Custom Security transforms itself into a commercial security provider

More than 30 years ago, it focused on residential systems
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Saturday, February 1, 2003

LACEY, Wash. - When Bob Helstrom founded Custom Security, he built a company focused on the residential market and one that would capitalize on its ties to the Sears security dealer program.

Today, more than 30 years later, Custom Security is a completely different company with a transformation that began about 10 years ago when the free security system offer began hitting the market and the Sears program went away.

What has emerged now is a company whose business is 90 percent commercial.

“The free systems started and the prices started coming down,” said Helstrom, Custom Security’s chief executive officer who as part of the Sears program received sales leads, financing and commission based on the installation. “When you’re paying someone a commission, not much is left. At that time sales were 90 percent residential and we operated in 17 states.”

That transformation is no small feat in the security market where installation companies that successfully reinvent themselves are few and far between.

“There are very few privately owned companies like ours left,” said Spud Downie, a 17 year employee of Custom Security and the company’s general manager and vice president . “Many have gone out of business or sold out. Basically, you’ve got to be flexible or you’re not going to be in business.”

That flexibility has meant adding items such as commercial burglar alarms, access control, and fire systems, and becoming a diverse company. Not only does the company install integrated security systems, it also provides wholesale monitoring to more than 80 dealers through a company called Alarm Center it started in 1980. Today the central station monitors 45,000 accounts, 10,000 of which are owned by Custom Security, and is responsible for about 60 percent of the company’s revenues.

Flexibility for Custom Security has also meant trimming down its service area from 17 states, and selling two offices, to become a two-location company with a two-hour service area. The company’s only other office is located in Honolulu, Hawaii.

The company’s transformation worked well, and proved timely, said Downie. As it added fire alarm products and service, fire codes became more stringent on items such as installation and inspection, providing the company with yet another market opportunity.

While the company’s security business remains steady, much of its growth today is being achieved through an Internet company. Launched five years ago, ReachOne Internet serves 9,000 customers, including providing dealers with Internet access to their accounts.