‘Peak’

Performance

‘Peak’

Performance

Challenged with debt, higher than desired attrition, employee retention, inflation and supply chain issues caused by a global pandemic, this company managed to get completely debt-free, lower attrition, raise both wages and prices, and still make a profit — all of which resulted in a “war chest” that helped them invest in key cyber and marketing efforts.

When Jerry Howe and his wife Gayle decided to move to Salt Lake City in 1969 and start an alarm business, Jerry’s boss at the time — Bay Alarm’s Everett Westfall — asked him, “Is there crime in Utah?” Jerry replied, “If there isn’t, I might be in trouble.”

Having served in the U.S. Navy and previously worked for ADT as well as Bay Alarm, Howe had little to worry about as it turned out. In fact, a Utah-based small alarm company heard he was looking and offered to sell him the business if he could get there right away. As soon as they arrived, the owner of Day and Night Security handed Jerry the keys to two Volkswagen vans he used as service vehicles, and a written list of 130 customers; Jerry began answering calls and responding to alarms almost on the spot. While the early days were tough and required near 24/7 work — at one point prompting Gayle to put a crib mattress in the back of the van so their two oldest children, just toddlers at the time, “would know they have a father and spend time with him” — the Howes, together with their five children would forge what today is one of the premier security dealers in Utah.

Named by Gayle’s mother for the mountain peaks that surround Salt Lake City, and because it needed to be short enough to fit on the bell boxes, Peak Alarm today is still headquartered in Salt Lake, with six branch offices in Utah and neighboring states, nearly 400 employees and about 17,000 customers that the company monitors from its own UL listed 5 Diamond Monitoring center. Peak Alarm has risen steadily in the ranks of the SDM 100 Report over the years as well, from No. 69 in 2009 to No. 37 on the 2023 report.

Despite its growth and success, Peak Alarm has seen its share of challenges over the years, from false alarm issues that prompted Peak Alarm to start a security guarding and patrol division called Peak Security; to increasing competition for both customers and employees; to creeping debt that seemed to be the cost of doing business these days. By a year into the pandemic in 2021, Peak Alarm management had identified the risk that inflation and higher interest rates could pose and knew the company needed to be in a better position to not only survive, but thrive.

“We knew we had too much debt on our books that was variable, including our line of credit with CIBC that had been used for acquisitions,” recalls Fred Johnson, chief financial officer and vice president of Peak Alarm. Jerry Howe, semi-retired but still serving as company CEO, had a few years prior to this challenged the team to become completely debt free and now they determined to redouble their efforts to make that happen.

In addition to the financial debt, one of those acquisitions had come at a different kind of cost: A company Peak Alarm had acquired had much higher attrition and the team knew they would take a hit if they bought them. But the territory, employees and price all made it a worthwhile gamble.

All of these challenges seemed to come to a head at the same time, resulting in the Peak Alarm team simultaneously trying to reduce debt, raise prices and wages and lower attrition, any one of which would be a heavy lift in the midst of a global crisis. The company not only succeeded in all four of these areas, but then used some of the resulting surplus of funds to focus on measurable marketing efforts and cybersecurity, hiring outside experts for both initiatives. For all these reasons, Peak Alarm was selected as SDM’s 2023 Dealer of the Year award. Read on to find out how they did it.

Strong Family Culture

As a family-run and owned business, Peak Alarm prides itself on having a strong and caring culture. A lot of this comes from the top down, Johnson says. With an accounting and MBA degree, Johnson came to work for Peak Alarm 10 years ago after working in a few different industries.

“I was working for a construction company and looking for a change,” he says. “Peak Alarm ticked the boxes I was looking for, including a family-owned company, great structure, and a product I could really get behind: life safety and security. … Back then Jerry was still in the office running the company and I reported up through him. It was a wonderful experience and Peak Alarm is a wonderful company to work with. They always say, ‘We are a family company that isn’t just a family-owned business; we treat everybody like family.’ I have felt that since the day I came on.

“I worked for three other family-owned businesses. All three, try as they might, the family pulled all the strings, made the decisions and were sort of a closed group. You were either a family member, or you weren’t. That is probably the case for most family-owned businesses. Coming to Peak I wasn’t sure how valued my opinions would be, but almost from day one I was at the table helping with the decisions.”

Clint Beecroft, vice president of Peak Alarm, has been with the company 30 years, but had a similar reaction when he first started. “When I came to Peak it was all foreign to me. It was never supposed to be my career; it was just a job to get me through school. But I fell in love with it for all the reasons Fred did. I immediately worked with Jerry delivering parts. From day one I was just part of the family.”

It is not unusual for multiple family members to work for the company, says company President Don Weakley, who himself is married to Jerry’s daughter Julie. “Jerry has three generations working at the company. We also have employees that have three generations of family here. We have one family of four or five technicians. We truly are a collection of multiple families in the company.”

Peak Alarm takes care of all of its family members, as was the case recently when one of the branch offices had two salesmen — a husband and his father-in-law — who tragically lost their wife/daughter and needed to take time off. As they were the only sales force in the area, Beecroft picked up all sales for them and put their names down as the salesmen to ensure they would still make commissions. The company also took up a collection to help them through the hardship and donated generously as a company.

As the company has grown, one of the ways they have kept this culture so strong is by doing a lot of team-building exercises, says Julie Weakley, the company’s customer care director. “Each department is allocated funds to do something with their team,” she says. “Sometimes they invite other departments to be involved. They really become close to the point where they have really good friendships and enjoy their work environment. We do a lot of things to keep our employees happy.”

Some of the recent activities — the money must be spent on a team building activity not gifts — have included painting parties and bowling.

Don Weakley says employees themselves also help keep the culture thriving. “If you are an employee here you realize pretty quickly if you are going to fit or not. You don’t have to rely on management to tell someone to step up their game. Our employees almost police that for us. … Our retention goes really high once someone has been here more than a year.”

Still, family or not, employees do work for pay, and some years back the company struggled with frequent requests for raises. “Every day a person or two from each department would ask and it became hard to track over time how many raises we were giving and how often and what the impacts were to our bottom line,” Don Weakley recalls. When one of the company’s board members suggested giving raises all at the same time, the company moved to a standard of salary increases in June every year — although technicians always have a way to increase their wage throughout the year by meeting certain criteria for the next level increase.

While on average the increase for the past 5 years has been approximately 3 percent, in 2022 the company saw a need to do more.

“Keeping and retaining employees is our biggest challenge,” Johnson says. “In our markets, unemployment is essentially at zero. If you want a job, you can get a job.”

So in June of 2022, and again in 2023, Peak Alarm raised the average salary increase to 5 percent.

“If you take a company of our size and look at a 5 percent across the board, that is a really big hurdle,” Johnson explains. “We believed we could make enough profit to cover it, but it wasn’t a given. We went out on a limb, and luckily the results followed.”

The desired results were also there on the employee side, Beecroft says. “We had some great technicians who were loyal to us but they would come to us and say they had companies approaching them. After we adjusted pay rates, we saw that end. We have had some now say, ‘Someone came to me but no way I’m leaving. I’m happy.’”

The first year, the increased raise was to help deal with COVID-19 impacts. This year was for inflation; and the company doesn’t rule out doing it again in 2024, but will reassess once this fiscal year ends in March.

“We are committed to making sure we give our employees a raise every year that is more than inflation would indicate,” Johnson explains.

Customer Care

Raising employee wages was no easy task, and in order to pay for it, one of the things Peak Alarm needed to do was raise prices for its customers, something security dealers are sometimes hesitant about.

“All of these things happened at the same time COVID was happening,” Johnson says. “We didn’t know what was going to happen or if we would even have a company after this. I don’t want to say it was a blessing but it forced us to do certain things. Prices were changing so quickly from our vendors and the availability of stock was changing so rapidly that we were forced to do two things that were really good for our company. We streamlined our supply line and determined we were going to minimize the products we sold. Secondly, the price increases were coming so fast I would quote a customer one week and one week later they were no good anymore. Clint and I got together and decided to throw 5 percent extra on everything we quoted.

“And customers kept buying, even faster than ever. We realized we had probably been leaving margin on the table in the past. We realized it wasn’t a hardship. It just worked.”

But in the beginning the company didn’t know how customers would respond and this increase also came at a time when the company was experiencing higher than normal attrition due to a larger acquisition it had done in 2021.

“This particular acquisition we knew early on that it would result in a higher attrition rate, but it was in a geographical area we wanted a stronger foothold in,” Beecroft explains. “We would acquire not only accounts but employees and technicians. When we looked at the entire package we knew it would be worth the price we paid for it.”

Still, the company saw it’s attrition rise from 6.5 percent to 9.2 in 2021 due to a number of customers who had been neglected by the acquired company. With a goal to get it back down to 6.5 percent, Peak Alarm management took a look at what more the company could be doing to make its customers happy.

Peak already had a “white glove” approach, including intensive training of all employees. The program emphasizes the importance of providing “white-glove service” including offering, involving or treating customers with special care and attention and delivering marked extra, often unexpected effort to both customers and coworkers. This policy has resulted in happier loyal customers and employees, Peak reports.

So in 2022, faced with not only the need to increase prices and suddenly higher attrition, but also a 3G sunset that would impact more than 5,000 customers, Peak decided to dedicate a whole team to the problem, creating a Customer Care Department, under the direction of Julie Weakley. The company pulled from data entry, accounting and its central station to find the best employees to be their customers’ advocates. With full authority to offer reduced rates, new equipment, reduction in terms and more to stop them from cancelling, Peak got its attrition down to 8.5 percent in 2022 and 7.1 percent in 2023. The company is on track to reach its goal of 6.5 percent by next year.

“Our Customer Care Department consists of a core group of highly trained and seasoned team members that have worked their way up over the years in various other departments, bringing with them an extensive understanding of the scope and breadth of our business to provide the very best customer service possible to our end users,” Julie Weakley says.

As for the debt, that was officially paid off as of August 2023. How they did it was by careful planning over time, Don Weakley explains. “Fred and I sat down and looked at the highest interest rates and just paid off one debt at a time,” he says. “As we did that, it came off the bottom line, which the following year allowed us to pay off more debt. We tackled the highest to lowest rates and just paid off the lowest rate in August.”

One of the reasons Peak was able do all of these things while also eliminating debt stems from a decision made several years ago. With its own central station, Peak saw laws changing around verified response and decided to start its own security response division, now known as Peak Security, which employs on average 200 security officers.

“It’s very unique,” Don Weakley says. “Once in a while I come across another company [our size] that has both alarm and guard divisions. How we got into it was in the early 1990s police stopped responding to alarms without verification. We started off by responding to those alarms and as we grew we hired more patrol officers. Those same customers asked us if we would do guard work.”

Johnson adds that this steady influx of cash from the guard side of the business also helped them in their multi-pronged efforts to get debt-free. “It allows us to not have to use as much financing as some other alarm companies because we have that source of cash.”

It also gives them an edge in customer offerings. “A lot of companies are trying to convince their alarm customers to have video service instead of a guard,” Johnson says. “Peak Alarm is saying you can have an alarm service and still have a guard. If you don’t want that, we can also provide you with a video surveillance system monitored by us. If that is too big, you can step down to a patrol. We see it as we can offer anything you want for your security business because we offer the entire gamut.”

It also gives them an edge in customer offerings. “A lot of companies are trying to convince their alarm customers to have video service instead of a guard,” Johnson says. “Peak Alarm is saying you can have an alarm service and still have a guard. If you don’t want that, we can also provide you with a video surveillance system monitored by us. If that is too big, you can step down to a patrol. We see it as we can offer anything you want for your security business because we offer the entire gamut.”

In 2023, Peak added another option to the list: mobile live video monitoring by bringing the Checkt Bridge product — which allows them to turn customer’s existing cameras into a video alarm verification system — in-house, and monitoring it through their central station. The portable trailers are self-contained with solar, batteries, cellular communication and video equipment and designed for construction sites, special events, etc. The video uses analytics to detect vehicles or humans and then sends the video stream to Peak’s live operators in their dispatch center.

Julie Weakley says the ability to offer options like these is a direct result of keeping their monitoring in-house rather than outsourcing to a third-party central station. Peak Alarm is the only security company in its market to own and operate its own UL certified, 5 Diamond central station.

“I strongly feel that by hosting and having full control of all of our services, we are able to provide a better service experience to our end users,” she says. “Operating our own central station ensures that we can train our dispatchers to our standards and have close and meaningful business relationships with our end users. It is important to us that our customers know they are speaking with a true representative of the company who cares at a personal level about the safety and security of their home or business.”

Results & Future Plans

Now, thanks to getting debt free and successfully adjusting prices to meet the market, Peak Alarm is sitting on a “war chest” of approximately $5 million and a line of credit should they need one for any future acquisitions. Johnson says this has been “transformative” for Peak Alarm.

For example, in the past year, Peak Alarm made two big pushes in key areas. The first was to put an emphasis on marketing by hiring an outside firm to really double down on measurable efforts. Step one in these efforts was a brand new web page and social media campaign that also helped the company reduce attrition and increase customer engagement. The other was to hire a cybersecurity company with the expertise to take on that issue on their behalf.

This decision came from the realization that Peak is not an expert in either area, Don Weakley says. “We have 110 vehicles. Some alarm companies have their own auto shop, but one of Jerry’s business friends said to him once, ‘Jerry, do you know how to fix cars? No? Then don’t be an auto shop.’ This is kind of the same thing. We are experts in the alarm and guarding industry. For those areas where we need help, we have outsourced them, including website and cyber.” For more on both efforts see “Marketing Metrics That Matter” and “Hiring Cyber Experts.”

With an estimated 2023 annual revenue of $30.5 million and $830,000 in RMR, Peak Alarm is on track to not only meet but exceed its projections.

“We are on track for this year’s financial goals,” Johnson says. “In fact, we are 38 percent above where we thought we would be for top line revenue. Bottom line profits are about 40 percent higher. That is the short term. The really big goal is to hit $1 million in RMR by close of 2024,” he says.

Johnson acknowledges that won’t happen without acquisitions, but says the company is in active talks with a few promising possibilities.

But one thing they aren’t looking for is to be acquired. As an early member of NetOne, a collection of mostly family-owned independent security dealers, Peak Alarm is committed to staying the course, helping its customers and employees and the wider security industry.

“NetOne is a tight network and we share everything,” Don Weakley explains. “Ever since I have worked here if we have an issue or need advice, Jerry says, ‘Have you checked with NetOne members?’ When I do, by the next day my inbox is full of suggestions. We are all committed to staying independent.” SDM