Earlier this year, the security industry was once again rocked by major M&A news when it was announced that an affiliate of private equity firm Apollo Global Management would be acquiring ADT and merging it with Protection 1, which the company acquired along with Maryland-based ASG Security in 2015.
While the merger is still in its early days, there is already great anticipation within the market about not only what the long-term impact of the deal will mean for the residential side of the industry but also what kind of potential of the combined company could have on the commercial security sector.
SecurityInfoWatch.com (SIW), caught up with Jamie Haenggi, chief marketing officer for ADT, at ASIS 2016 on Monday to discuss the implications of the merger on their approach to commercial security customers and the challenges they expect to face as they integrate the two companies.
SIW: What will the merger of ADT with Protection 1 mean for your commercial integration business?
Haenggi: How we look at the opportunity to bring the two companies together, quite frankly, whether it was ADT purchasing Protection 1 or Protection 1 purchasing ADT, we felt the two companies coming together was beneficial for a lot of reasons. First and foremost, ADT has a fantastic footprint across the country but the other aspect is not only the brand recognition but coupling that with Protection 1 which has really spent the last six years going in and dialing into the customer experience at a very granular level and scaling that.
How do you take call centers that are handling hundreds of thousands of calls and answering every call with one ring and a live agent without transferring 10 percent of those calls? How do you now take that with what we’ve learned, developed and implemented on the Protection 1 side and now bring it to ADT? How do you take same day service delivery and make it very scalable on the Protection 1 side and bring that same offering to the ADT customer base and market?
Protection 1 will continue to be a main, go forward brand for the national account space and the commercial integrated systems division. Whether it’s 24 or 36 months out that they ultimately merge into the one brand, we’ll see how that goes but you will continue to see Protection 1 as a dominant brand in the commercial and national accounts space. When you think about merging the two companies, it really is about bringing the best of both worlds together and our challenge right now is to ensure, from an IT perspective, that we’re developing the infrastructure that allows the companies to really be combined. The other component of that is how do we elevate the customer experience? We want to be known in the industry – whether it is ADT or Protection 1 – as the service company.
SIW: How do you plan to leverage the combined strength of the companies to better serve the market?
Haenggi: First, what I think we have going for us is the culture on both sides. Our CEO, Tim Whall, has been out on the road and he’s probably attended a good 15 to 20, maybe even more than that, town hall meetings with various branches on the ADT side and I think his key takeaway would be, ‘Hey, we’ve got an employee base that is passionate about the customer and they want to do good things for the customer.’ Now, how do we enable our infrastructure, technology and our commitment as a company to deliver on those things? When you have a CEO and a management team and an employee base that is focused on the customer, it’s then all about the delivery. We’ve proven we can do it at Protection 1 and we’ll do the same thing at ADT.
SIW: What are some of the biggest challenges and trends impacting your business and what are you hearing from your customers about their pain points?
Haenggi: Different market segments have different pain points, trends and things that are impacting them. I would say in the commercial and national accounts space, it’s probably no different than six years ago when we first got into the space and sat down with literally dozens of customers. Tim did hours of interviews to understand what their pain points were and the biggest one was service, the pain of their existing service provider. The reality is all national account customers have security providers today. You don’t win any business because they don’t have security. They have security and their biggest pain point is service, so that was the impetus for designing an experience for national account customers that solely focuses on world-class service delivery unique to their needs.
An oncoming threat that we’re seeing is around the cyber space. We have our managed services division that goes in and develops and implements networks solely for security systems fully secured from anti-virus to threat detection to throttling bandwidth and managing all of the things around cyber threats so that a security system doesn’t become a vulnerability on a major corporation’s network. Security is not new but the threats are.
SIW: Have there been any synergies that you’ve been able to leverage as you’ve worked to combine the two companies and have you found areas where there is overlap and perhaps room to consolidate?
Haenggi: These are two very large entities. We’re not combined yet. I would say primarily where we’re going to see a lot of the synergies or overlap will be at a corporate level. You’ve got to think about three different areas – your corporate areas, centers and field offices. In your corporate functions, you don’t need two CEOs or CFOs so there is a lot of overlap in those types of functions and our goal is to make sure we right size the corporate structure to serve the field and the centers on their delivery to customers, so we’re going through that process.
