APX COO Dunn: ‘We’ll be branching out’

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06/21/2010

Bolstered by swelling summer sales, despite a smaller sales force, the groundwork is laid for APX Alarm to branch out into more managed services for the home. That’s what Alex Dunn, COO told me during an interview last Thursday at the ESX show.

It may be the first day of summer for the rest of us, but it’s about mid-season for these guys. They started knocking doors in May or even earlier, and wrap up in August. So far the summer of 2010’s been smokin’ for APX Alarm, Dunn told me.

APX hired fewer salespeople this year than last, 1,600 compared to 2,000, but in terms of sales numbers, they’re right where they were last year—on track to sell about 130,000 accounts during the summer and 150,000 – 160,000 accounts for 2010. (Incidentally, if they hit that goal, they’ll surpass the 500,000 account mark.)

Those numbers mean that APX reps’ productivity is up 20 percent this year, Dunn figured, and he chocks that up to APX’s new equipment —the 2GIG GO!Control panel—the one with the hip new touchscreen pad, that now has home and energy management features.

“The per-unit creation cost has gone down (as a result of fewer reps) and the average RMR is up significantly about $5 per account,” he said. Dunn’s been watching attrition rates closely—he gets daily reports and has data on the 2GIG product going back to last fall when they began beta testing—and he likes what he’s seeing.

Customers like the product and, also important, is the fact that the reps like the product, so they enter the sale with more confidence. “In the history of APX, we haven’t had something that’s impacted productivity like this,” Dunn said.

APX was taken by surprise by the increase in productivity, Dunn said. They hired fewer sales reps because they were being conservative. “The capital markets were constrained 12 months ago, for that reason, the strategy we took was to stay the course. We were being conservative. We consolidated the sales teams that didn’t do quite as well; we’re down to 83 from 90 last year,” Dunn explained.

And the plan for 2011? “We have a significantly better outlook (in terms of capital market constraints) for next summer right now,” he said.

“The strategy moving forward is to really branch out from security into managed services on the residential side. Our first foray is the energy management smart grid offering to the consumer,” Dunn said. The 2GIG platform “will enable the next phase of our strategy, the direction for our company.”

The traditional security company is well positioned to branch out in these areas, he told me. It’s got “desirable characteristics that are independent of security,” he said. They include: capital markets will subsidize the equipment and installation; equipment is professionally installed in the house; the ablilty to set up recurring billing; and—for some—a national footprint.

What kinds of services will APX offer? Dunn said they’ve got a list of 30 service offerings that customers have expressed interest in that they’re looking at. He gave me some specifics: Integrating car security with home security systems; and, GPS tracking and geo-fencing integrated with the color touch screen in your home.

The list will change, and a year from now will include stuff they haven’t thought of yet. “When something new comes up, we can build a new service around the existing platform and very easily upgrade the service to the customer.”