SDM 2019 Dealer of the Year: CPI Security of Charlotte, NC
CPI Security has found that doing all functions in-house is the key to providing a first-class employee experience, staying on top of the latest technologies and keeping customers happy and engaged — all of which drive growth.
From its humble beginnings in a Toyota Corolla, CPI Security — originally Crime Prevention Inc. — has operated with a singular focus. As founder and CEO Ken Gill says, “Dad told me a long time ago if I take care of my employees, the employees will take care of the customers.” That, combined with a drive to always move forward and keep the customer experience top of mind, has served Gill and his company well.
In fact, this isn’t the first time CPI was named SDM Dealer of the Year: Their first award was in 2000, just nine years after the company’s official founding. From its beginnings as a branch office of the company Gill and a high school friend ran in Florida in the 1980s (it was officially spun off in 1991), to today, there have been a lot of changes both in the company as well as the industry.
But Gill says there is some Déjà vu or symmetry to once again winning Dealer of the Year nearly 20 years later. Back then, CPI was just breaking ground on its new headquarters building situated on a 37-acre site he envisioned eventually developing into a business park.
“At that time I said this will be the only building I will ever build,” Gill recalls. “We moved out of a 9,000 sq. foot facility to 44,000 sq. feet. My banker called it the CPI world headquarters.” They also opened a monitoring station for their 2,000 accounts with a goal to get to $1 million in recurring monthly revenue (RMR). Today, CPI monitors more than 200,000 customers and is approaching $10 million in RMR. They also just moved into their newly expanded headquarters adjacent to the building that was in-process in 2000.
Ranked No. 9 on the SDM 100 and with a 2018 annual revenue of $121.3 million ($9 million in RMR), CPI shows no signs of slowing down.
“We have grown a lot,” Gill says. “Certainly the people are different; the needs are different; the technology is way different — we were just starting to look at cellular communication back then. I’m not going to say this is the last building anymore. When we built the first building I was going to build an office park, but the only additional building we built was for ourselves. I thought I would rent [a building] out for some big company. I never thought it would be my own.”
The new headquarters is not just bigger. With amenities such as a full-service restaurant, a staffed fitness center, expanded training facilities, and recreational areas including basketball courts and a walking trail — not to mention a brand new state-of-the-art monitoring center — the new facility truly helps the company embody its core values of integrity, having fun, fostering success, honesty, quality service, teamwork, fairness and charity.
“Our goal with everything is to make sure we control the customer experience and everything from the initial sales call to installation, customer service and monitoring,” says Brent Uhl, chief operating officer. With everything they could possibly need located on-site (even an in-house advertising agency), CPI is poised to do just that.
CPI’s accomplishments in the past year aren’t limited to the expansion, however. The company began 2019 by introducing a new InTouch SmartHub panel, launching a video analytics/AI platform called IVAN (Intelligent Video Activation Notifications); going live with ASAP to PSAP in many of its jurisdictions with a goal to complete the process by the end of this year; and launching a new SmartPay platform that offers both financing and flexible monitoring contracts.
As the largest privately held security company in the southeastern U.S., CPI keeps its residential and small commercial customer base happy by continually offering new technologies and services such as these, as well as by being a good neighbor and citizen of the community. Through its Community Partnership Program, CPI donated more than $1 million to charitable organizations in 2018 and is on track to do the same in 2019. They also work closely with local police and sponsor both professional and amateur sports teams to keep their name visible in the community.
All these efforts, and more, make CPI Security a company worthy of being SDM’s 2019 Dealer of the Year.
Putting Employees First
Closeness and community begins at home with CPI. While customers are always top priority, the company embodies Gill’s father’s advice from years prior. “We work hard, but we have fun, too,” says Heidi Cowley, senior vice president, marketing and communications.
Steve Butkovich, chief technology officer, agrees, adding that the new space is even more conducive to a positive work/life experience and balance.
“I came from a large corporate environment,” he says. “While CPI is corporate, it is still a very small company. Ken is involved in the day-to-day operations. Even though we have 750 plus employees, we make a point to try to know everybody and connect with everybody. There are not a lot of lines between the employees and the executive team.”
In fact, at the new on-site Ilios Café at CPI (operated by Xenia Hospitality, a local upscale restaurant group), there are several large tables designed to foster these interactions. “Something as simple as this provides the ability for executives to have lunch on a regular basis with our frontline people,” Butkovich says. “We can sit and converse with central station operators. That has changed our corporate culture for the better. You never know who you are going to sit next to.”
The privilege goes both ways, he adds. “Someone said the other day that it is so special to be able to talk to a customer care operator to be able to understand their challenges,” Butkovich recalls. “Then someone else pointed out you don’t realize how important it is to the employee. They walked away and said, ‘I just had lunch with our CTO.’
Food features in many important ways in the CPI corporate culture, laughs Jennifer Snellgrove, chief people officer. From Starbucks gift cards to a fancy dinner to celebrate milestones with the company, to training sessions over breakfast or a catered lunch, “The best way to someone’s heart is through their stomach,” she says. “We believe in feeding people. It is amazing how quickly they come to training and not complain if you feed them.”
The new headquarters also features new training facilities to enhance the company’s CPI University. Training and onboarding is critical to much of what the company does and is one of the keys to attracting and keeping talent in an industry struggling with workforce development right now.
“I would love to say we have a silver bullet for that,” Snellgrove says. “But I don’t think we are any different than any other industry as far as trying to find top talent with under 4 percent unemployment.” She does credit the training with making things easier, however. “We have been pretty lucky and haven’t had many issues finding great technicians. We are looking at a lot of different avenues to find top talent. They don’t have to come from the security industry. We have CPI University and we will train them.”
Depending on the position that training can take anywhere from a month to six months, she adds. “We don’t let them out there until they are fully trained, and understand the products, how they work and how they integrate. It is very intense.”
Gill adds, “Our employees know our customers and our business better than anybody. That is because of the continual training that is all run under one group. It is very important to us. Years ago we may not have spent as much time on training. But we learned that the more training we gave them, the better the outcome, and the more likely they are to stay.”
Once employees are initially trained, there are ongoing training opportunities, as well as plenty of recognition, both in the headquarters and at the 10 branch offices. Healthy competition is a motivating force. Customer feedback surveys are one source for that, says John Shocknesse, vice president, customer care.
“If you have done a great job it is one thing if your boss says it; but if the customer says it we want all employees to see and hear that,” he says. “If we get particularly good feedback it is scored on a number scale. We have a leaderboard that shows what the trending score is. Some of the awards for being at the top of the board include gift cards or free lunches (of course!). The company also conducts monthly and sometimes one-day contests. But the true incentive isn’t monetary, he adds. “It gives financial incentive, but more importantly they feel like they are being recognized for what they are doing.”
Another competition goes on between the sales teams at all the different branches, Snellgrove says. “We have a championship belt (WWE style) we pass around. We team up with marketing and everyone gets very excited over it. We try to make sure everyone is having fun.” From Halloween costume contests, to charity events to an annual company picnic that all the branches are invited to, fun features prominently in the company culture. So does fitness.
“We have a gym that is outstanding and fully staffed,” Uhl says. “We have a fitness director that will put together plans for them. We make sure we keep people healthy and engaged.” For branch offices, there is reimbursement for local fitness facilities.
All of these benefits and perks serve a key purpose, Shocknesse says. “I have been here for so long, I was here when we were much smaller. What is really amazing is we have grown but we haven’t lost touch with the family aspect and how important the people are who work here. Nobody is a number. They all have names and families and lives that we recognize. It is not just the executives or sales reps. We do a lot of recognition. Regardless of your position you feel like you matter and people care about who you are.”
For example, all employees who have worked for CPI for 10 years are given a Rolex watch, regardless of their position. “It doesn’t matter if you are an executive or a front line employee, everyone chooses from the same catalog,” Snellgrove explains. “The employee chooses the color, the face, the style. Then we have an amazing dinner at an upscale country club to celebrate the 10- and 20-year employees. We have the employee come up to the front and say why they stayed here so long and then Mr. Gill reminisces with them about their experience with the company.”
At 20 years, Snellgrove and Gill personally contact the employee. Snellgrove then talks to them about what they would like to mark that milestone. “I say, ‘What would you want for your 20 years of service?’ We have had people go on trips for a week. One went on a cruise with their children. We had someone who needed a new refrigerator; so we gave them that, and a weekend trip to Charleston. We customize it for the employee and together come up with something that is memorable.” As a 28-year old company, she says they have a few employees coming up on their 30-year anniversary, so they are in the process of figuring out how to mark that milestone.
Another reward is the Presidential Leadership trip, which is also open to all departments. “We take our top 10 percent in every department plus a guest,” Snellgrove says. Each department has its own criteria, from how quickly they answer the phone in customer service, to individual goals in human resources.
Not surprisingly, CPI has won multiple local awards for best place to work, earning best employer of North Carolina and South Carolina consistently since 2014. “We recently received one from the city of Charleston and we didn’t even know we had been nominated,” Snellgrove recalls. “We were nominated by a customer.”
Smarter Sales & Technology
While CPI may be a fun place to work, that work is serious — but rewarding — business. “The life and death of what we do here is so important,” Cowley says.
It isn’t easy to be in the residential security industry these days. Some dealers combat the rapid changes and competition by increasing their focus on commercial customers. But at CPI, while small commercial is a growing and important component of their business, the residential security business remains strong. CPI services approximately 189,000 residential customers and 13,000 commercial customers across a nine-state region, and has experienced double-digit revenue and RMR growth for the past three years. Growth for 2019 and 2020 may not quite match that same rate, but part of that is intentional, explains Eric Schachner, chief financial officer.
“The slowdown in revenue is … directly a reflection of the change in the business model to CPI SmartPay and short-term agreements,” he says. “But the overall impact is positive since it reduced our creation cost.”
Gill is optimistic the adjustment will happen quickly. “We had double-digit RMR growth for as long as I can remember. We are fighting hard to get there this year, but we are very close … We included SmartPay and did see some slowdown. But we are in the high single digits.”
SmartPay allows for flexibility in financing and contract terms, giving customers the option of paying outright for the system in exchange for no-contract monitoring, though only about 10 percent of customers currently use that option, Uhl says. “There have been a lot of changes in the industry and we wanted to be able to offer clients a no-contract option … Internally, it is an opportunity for us to increase our revenue per new installation.”
While residential remains the primary focus, Uhl notes that the commercial business has also grown significantly. “That division is one of our fastest growing; it has doubled in size in the last five years.”
In addition to residential and commercial business, CPI also cultivates relationships with homebuilders, Uhl adds. “We have been in the builder business for 15 years. It is a nice market segment and we partner with most of the home builders in our footprint for security and low-voltage solutions.”
One reason for CPI’s success in all three of its business divisions is a willingness to stay on top of technology trends and to bring them to customers in a way that adds real value, Butkovich says.
“We look at the security industry now versus a decade ago and bringing home automation into the security industry was one of the most revolutionary things that has happened. It is bringing all sorts of new solutions for our industry to install … Now we are talking about artificial intelligence and machine learning that will help us do a better job of responding to customers,” he notes.
CPI rolled out its own branded video analytics solution called IVAN (Intelligent Video Activity Notifications) this year. A customer receives a thumbnail notification when a person, vehicle or animal is detected, which is available through the CPI InTouch app. While CPI has offered video monitoring for several years, IVAN is a new concept.
This is just the latest in a line of what Butkovich calls smart solutions. “As we look at solutions today that have been evolving over the last decade we believe all the solutions we offer are smart … What makes something smart is that it addresses new use cases every day. Something as simple as video analytics we have today for people detection, you don’t know how important that is until you have young children in your house and you want to know if they are out of their bedroom. That is a use case. One of our messaging statements is ‘we protect what’s important to you;’ and what is important is different for everybody.”
Another interesting use case for AI that CPI is incorporating into its offerings is power-outage information, Butkovich says. “We are able to use referential data within a quarter-mile radius of a home and say, ‘You and 60 percent of others in your area also have a power outage.’
“The difference between CPI and another security company may just be one of those use cases. That is why we are offering [these solutions] — to address more customer needs.”
One trend that CPI has not yet gotten on board with is DIY, though they are closely evaluating it. “The DIY channel has been appealing for a lot of dealers, Butkovich says. “For us, it’s not just a factor of meeting customer needs, but at the right price point and viability.” While not ready to announce a specific solution at the time of writing, CPI is working on something, Gill says.
“Looking at DIY, if the opportunity presents itself and it makes sense product- and leadership-wise, you will see us moving in that direction,” he says. “We need something that would be transformational or disruptive to do that. I think one of the first things we want to launch by the end of the year is a DIY channel for our existing customers by having some products they can add themselves.”
One thing Gill is particularly proud of is that all of the company’s growth so far has been organic. “We do everything ourselves. It is a one-stop shop with no affiliates. I don’t see many people do that.”
However, CPI is dipping its toes into the acquisition stream, Gill says. “We are hoping to close a small deal in December or early January. We would like to purchase folks that somewhat look like us — high quality and technology focused. A lot of people are retiring and that will create opportunities. Our goal is to continue organic growth, but see if we can’t find some strategic acquisitions either in our current market or adjoining markets.”
Not going too far afield is important to Gill, who says that density is the key to this business. “When I started the business a long time ago I said I would rather have 14 customers on one street than one customer on 14 streets.” He credits that philosophy as one reason for the company’s low attrition rate (estimated to be about 6.7 percent this year). “The way we keep attrition low is we don’t install a system for someone unless they know what we are selling and want to be part of it and can afford it. Beyond that we install it properly with our own people, we monitor it, service it, bill it right and consistently follow up to make sure it is meeting their expectation. When a site goes dark we work extra hard to quickly get a relationship with the new owner and reconnect. That is one of the benefits to density. We don’t like orphans.”
Getting the Word Out
CPI is particularly strong in marketing and customer engagement — two key elements to surviving as an independent security dealer in today’s climate. Like everything else at the company, marketing and advertising are done in-house. This gives them flexibility and creativity, Cowley says. “Sometimes it causes us to work harder because we do everything ourselves. But we do feel there are benefits. All the people involved in it are devoted to growing our business and telling our story,” she says. But the “secret sauce,” she adds, is teamwork. “The best ideas come from group brainstorming sessions, sparking conversation and having everyone contribute to something we all get excited about executing.”
For example, the company is testing ads on music streaming services. “We are looking for ways to get in front of people who have cut the cord and aren’t using the traditional means to get their information,” she describes.
Another marketing project CPI has been doing is sports sponsorships. “We started in 2003 with the Carolina Panthers and we have been a partner with them ever since,” Cowley says. “We expanded that with collegiate partnerships and professional teams. It’s a great way to engage with consumers that we can’t really reach through other channels.”
These partnerships go beyond just signage at the venue. “We have people there to interface with consumers and engage with them and talk about our services,” Cowley says. “It reinforces CPI as having an affinity with their team they are supporting.”
For the past five years CPI has had Carolina Panthers linebacker Luke Kuechly as a spokesperson. “Luke is one of the NFL’s best and smartest players,” Cowley says. “The partnership highlights the symmetry of him being the best defense on the field and CPI being the best defense in the home.”
This year CPI is also launching a new spokesperson to tout the company’s advanced technology, such as IVAN and video verification. Actor Jeff Hephner, known for his roles on “Chicago Fire” and “Chicago Med,” will be featured on spots on broadcast, cable, satellite and streaming services over the next 12 months.
Customer engagement is a top priority for CPI, from interactions at local sporting events to social media. In fact, CPI has achieved a whopping 1,390 percent year-over-year growth in social media engagement.
“What really caused that this past year was our refocus in the overall strategy,” Cowley says. “Diverse content from potential and current customers to create more value for our customers; videos; seasonal product ads; and we were able to increase engagement and leads from Facebook by utilizing the tools available. Also, having optimization goals led to more interactions than we have ever had before.”
The goal is to keep customers engaged on a daily basis, she adds. “The growth of digital media has created a more open dialogue than ever before. We now use twitter to answer questions … We respond to every single positive review to thank them; and of course if there are issues we address them, then take them offline to solve them.” If the issue is resolved positively they ask the customer to go back and amend their post.
For Gill, having a good reputation in the community is paramount, whether that means a positive interaction at a sporting event, working closely with police departments, or sponsoring or doing charity work. “We get out in front of people and are active in the community. We try very hard to make everybody happy all of the time … I would like to think we set the example for being good citizens.”