2014 North American Residential Security Services 2013 ... · Background and Company Performance...

2013

INSERT COMPANY LOGO HERE

2013 North American SSL Certificate Product Leadership Award

2014

2014 North American Residential Security Services Company of the Year Award

BEST PRACTICES RESEARCH

© Frost & Sullivan 2 “We Accelerate Growth”

Contents

Industry Challenges .............................................................................................. 3

Visionary Innovation and Performance and Customer Impact of Monitronics Security .... 3

Conclusion........................................................................................................... 5

Significance of Company of the Year ............................................................................. 6

Understanding Company of the Year ............................................................................. 6

Key Benchmarking Criteria .................................................................................... 7

Best Practice Award Analysis for Monitronics .................................................................. 7

Decision Support Scorecard ................................................................................... 7

Visionary Innovation & Performance ....................................................................... 8

Customer Impact ................................................................................................. 8

Decision Support Matrix ........................................................................................ 9

Research Methodology ........................................................................................ 10

About Frost & Sullivan .............................................................................................. 12



Background and Company Performance Industry Challenges

The residential security services industry is a relatively unpenetrated and extremely

fragmented market with low technology awareness among its customers. Also, scores of

marketing and sales practices have created many contradictory myths about the

requirements of an efficient residential security system, which tend to mislead consumers.

The cost of alarm systems also can create a barrier to their widespread growth and

adoption. Given these factors, companies that employ intelligent strategies – such as

excellent customer service, quality mergers and acquisitions, and innovative product

portfolios – will be able to retain their customers and also build on their market share in the

industry, thereby achieving growth leadership.

Visionary Innovation and Performance and Customer Impact of Monitronics Security

Awards and Recognition of Industry Leadership

Monitronics is one of the largest residential security services providers in North America,

with a track record of continuously following the industry’s best practices. Monitronics

serves more than 1 million customers, and its dealer network has more than 600 dealers.

The company has a reputation for an unwavering commitment to protect the well-being

and property of its customers, resulting in numerous awards and a solid foundation of

customer appreciation.

Frost & Sullivan observes that Monitronics continues to be recognized by the security

industry in its efforts to provide high-quality service through new and innovative business

methods. In 2014, for example, Monitronics was honored to accept the Police Dispatch

Quality award, an industry-wide recognition of its commitment to reducing false alarms.

The company was lauded for its innovation and resolve in working with law enforcement

and other first responders to decrease the number of false alarms, which often create a

burden by diverting resources away from actual emergencies.

The stream of awards in 2014 also included the Consumer’s Choice Award for the third

consecutive year; the Bronze Stevie Award for the Contact Center of the Year for being

the front-line customer service team of the year and support department of the year; and

the Marcom Award (Platinum) for their dealer-facing magazine, The Monitor. The

company’s elite training program has been recognized by Training magazine as one of the

nation’s top 125 training programs.

Monitronics is noted for achieving Installation Quality (IQ) certification for its Alarm

Response Center, adhering to high standards of installation, monitoring, and customer



education; and for continuing to achieve elite Five Diamond Certification, which stands as

testimony to the efficiency of the company’s monitoring system. The company is also a

charter member of the Automated Secure Alarm Protocol (ASAP) program, which works in

conjunction with city police departments to exchange dispatch information electronically,

drastically reducing the turnaround time for information exchange from 3 to 4 minutes to

just a few seconds.

Commitment to Growth

The major factor that drives Monitronics is its business model. The key to its success is

running a low-risk and flexible operation. Monitronics relies entirely on its independent

dealer network to handle sales, installation, and services for each of its customer

accounts, while providing support to its dealers through comprehensive training programs.

The company’s Dealer Development and Dealer Support groups are mutually beneficial

programs that provide one-on-one support to every dealer, thereby enabling them to run

a healthy business and acquire quality accounts with strong credit scores.

Other key growth drivers for Monitronics include their growing subscriber account

purchase volumes; increasing average subscriber revenue per month; and the very nature

of the residential security services market itself. This marketing has traditionally been

fragmented and underpenetrated, thereby creating opportunities for mergers,

acquisitions, and continuous growth.

Monitronics made a bold strategic move with the acquisition and integration of Security

Networks, which was completed in April 2014. Its impressive customer portfolio and

quality accounts represented a great growth opportunity for Monitronics. This acquisition

not only gave Monitronics an additional customer base, but also strengthened the

company’s dealer network and helped to further establish its position as an industry

leader. Monitronics has excellent partnerships with the leading distributors and

manufacturers in the industry, and this acquisition added service and technician specialists

to its existing team. The combined synergy of both companies reinforced Monitronics’

customer service quality and created greater value for its customers, thereby driving

revenue and market share growth for Monitronics.

Delivering a Quality Customer Experience

Monitronics maintains strong relationships with the industry’s top brands. Its expanding

product/service portfolio has always been in tandem with the changing demands of the

company’s customers, which is directly reflected in the scope of products and services that

Monitronics’ dealers offer to the end customers. New technology is rapidly transforming

the home security industry, and Monitronics is expanding its role on the leading edge of

“smart home” technology. Their solutions maximize effectiveness of home security

measures, as well as adding remote home management not just of home security, but a



wide range of other devices such as thermostats, lighting, door locks and video cameras.

To support its dealers, Monitronics has designed an exclusive eContract mobile application

that helps eliminate hard-copy paperwork that is traditionally filled out for a new customer

contract. Using eContract, salespeople can now quickly complete an electronic version of

each contract in the customer’s home, on an iPad or Android tablet. eContract walks a

salesperson through the required steps to fill out all of the paperwork. Once the customer

has confirmed the information and acknowledged his or her understanding of it, the

salesperson only needs to press the submit button. A PDF copy of the contract is then sent

instantly to the dealer and the customer.

Monitronics delivers value to its customers not only through new and innovative products,

but also through high-quality service. In addition to the award-winning Alarm Response

Center, the company also includes several attractive value additions in its service

packages. This includes the “Free Move Program,” which allows customers to move their

security systems at no charge when they change houses; and the Neighborhood Crime

Report feature on its website, which provides customers with alerts and updates about

crimes happening in their neighborhoods.

These initiatives are classic examples of Monitronics extending its efforts to deliver greater

customer value and enhanced customer satisfaction. This, in turn, leads to lower customer

attrition and growth in the company’s customer base, resulting in strong EBITDA growth

of more than 27 percent year on year (YoY), as observed by Frost & Sullivan.

Conclusion

Monitronics’ holistic approach toward providing an innovative and complete solution,

coupled with its strong focus on customer value and customer satisfaction, clearly

demonstrates the company’s expertise in the residential security services market. With a

clear focus on continuous best practices to introduce innovative approaches, reach end-

users, and improve its existing solutions, the company justifies its ability to grow

tremendously. With its strong overall performance, Monitronics has earned Frost &

Sullivan’s 2014 Company of the Year Award.



Significance of Company of the Year To win the Company of the Year award (i.e., to be recognized as a leader not only in your

industry, but among your non-industry peers as well) requires a company to demonstrate

excellence in growth, innovation, and leadership. This kind of excellence typically

translates into superior performance in three key areas: demand generation, brand

development, and competitive positioning. These areas serve as the foundation of a

company’s future success and prepare it to deliver on the two criteria that define the

Company of the Year Award (Visionary Innovation & Performance and Customer Impact).

This concept is explored further below.

Understanding Company of the Year

As discussed above, driving demand, brand strength, and competitive differentiation all

play a critical role in delivering unique value to customers. This three-fold focus, however,

must ideally be complemented by an equally rigorous focus on visionary innovation to

enhance customer value and impact.



Key Benchmarking Criteria

For the Company of the Year Award, we evaluated two key factors—Visionary Innovation &

Performance and Customer Impact—according to the criteria identified below.

Visionary Innovation & Performance

Criterion 1: Addressing Unmet Needs

Criterion 2: Visionary Scenarios Through Mega Trends

Criterion 3: Implementation Best Practices

Criterion 4: Blue Ocean Strategy

Criterion 5: Financial Performance

Customer Impact

Criterion 1: Price/Performance Value

Criterion 2: Customer Purchase Experience

Criterion 3: Customer Ownership Experience

Criterion 4: Customer Service Experience

Criterion 5: Brand Equity

Best Practice Award Analysis for Monitronics

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Visionary Innovation & Performance and

Customer Impact (i.e., the overarching categories for all 10 benchmarking criteria; the

definitions for each criteria are provided beneath the scorecard). The research team

confirms the veracity of this weighted scorecard through sensitivity analysis, which

confirms that small changes to the ratings for a specific criterion do not lead to a

significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key players in

as Company 2 and Company 3.

DECISION SUPPORT SCORECARD FOR COMPANY OF THE YEAR AWARD (ILLUSTRATIVE)

Measurement of 1–10 (1 = poor; 10 = excellent)

Company of the Year

Visionary

Innovation &

Performance

Customer

Impact Average Rating

Monitronics International Inc. 9.8 9.8 9.8

Competitor 2 9.1 9.1 9.1

Competitor 3 8.7 8.5 8.6


Criterion 1: Addressing Unmet Needs

Requirement: Implementing a robust process to continuously unearth customers’ unmet

or under-served needs, and creating the products or solutions to address them effectively

Criterion 2: Visionary Scenarios Through Mega Trends

Requirement: Incorporating long-range, macro-level scenarios into the innovation

strategy, thereby enabling “first to market” growth opportunities solutions

Criterion 4: Implementation Best Practices

Requirement: Best-in-class strategy implementation characterized by processes, tools, or

activities that generate a consistent and repeatable level of success.

Criterion 3: Blue Ocean Strategy

Requirement: Strategic focus in creating a leadership position in a potentially

“uncontested” market space, manifested by stiff barriers to entry for competitors

Criterion 5: Financial Performance

Requirement: Strong overall business performance in terms of revenues, revenue growth,

operating margin and other key financial metrics

Customer Impact

Criterion 1: Price/Performance Value

Requirement: Products or services offer the best value for the price, compared to similar

offerings in the market

Criterion 2: Customer Purchase Experience

Requirement: Customers feel like they are buying the most optimal solution that

addresses both their unique needs and their unique constraints



Criterion 3: Customer Ownership Experience

Requirement: Customers are proud to own the company’s product or service, and have a

positive experience throughout the life of the product or service

Criterion 4: Customer Service Experience

Requirement: Customer service is accessible, fast, stress-free, and of high quality

Criterion 5: Brand Equity

Requirement: Customers have a positive view of the brand and exhibit high brand loyalty

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts can then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

DECISION SUPPORT MATRIX FOR COMPANY OF THE YEAR AWARD (ILLUSTRATIVE)

High

Low

Low High

Cu

sto

mer I

mp

act


Monitronics

International Inc.

Competitor 2

Competitor 3



The Intersection between 360-Degree Research and Best

Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often, companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial,

customer, best practices, and demographic

analyses. The integration of these research

disciplines into the 360-degree research

methodology provides an evaluation

platform for benchmarking industry players and for identifying those performing at best-

in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices

Our awards team follows a 10-step process (illustrated below) to evaluate award

candidates and assess their fit with our best practice criteria. The reputation and integrity

of our awards process are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized award candidates

6

Conduct global industry review

Build consensus on award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible award candidates, representing success stories worldwide

7 Perform quality check

Develop official award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice award recipient

Review analysis with panel Build consensus Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform award recipient of award recognition

Present award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of award and plan for how recipient can use the award to enhance the brand

10 Take strategic action

Once licensed, share award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess award’s role in future

strategic planning

Widespread awareness of recipient’s award status among investors, media personnel, and employees



About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth

and achieve best in class positions in growth, innovation and leadership. The company's

Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined

research and best practice models to drive the generation, evaluation and implementation

of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in

partnering with Global 1000 companies, emerging businesses and the investment

community from 31 offices on six continents. To join our Growth Partnership, please visit

http://www.frost.com.

http://www.frost.com/

2014 North American Residential Security Services 2013 ... · Background and Company Performance...

Documents

Transcript of 2014 North American Residential Security Services 2013 ... · Background and Company Performance...