Home Security – ADT Absorbs Brink’s/Broadview, but Loses a Major Authorized Dealer

Here’s an update on ADT’s purchase of Brink’s/Broadview, which was completed earlier this year. You may remember my post on the Broadview transaction (here’s a handy link) – the fact that that the largest alarm company in the US bought the number two company received a lot of press at the time. The rest of the alarm industry was thrilled, since Broadview had earned a reputation for consistently great service spanning decades – and even though their technology was outdated, they were a formidable competitor. Alarm companies across the US rubbed their hands and chortled in anticipation that the expected downgrade in service resulting from the transfer of service to ADT would result in plenty of opportunities to sign up new customers. A recent industry publication raised an additional area of potential fallout:

Guardian Protection Nabs Third-Largest Brink's/Broadview Dealer (click this link for the full story)

A secondary benefit of the Broadview sale to ADT was the potential for scooping up some of the Brink’s authorized dealers, who might not want to work with ADT. The authorized dealer program is a significant force in the home alarm industry: fully half of the new residential accounts signing an ADT contract each year are generated by these independent alarm operators, who sell and install alarm systems under the ADT umbrella, then transfer them to ADT. My post on the ADT dealer program explains how it works, and is worth the read. The Broadview dealer program, though smaller, was a more disciplined (and more highly respected) element of the company when acquired by ADT.

It therefore caught my attention to read that Southern Alarm of Richmond Hills, GA, one of the top Broadview volume producers, had defected – and signed up with Guardian Protection Services, based in Pittsburgh, PA. I know the folks at Guardian: they run a good traditional company, with their own rapidly growing roster of authorized dealers. There’s a big difference in scale, since Southern Alarm measures its monthly new alarm sales in the hundreds per month, whereas ADT’s largest authorized dealer generates many thousands of new accounts a month. But, it’s just one more bad sign for ADT, and it’s not hard to read between the lines of this excerpt:

Clements [owner of Southern Alarm] said he was wooed by five dealer programs at the ISC West show in March [an alarm industry trade show], and within the next 30 days narrowed his decision to two potential dealer programs. He settled on Guardian, he said, because “it has similar values to Brink’s where the emphasis was on quality of accounts rather than quantity.” When Broadview Security was acquired by ADT this spring, all of its dealers and branches were acquired as well. Dealers have the option to leave ADT when their contracts expire. Clements’ contract expired recently, and he believes he may be the first dealer to leave the ADT program.

Will there be other Broadview dealers who jump ship? The answer is probably yes, and the negotiations are probably hot and heavy with the higher volume producers. When it comes to dealers, FrontPoint is happily removed from the fray, as a “next-generation” service provider with its own proven method of winning new customers . Both ADT and Broadview (and their dealers) were “old school,” focusing on traditional, less reliable security. In fact, neither ADT nor Broadview considered safer cellular monitoring a priority, and smarter interactive monitoring like what's already offered by FrontPoint (including video and mobile apps) was not even on the other companies' radar: yet we’ve been providing these advanced alarm features for over three years. ADT only recently announced its new Pulse product offering, and the jury is still out on how well they will support it (here is an update on pricing and other aspects of Pulse, since you can’t find anything on ADT’s web site!).

We’ll keep watching the industry news for you, and promise to pass on the stories that are important, interesting, or (in some cases) just plain hard to believe! And we’ll throw in a little expert opinion along the way. Tell us if you have any alarm topics you want us to cover - we'll have an angle for you.