Resi grows fast at Custom Alarm

ROCHESTER, Minn.—Now in its 45th year, Custom Alarm, based here, is finding residential security to be one of the fastest growing aspects of its business, said Nikki Johnson, the company's vice president and director of marketing.

Johnson cited interactive services as an important driver of that growth.

“We've sort of changed our model like a lot of security companies have,” she explained. “Back in the day it was security alarm, fire alarm or monitoring, that was it, and now you've got all the lifestyle management tools, you've got home automation, you've got your remote access. So our monthly recurring is so much higher than it ever was because people don't have home phones and they're doing wireless communication.”

Company CEO Leigh Johnson started the company in 1968 in his basement. Today, the full service security company has nearly 70 employees, its own UL-listed central station and about 5,500 monitored accounts. It serves customers in southern Minnesota, northern Iowa and western Wisconsin. Custom Alarm is family owned and run—Nikki Johnson is Leigh Johnson's daughter and his other daughter, Melissa Brinkman, is COO.

At the end of 2012, the company had revenues of more than $10 million and RMR of nearly $249,000.

Through the decades, Custom Alarm has adapted with the times, Nikki Johnson said.

And to grow its residential business, she said, Custom Alarm has “been trying some new things in residential this year and really having a lot of success with them.”

For example, she said, “we've been creating some starter packages. And this year, for the first time, we were running monthly specials and promoting those. So we would get people interested in a $199 system and they'd say, 'I didn't know it was that reasonable,' so we'd call and go out and have an appointment and they'd end up buying a system three times that much” [when they learned about other affordable options beyond the basic package]. So we got in the door and got them interested with some lower level packages and the higher monthly.”

Also, Johnson said, “we've really had some success in promoting these specials in different ways, like doing some radio ads and Facebook ads … pushing it out on social media and really doing some additional marketing to the residential market.”

Custom Alarm also is reaching out to existing customers, such as ones they've had 10 years or more, to encourage them to upgrade by adding interactive services and also save money by switching their landlines for wireless, Johnson said. “It's just a win-win for everybody,” she said.

Access control and CCTV also are strong growth areas for the company, Johnson said.

To thank the community for its support over the years, Custom Alarm hosted members of the Rochester Area Chamber of Commerce at a recent celebration of its anniversary. Johnson said that in addition to long-term customers, Custom Alarm also has a number of long-term employees, some of whom have worked for the company for more than three decades.

“In our industry when you have customers who trust you to help secure their homes and their businesses, you take a lot of pride in that, and also when you have employees who come to work and stick around,” Johnson said. “It's just wonderful to see the long-term dedication these people have had."