CenturyTel winds up for dealer program

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Sunday, May 1, 2005

MONROE, La.--Almost 10 years after acquiring its first security firm, telecommunications company CenturyTel will launch the beta test version of its dealer program in June.
The launch follows the company's slow progression towards building its security business. In 1996, the telecom acquired Delta Security and its central station, and after another acquisition in 1998, CenturyTel Security Systems Inc. was formed.
According to Jim Stevens, a security industry veteran who joined the company in March as security product manager, the company wanted to build its local presence before expanding into its 22-state market space.
"The company was growing the way a dealer in a local market would," Stevens said, "and now is the time to take it on a much expanded approach."
The beta test will be enacted in five markets where CenturyTel, which employs more than 7,000, already has a presence--Mississippi, Wisconsin, Texas and two locations in Missouri. One dealer will be chosen from each geographic area to participate and the company is currently in talks with dealers in those areas, but could not disclose any additional information.
While it's unclear how large of a program this will become, it has the potential to play a large part in the industry considering the financial backing from its parent organization. Michael Barnes, partner with Barnes Associates, said the stage is set for a resurgence in the dealer program arena.
"While there were certainly many casualties in the first, arguably over exuberant, round of these programs, there were also successes," Barnes said. "Unfortunately, the capital markets withdrew most of their support and the pendulum swung too far in the other direction. Now, it appears, qualified operations, with the proven ability to execute are finding more support."
CenturyTel's program, which will also bundle security and telecommunication offerings, should attract the dealers that will solidify the program in the market.
"There is a good part of recurring revenue sharing," he said. "We provide equipment, installation fees and commission. It comes close to emulating some of the acquisition parameters out there in the market today."
The company is looking for installers that have been in business for at least two years, have a reasonably strong financial foundation, are properly licensed and insured and have the resources to develop a strong business. He also stated the company will look for dealers that already have strong relationships with builders in residential construction.
The company can support dealers, which it will call authorized agents, with its Five Diamond Certified central station, which currently monitors approximately 10,000 accounts, and what Stevens thinks is unique in the industry: customer care loyalty bonuses.
"It's a program that rewards the dealer for reaching certain benchmarks in controlling attrition management," he said. "We are obviously very concerned with keeping customers for the long term."
If the beta test goes as planned, the company will look to expand the program further in the third or fourth quarter of this year.
"We are looking for consistent, long-term growth," Stevens said. "We want to grow in a manner that is consistent with our footprint and the quality of our existing operations."