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Q&A with Daniel Demers

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Daniek Demers
Since the acquisition of VOXCOM by Reliance Comfort (formerly Union Energy) a year ago, there have been a lot of changes with Protectron and VOXCOM. As the two companies come together as one, SP&T News talks to Reliance Protectron President and CEO Daniel Demers about the transition period.



July 18, 2008
By Jennifer Brown


Topics

SP&T News: Both VOXCOM and Protectron are now owned by Reliance. What will happen with the company name now?

Daniel Demers: What started
over a year ago, and will end by the end of this year is that both
companies will end up together as part of one group now. A month ago we
announced that everything will transition to Reliance Protectron.


SP&T News
: So the VOXCOM name will disappear completely? Demers:
Eventually, but in some markets VOXCOM is very well known and we want
to ensure it will be a smooth transition. For example, in Alberta
VOXCOM is well known so we want to ensure a smooth transition there —
it’s so hard to build sales we want to ensure we do it in a smooth way
and putting everything together under one name, one system, one
infrastructure. It would be very difficult to keep operating under two
names.


SP&T News
: How many employees are there now with the two companies combined?


Demers
: It’s about 900.


SP&T New
s:  And how many customers?


Demers
: There are 335,000 customers


SP&T News
: Are you now one of the largest Canadian-based alarm companies in the country?


Demers:
ADT is the largest company in Canada but we would be the largest Canadian-based.


SP&T News
: What do you see as some of the challenges of integrating VOXCOM and Protectron?


Demers:
They are two different companies both with a very strong soul,
strong culture. When you have that you can come up with a strong
company and you hope you don’t lose too many people. VOXCOM and
Protectron are both 20-year old companies and have grown to above
average size. Both companies compete against Chubb and ADT, which are
over 100 year old companies and internationally-based companies. We are
a Canadian-owned operation competing with the big – we’re the new kid
on the block, really. In order for the two new kids on the block to
achieve what they have achieved on a standalone basis it requires
strong management and a strong employee base dedicated to making it
work. We are sure we can achieve a culture blend that helps the company
evolves to be even stronger. It’s probably the biggest challenge
because both companies are well positioned — they have good systems,
good infrastructure so it’s not so much a technologically integration
from my perspective as a cultural one.


SP&T News: You’re bringing together a Quebec-based company and a
large Edmonton-based company and traditionally they have been east-west
rivals. Do you see any particular challenges there?


Demers
: The perception is that Protectron is a Quebec-based company but
that’s not the case at all. We’re almost as much an outside-Quebec
based operation than we are Quebec-only because when we bought the
Canadian division of Protection One five years ago that gave us
multiple of acquisitions outside Quebec in Ottawa, Vancouver and
Toronto. The same applies to VOXCOM. People see VOXCOM as an
Alberta-based company with presence in Western Canada but actually it’s
not the case. Half their account base is in Ontario so when you bring
the account base in Ontario together from Protectron and VOXCOM all of
a sudden it gets us pretty good coverage in the No. 1 market in Canada,
which is Ontario.


SP&T News
: When companies come together there are always concerns
about changes in personnel. There been a number of senior people who
have left VOXCOM.


Demers
: Yes, Russell Keddie (former vice-president of business development at
VOXCOM) has left the company. He decided to pursue other opportunities.
In the first month following the aquitision a year ago (VOXCOM) CEO
Brad Sparrow did leave the company, but Brad’s brother Pat Sparrow is
still with us. There has been a certain amount of change as the
companies have been structured together.


SP&T New
s: In the U.S. market residential alarm companies are
having to deal with the fallout of what’s been happening as a result of
the sub-prime mortgage meltdown. In Canada, what are you doing to try
and plan for what might be a downturn in the Canadian economy?


Demers
: To date though we haven’t been affected by any of that.
One of the reasons there was a strong push to create the one name, one
voice, one company, one structure with Reliance Protectron was to be in
position that, if 2009 is not as good and we finally get hit by what’s
happening in the states and the residential market softens one of our
strategies is to tackle many distribution channels — residential,
commercial, national accounts and also dealer programs which work
pretty well. When you work in a referral type business and you have
strong contacts, working with outside partners to ensure you get a flow
of volume going on.


SP&T News
: Regarding the issue of false alarms and that each
municipality seems to be trying to develop a policy to deal with them,
as a national company now what’s your position on how best to deal with
a false alarm.


Demers
: It’s not very different from what we see in the states. Some
cities are more aggressive than others. We’re
trying to work with the authorities — with the fire department and
police. In some cases, to be honest,
there isn’t much we can do than to try and fight it. We must do everything we can to try and reduce
the false alarm rate – we’re among the first to implement the enhanced
verification to try to reach the customer through different ways
instead of dispatching. Technology should enable the lowering of the
false alarm rate. In some cases it’s a simple understanding of the system and it
falls back in our yard to teach customers how to use it properly.


SP&T News
: Do you mean video verification when you talk about new technology that should help with false alarms?


Demers
: Not necessarily. For video verification to have any impact we
are waiting for the ability of wireless to send video clips to the
customer no matter where they are. Video verification is neat when you
talk about it but how can you effectively do it and can you reach the
customer because if the customer has access to broadband he’s in a good
position to see if the image he sees is false or not. But can it
practically happen if people are driving or they are in an area where
they can’t get access? What we don’t know yet is what’s going to be the
level of interest of customers to participate in that. Customers would
rather pay more for a new iPhone or plasma TV. Talking to them about
security is something different — they know it’s there but it’s tough
to convince them to invest more. But by introducing the to new services
like TELEGARD (an automated, alarm-based communication service) where
the mom or the dad can be alerted to the fact the kids are home from
school because they disarmed the system by getting a quick text message
when the status of the security system has changed. It’s providing
those value-added services that go beyond security is part of what we
see happening with the introduction of web services. Everything is
going wireless to PDAs and I don’t see the technology there yet.

Another thing we are hoping for is that the interfaces between the panel
the IP open communication network will become more transparent. For the
customer or for us at the station, it should be a lot easier for us to
get in the panel and do changes for the customer or let the customer do
it themselves to disarm. Often the panels do more than what the
customer wants. Through education we need simple,
value added services to attract more customers.


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