Central Security: New capital, new growth plans
TULSA, Okla.—In late 2010, Central Security Group got a new owner: a private equity group. Now, this year, CSG is taking that infusion of new capital and putting it to work to grow the company—by adding new technology and creating a new brand for its dealer program.
“We are so excited about what is going on with us,” said Glenn Albers, who recently moved from VP, customer operations to VP, dealer operations as part of CSG’s strategy to focus more on its dealer program.
CSG, which is based here and does business in most of the Sunbelt states stretching from California to Florida, is one of the nation’s top full-service providers of security alarm monitoring services. Albers declined to disclose how much new capital CSG has available, but said it’s going to be put to work enhancing the company’s re-branded “Fair & Square” dealer program and adding new technology the company is rolling out along with the dealer program later this month—Alarm.com, 2Gig, UTC/GE Security, Honeywell Total Connect, and two-way voice.
That will lead to rapid growth, Albers predicted to Security Systems News in an interview Feb. 10. “I think once people hear about us, it’s really going to take off,” he said.
Summit Partners, a Boston-based equity investor, announced its acquisition of CSG on Nov. 1 from Great Hill, another private equity firm in Boston. Terms have not been revealed.
However, Albers said, Summit “paid a premium price (because) Central Security has always been looked at as, if not the top company in what we do, one of the premier companies.”
He said that CSG, which was founded in 1999 and has RMR of more than $3.5 million, is 95 percent residential.
“We really focus on that market, and we’ve been successful through sticking to the plan, which was the very best customer service, and then a very, very competitive dealer program. That’s how we’ve grown the business from 8,000 (accounts) 10 years ago to 140,000 customers now,” Albers said.
When Summit came in, he said, “they looked us over and they said: ‘There’s two ways we can grow this thing even bigger, and that’s to grow the dealer program and add additional technology.’”
Albers said CSG has about 200 active dealers in its already-successful dealer program but wants to add even more. “We really are going to focus on the dealers more now than ever,” he said. “The dealers bring in 75 percent, 80 percent of our monthly new customers.”
CSG not only has put Albers, who has been with the company six years, in charge of the dealer operations, but has hired Jackie Schmidt as director of dealer development. Schmidt, an industry veteran who most recently was a dealer account executive for Broadview/ADT, will “make sure the dealers we have are happy, and also to recruit new dealers into the program.”
He will support her and also support an internal group of dealer coordinators, Albers said.
“One of the things that makes us different from most, if not all, other dealer companies is that each dealer has a specific dealer coordinator that they work with,” he said.
CSG’s dealer coordinators “have relationships with these dealers and the dealers love that,” Albers said.
He said that CSG’s dealer program has numerous other features that make it stand out. “We’ve branded the dealer program ‘Fair & Square’ because that’s what it is,” Albers said.
He said that among benefits are cash up front for new accounts with no holdbacks.
“With the no holdbacks, we don’t make the dealer shoulder the risk of us providing good service. We kept the customers a long time—our average customer life is over seven years—because we provide good service and if we don’t, it’s on us,” Albers said. Other benefits include weekly funding and multiples of up to 36 times, non-exclusivity, a three-payment guarantee, and equipment discounts.
Albers said the benefits of CSG’s dealer program have actually been in place all along, but a survey the company did revealed some dealers had never heard of the program. That is why the company is “putting the word out” through advertisements and a revamped, interactive dealer web site, Albers said.
In 2011, he said, the company also is looking at opening new branches in Kansas City, Austin and San Antonio. Also he said, I think “there’s two or three acquisition targets in the pipeline right now.”
“It’s going to be a fun year for us,” he said.