SFA Enters the Race with Announcement of New Dealer Program

April 6, 2006
Residential-only program looks to launch nationally this Spring

If you’re a dealer in attendance here at the ISC West show in Las Vegas, I’m going to predict that you’re not here to see the show girls, or hit the blackjack tables or even take your significant other out for a few days of fun in America’s party town. The fact is that ISC West for dealers is about making money and improving your business. Whether that’s arranging for wholesale pricing for products you use often, or lining up new technologies for your sales staff to make money on, ISC West is about the money, money, money (no surprise then that the show is in Vegas, a town that is equally all about the money, money, money).

On that note, SecurityInfoWatch.com learned today of a new dealer program being developed by Tony Smith, known simply as the Security First Alarm Group (SFA, www.securityfirstalarmgroup.com).

Responding to what he says is a litany of dealer programs that give no equity, Smith – a veteran of Protection One, PSI and Adelphia programs going back to the 1980s – is seeking to turn the tables. “At the end of the day, dealers have nothing but their toolbox and their truck,” says Smith of many dealer programs which buy accounts from the dealers, leaving them no ownership.

The SFA program may not be end-all, be-all perfect dealer program, but Smith is offering promises of no dealer holdbacks or guarantees, no required exclusivity, mid-pack multiples (up to 30% on renewal incomes), and paid warranty service in an effort to attract dealers. The program is focused exclusively on residential alarm systems, and aimed almost exclusively at homeowners with Beacon scores of 650 or better (650 or better tends to put consumers in the good to excellent credit rating). Customers will see a 48-month contract with the possibility to cancel a location’s contract early if they sign up for another contract at their new location.

Smith says the company knows that to make the program work, he’ll have to do a couple things. First, he has to launch nationally, and he indicated that SFA is hiring staff right now to make that happen. Secondly, he has to make sure that attrition doesn’t eat the business plan out from under him. By aiming almost exclusively at buyers with good credit ratings, and billing that’s primarily delivered as ACH, a contract change that is designed to legally enforce the contract by reporting delinquencies to credit bureaus, Smith thinks he can keep customers around. He says he also wants to make sure that customers speak directly to representatives when they need customer service, rather than face automated systems, and SFA is even touting grand plans of a website where customers and the manufacturers of their products can interact. Smith says they’re not shooting for low-end on systems to make a quick buck, but instead are focusing on technologies from Linear, DSC, GE, Honeywell and others that are known to stand behind their systems.

And while it’s fine to promise big, some dealer programs have proved they don’t have the financial wherewithal to stick around. SFA is trying to combat that problem from the get-go. Announcing the program on Wednesday morning at ISC West, Smith said investments had guaranteed the funding for five years, and warranty service had been established with an arm of Bank of America.