To stay on its toes, firm goes commercial

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Sunday, May 1, 2005

WICHITA, Kan.--A security company originally formed to serve the residential and new home construction market has made the switch to commercial security, a move that is expected to strengthen the company's position in the long run.
Alert America re-evaluated its business strategy after finding new homebuilders less receptive to structured wiring and security than originally expected. Competition from other local security companies and the area's economy also played a role in the change.
"When you broke it down, there were times you spent more to acquire residential accounts," said Jason Watkins, president and general manager of Alert America.
The clincher came when the state of Kansas passed its do-not-call law, followed by the federal do-not-call registry going into effect in 2004, "that forced us even more with commercial," said Watkins.
For the most part, Alert America's switch to commercial has been gradual. The company became more involved in the commercial market two years ago by offering cameras, DVRs, and access control products and installation to its customers.
"We wanted to make sure when investing in the market it was good for the company and the customer," said Andy Ameen, operations director for Alert America. "We needed proper training for personnel."
According to Ameen, the company also hired a network engineer, Abdel Moudakir, to head the company's installation and service department.
"People are moving into network-based DVRs and video servers," said Ameen. "For that, you need to have someone with network experience, especially if you're going to network it with access control."
Another series of changes came more than six months ago, when the company downsized its business. It cut its staff from 32 people to 12 and moved into a new office in December about one-quarter of the size of its previous location. With shrinking focus on the residential market and emphasis on commercial security, the company did not need its residential salespeople or telemarketers.
Today, 90 percent of its business comes from commercial related work, although the company will still provide residential security for the home's of business owners or from referrals.
Watkins expects the company's sales will decline in 2005 to $800,000 from more than $1 million in 2004, due to the change to commercial. But overall he anticipates better profits.
"It's had its challenges," said Watkins of moving to commercial. "When you're dealing with residential, you get the customer to sign the paperwork and you go in two days later to install the system."