focused on improving the customer experience and most new solutions are designed from feedback that is received from the end-user.

Building a successful company takes hard work, dedication and a strong commitment to both your customers and your employees. This formula has served Whall and the companies he has led well over the past several decades—delivering results that are nothing short of remarkable.

This article originally appeared in the January 2016 issue of Security Today.

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