SDM 2018 Dealer of the Year: Bates Security/Sonitrol of Lexington
Bates Security/Sonitrol of Lexington recently chose to branch out through a combination acquisition and startup; as well as pilot a groundbreaking standardization program — all while never compromising the family atmosphere that started it all.
Lexington, Ky., is known for a few things: horses, bluegrass, bourbon, a historic downtown area, and — when it comes to security systems — Bates Security/Sonitrol of Lexington. Started in 1969 as Sonitrol of Lexington, the Bates family moved from Dallas in the early 1980s after purchasing the franchise from Ann Miller.
Sonny Bates, his wife Pat, and their two young sons made the move after Sonny, a retired Dallas police officer, decided to strike out on his own with a Sonitrol franchise. “I was a police officer for nine years and didn’t know anything about alarm systems other than answering them,” Sonny Bates recalls. “But we were catching burglars on the Sonitrol systems. I thought I would give it a shot and ended up joining the Sonitrol Dallas franchise. I figured I could do this, so I started looking into becoming a Sonitrol dealer on my own. We bought the Lexington Sonitrol and started out.”
Starting a new venture is never easy, but Sonny’s wife Pat had worked in accounting, so she took over that department in Lexington, while Sonny focused on being sales manager and head installer. “It was a great partnership to get started,” he says.
They also found new opportunities they didn’t initially expect. Sonitrol is primarily a commercial enterprise, but not wanting to turn any potential customers away, Sonny and Pat soon found that residential sales needed a different approach. “We were doing residential systems but the Sonitrol product wasn’t an ideal fit for that,” Sonny Bates says. So they chose another product line more tailored to residential security — Honeywell. “When you are trying to put lights on the board, anybody that is a potential customer you want to grab them,” he says.
Initially the second company was called ADR (Affordable Dependable Response); but when it became clear several years later that the two Bates sons were interested in continuing the business, the name was officially changed to Bates Security in May 2011 to reflect the family name.
On the Sonitrol side, over time the Bates family has been able to turn the brand into a local staple when it comes to security. In fact, in the downtown Lexington area (pictured on the cover), Sonitrol of Lexington secures one of the most prominent buildings — the “Big Blue Building” as it is locally referred to — as well as the building in front of it, and, when complete, will also secure the newest project, City Center, all together the entire city block.
Bates and Sonitrol both enjoy an especially close relationship with local police. “The Sonitrol brand is audio detection and verification,” says Crystal Newton, marketing manager. “When the signal comes in the operator knows exactly what is going on. It helps police respond faster to Sonitrol alarms than traditional alarms; but we also install traditional alarms with the Bates brand.” The police trust the Bates and Sonitrol names, she says, so much so that it recently became a marketing slogan for the company.
In 2010, Sonny and Pat Bates were able to turn over the day-to-day control of the business to both of their sons. Jeremy Bates now serves as the company president based in Lexington and Bryan Bates is vice president, and general manager of the Jacksonville, Fla., branch, which — like his father before him — he moved to in 2016 to start a new branch. In addition to this new venture, in late 2017 Bates Security made its largest acquisition ever, purchasing Prestonburg, Ky.-based ABCO Security and creating its third branch — and in late October 2018 added to that branch with the acquisition of a neighboring dealer that will be folded in to the ABCO brand.
But perhaps its most ambitious undertaking was stepping up to be one of two beta test sites for the Stanley Standard, developed by Stanley Black & Decker’s security divison. As Bates/Sonitrol of Lexington adapted The Standard to its own unique business model it not only led to what the company describes as a “paradigm shift,” but also significantly improved several key metrics, created happier and more successful employees, reduced attrition and helped the company adjust more quickly from a single location to a company with branches. This, along with the company’s 21 percent growth in annual revenue and 14 percent growth in RMR in 2017 and healthy estimated growth going forward, is why SDM selected Bates Security/Sonitrol of Lexington as its 2018 Dealer of the Year.
A TRUE FAMILY CULTURE
Many successful businesses will say they have a “family-like” culture, but in the case of Bates Security/Sonitrol of Lexington it is both literally and figuratively the case. It started from the very beginning.
“Pat and I were so involved in the business and when you are around your employees 10 to 12 hours a day you become friends,” Sonny Bates says. “You want to do right by them and care for them and their families.”
This attitude has carried through the years. Jerry Coy, residential small commercial sales manager, himself came from a family-owned business after selling his own insurance agency and joining Kentucky Alarm, which was acquired by Bates in 2015. “Ken and Sandy Duff owned Kentucky Alarm, which we now own. I had my own business for 22 years. The thing about the Bates family is the family itself is phenomenal. They are unbelievable to their employees and we work extremely hard, but we are all treated like we are a member of the Bates family.”
There is a “work hard, play hard” mentality to much of what goes on at Bates/Sonitrol. Many employees describe the work atmosphere as “fun” even though there is a lot of hard work. “When I interview potential employees we have videos on a monitor in the waiting area that show everything we do and inevitably they come in to the interview and say, ‘Wow, it looks like you do so many things,’” says Susan Humphrey, human resources manager. “For example, we did the ice bucket challenge a few years ago and set up a big round blow-up pool. We challenged other security companies to do it, too.”
The family atmosphere is reinforced by several events throughout the year, she says. From the annual Thanksgiving and Christmas luncheons, to the company sports teams and charity events, “family” bonding is an important factor at the Lexington office that is now being replicated both at ABCO and the Jacksonville branches. ABCO just had its first bowling and pizza party night last October, and Bryan Bates says he plans to roll out employee appreciation night and other family traditions to the Jacksonville office this year, now that the startup phase of the business is rolling along. “We are weak in that area and haven’t done those yet, but I miss those things and we will definitely be bringing them here because I think they are that important.”
Russ Ackerman, director of residential and small commercial sales, who was hired in Jacksonville two years ago to boost the residential sales in the new office, is confident that family atmosphere is already there in Jacksonville. “I have always admired the Bates company and the culture is really creative. I felt like I signed adoption papers when I was hired.
“Every office has a culture. If you don’t establish one, the office will find its own culture. The culture in Lexington and the other two locations is it is a fun place to work with great people. We all get along. We laugh a lot. We have a good time, and work our tails off. That is one of the most outstanding attributes. I could retire now if I wanted to. But I love this company. I love what I am doing and I think Bryan has done a nice job of surrounding himself with positive thinking, can-do people. We think every month is going to be a better month; every week a better week; and today is going to be incredible. Bryan brought that culture down here and hired people like that. I have never heard one person use foul language or slam a door or scream at anybody. You hear that at other places, but not here.”
Newton agrees. “When I came here eight years ago I could tell the owners had a lot of pride in what they were doing and were trying hard to live up to their father’s legacy. Everyone seemed like they were friends forever and it made me be very welcoming in turn when I would see new people come in the door. There is a lot of interaction, even after hours and weekends. We have our own kickball team, which is a really good way to meet people you would not normally have interaction with. I could tell right away people really enjoyed what they did.”
In addition to the standard benefit packages, Jeremy and Bryan Bates also implemented a company-wide bonus program several years ago as a way to incentivize employees to meet a profitability target. Every employee is awarded 5 percent of their base pay each time the company meets its six-month financial goals. “If you have been here for six months you can participate in that and so far we have paid it out every single six-month period,” Jeremy Bates says. They also reward employees in less tangible ways in the form of WOW!s A fellow employee can nominate someone, or even better a customer can write in and recognize a specific employee. The letter is read and that employee is recognized with a lapel pin at one of the quarterly company-wide meetings.
Even the recent acquisitions were family-owned businesses that have been smoothly rolled into the Bates family. “The Bates team has been nothing but welcoming and it really felt like we were part of the Bates team from day one,” says Tim Welch, ABCO Security general manager and son of ABCO’s founder. “What struck me most was the culture. Everyone I talked to here has gone out of their way to do anything they could to help us and not make us feel like we were outsiders.”
Coy adds, “I am pretty high on my own company. So many people wake up on Monday and dread going to work. I wake up every day and can’t wait to get to work and I think my counterparts at Bates would say the same thing.”