Security On-Line: Quality keeps recession at bay

Company concentrates on high-end clients with valuable property they’ll pay top dollar to protect
Thursday, August 4, 2011

AMBLER, Pa.—Security On-Line Systems, a Silent Knight Farenhyt Engineered Systems Distributor based here, says its key to success in the down economy is to focus on quality, despite the cost.

“People are asking us why you guys continue to do well in this bad economy, and the only answer we have ever come up with is that we have never compromised quality,” William Lutz Jr., president of Security On-Line, told Security Systems News.

“And we really have not cut our price at all,” he continued. “If we cut our price, all we’re going to do is lose money, and the bigger the project the more money you’re going to lose, or you have to start cutting corners to make sure that job will be profitable. And we will never cut the corner.”

Projects for the company, started by Lutz and his father in 1974 and located in a suburb of Philadelphia, have included a $300,000 job at a chemical plant that’s currently underway, and others at historic houses of worship, residential mansions worth many millions of dollars, a state-of-the-art veterinary hospital, and the Philadelphia Cricket Club, the oldest country club in the U.S.

That may seem like a diverse group of verticals, but Lutz said that what they all have in common is that they are high-end projects where the protection of lives and valuable property is paramount.

“Nobody comes to us to buy something cheap,” he said. “They come to us because we have a great reputation. We do really good work and we provide excellent service, and it’s very expensive to provide exceptional service.”

For example, he said, clients include large historic churches “where they can’t have people running conduit or wire up the walls. We won’t do any of that. We hide everything.”

Lutz said that 2008—the start of the recession—was the best year ever for Security On-Line, a 13-employee company that also does security systems but which expects fire to constitute about 60 percent of its business this year.

Business in 2009 was off about 15 percent from 2008, but still very good, and had rebounded in 2010 almost back to 2008 levels, he said. The early part of this year was slow, but has gained momentum this summer, said Lutz, who declined to reveal specifics.

One major current project is the Gelest plant located outside Philadelphia, a longtime customer of Security On-Line that is adding a new building, Lutz said. Gelest manufactures silane, silicone and metal-organic compounds.

“That’s an amazing project, very, very complex,” he said. “We’re integrating five buildings all together. We’re going to run 100 separate voice messages all off the fire system that tell people what it [the critical event] is, where it is and what to do and what not to do.” For example, he said, “In some instances, you tell some people to stay inside, and you’re telling the [people in the] building of the event to evacuate.”

The work will include three IFP-2000s, two RPS-1000s, a Notifier DVC, and about six Honeywell Analytics LEL and Low Oxygen Sensors, Lutz said.

Lutz, who said he plans to hire a couple more sales people, also credits the company’s success to “standardization,” the fact that the company tends to stay with the same quality products year after year.

That ends up making everyone on staff able to answer customers’ questions on such products, not to mention that technicians have lots of spare parts in their trucks, Lutz said.

And he said all the company’s technicians are well trained. Lutz, currently one of three NICET level IV’s at the company, said that anyone hired has three years to obtain NICET level II certification. “That’s another reason you can’t be cheap,” he said. “When you’re pulling people out of the field for two-day, three-day and five-day classes, that’s an enormous expense because of the lost billing.”