AlarmForce posts record growth, revenue numbers

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Friday, November 1, 2002

TORONTO - Security manufacturer and installer Alarm Force has posted another successful quarter with its aggressive mass marketing model, recording an increase in revenues of 23 percent and net income growth of 25 percent.

With 30 offices and 100 employees across Canada, Alarm Force has been able to grow to a base of more than 33,000 accounts through organic growth, and without generating much debt, said Joel Matlin, Alarm Force president and chief executive officer. The company expects to sign on another 10,000 or so accounts this year alone and is now mulling a move into the U.S. market.

Recent pitfalls of some major players leave experts wondering about the future of mass marketing as viable business model for the security industry, following ADT's announcement of major cuts to its Authorized Dealer program (see SSN's October 2002 issue) and Leasecomm's recent suspension of funding of its dealer account program. (see related story)

"I think this is the beginning of the end of the model," said Greg Spurr, managing director with MCG Capital. "I'm not suggesting that it's a bad business model in every case; there are still people who can do it and do it well…but its harder for people to get financing for it."

Despite these and other high profile failures, Matlin said that model has been a large portion of his success.

"The big companies ( that are mass marketers) are working with smaller markets and they have a tendency to nickel and dime the consumer," Matlin said. Because his company is vertically integrated, Matlin said he has control over every aspect of his company's operations, from manufacturing and developing AlarmForce's proprietary two-way voice alarm system and software to in-house sales and monitoring.

"We've perfected the platform in Canada," Matlin said. "There's no question we could duplicate our model in the U.S. market."