What do termites, diamonds and security have in common? All three are components of the history of this year’s SDM Dealer of the Year. Sonitrol began when Al Cronk, a police officer, was interested in verifying alarms using audio; Bob Baxter invented microphones to detect termites in trees. The two met, and it was a perfect match. As Sonitrol began developing franchises, one of the earliest, Sonitrol of Fresno, was founded in 1978. Aligning with other Sonitrol franchises in California, the company formed a corporation in 1990 and used a name one of their founders had reserved from the start: Kimberlite Corporation. Kimberlite is a rare, blue-tinged igneous rock, which when cut and polished, often contains diamonds.
From the first, Kimberlite embraced this as a metaphor for its growing Sonitrol brand, and today’s owners — who are all employees under an ESOP plan — still consider themselves “diamonds in the rough,” always striving to shine and improve.
Company President and CEO Joey Rao-Russell says when she first joined the company 19 years ago it was still family-owned; but that changed two years later when the original owners wanted to sell.
“They wanted their people taken care of,” she recalls. “They didn’t want to lose what Sonitrol was, or what Kimberlite was for Sonitrol. So one idea that came up was if we became a 100 percent employee-owned company, there were financing and tax advantages.” Over the ensuing 17 years the ESOP has shown other advantages as well.
“One of the better things that came out of it was a lot of peer review,” Rao-Russell says. “Everyone felt responsible for getting people to do better and everything became much more metric driven. It caused us to be much better at business and set us up for growth and navigating the housing crisis (of 2008). I’m not sure we would have done that if we hadn’t been an ESOP with that culture of ownership.”
From that crisis, to the current COVID-19 crisis, Kimberlite has stayed strong and steady.
From keeping their employees working and safe, to reaching out to every customer to make sure they had current contact information and assess changing needs, Kimberlite employees not only stayed on top of the crisis; they also managed to grow their business in the process. On the monitoring side, where the Sonitrol motto is “We Catch ‘Em!” the central station team assisted in the apprehension of 1,355 criminals from January to August, and was on track to nearly double their previous year’s statistics.
Ranked No. 39 on the SDM 100, Kimberlite shines as this year’s Dealer of the Year.
Today’s Kimberlite Corp.finds its company culture very much influenced by its ESOP ownership structure. In fact, when hiring for a new position, they say they are hiring future owners — not employees.
Madelaine Martinez, human resources manager, has worked for Kimberlite for just one year, and says the employee stock ownership plan (ESOP) was one of the big draws for her in coming to work here. “I personally sought out an ESOP,” she says. While not all potential employees come in knowing that is what the company offers, she feels it helps keep employees once they are hired.
“We have our share of challenges in recruitment,” she says. “But what I am impressed by with Kimberlite is the longevity of many of the employees here. We are willing to make that investment in our employees long-term because we are owners. ... The success of this company as an employee owner really depends on what each of us puts into it.”
Brian Petrille, vice president and regional manager, has been with the company since 1988. Like Rao-Russell, he has been through the transition from family-owned to ESOP and everything in between. “It’s almost like working for seven different companies, it has changed so much,” he says.
What makes the company unusual today, he says, is that it is 100 percent employee owned, which is not that common, even among other ESOP companies. “Everyone feels that they have a piece of it. Most of our employees feel that; it is a big incentive to continue working here.”
Lisa Fontillas, regional vice president, agrees. “The longer you are here, the more stock you own. It really promotes teamwork and longevity. We don’t have a huge turnover once they make it past the vesting period. It’s like working for themselves without all the stress of working for themselves.”
More than that, however, it also shows employees that anyone can succeed in the company. “There is absolutely a sense that anyone can go as far as they want,” Fontillas says.
Once hired, training and onboarding becomes top priority. As a Sonitrol franchise, Kimberlite has strict guidelines for training its monitoring center employees. “We do six weeks of training,” says Marcos Reyes, vice president and trustee. “We have a specific curriculum and training department we run them through. The first week is spent listening to sound bites, understanding the product, reports and signals, procedures and protocols. A lot of it is hands-on with a trainer next to them.”
Outside of the specialized monitoring training, the company’s focus in the past year has shifted to cross-training in addition to regular job training.
“Finding and retaining quality technicians is a difficult thing,” Rao-Russell says. “For whatever reason, as an industry we haven’t attracted them to the technical side. Who wants to run wire outside when they can sit in an office behind a computer?”
At the same time, while the ESOP is very attractive and leads to longevity, there is a downside. “One of the side effects is my people can afford to retire — and they do,” Rao-Russell says. “In 2018 we had a few retirements on the technical side. In addition to that, the Bay area is an expensive place to live and there are recruiting wars. We found that having specialized techs is great when they are here, but horrible when they are gone.”
To combat that and future-proof its workforce, Kimberlite developed a cross-training program so everyone would know something about each aspect of the business.
Focused mainly on the service department (although it touches other departments as well), this overhaul was particularly challenging, because prior to 2019, the service technicians specialized as subject matter experts, particularly in fire.
With heavy investment in cross training, technicians can work on more projects; it also increased efficiency overall.
“The intent was to cross-pollinate knowledge,” Rao-Russell says. “What we found is it made us better. We rolled fewer trucks because we were able to fix it from the service department. Because our techs could handle multiple things, if I had a tech on the West side of town on access control and one came up on video nearby, he could help with that. It also created an economy of scale to sell more things because we could pass on that efficiency.”
All of these elements foster a company culture that is both flat and inclusive. Many managers consider themselves team members more than “bosses,” and employees are encouraged to interact with each other and the management team.
“I am a big proponent of us all working together and not pulling rank,” Fontillas says. “We are all equally important to our success. My team calls me coach, hopefully lovingly. That is my role, to coach them to be as successful as they can be. I don’t need to be their boss. We are not a huge company but we do get a lot done and we all wear a lot of hats. Because we are employee-owned, I never get, ‘That’s not my job.’”
Martinez adds, “What’s different at Kimberlite is the transparency. We are educated to understand the importance of sales staff, service and monitoring, and how that all integrates together to provide a complete customer satisfaction process — we are all striving for our main mission, which is building relationships for life by exceeding expectations.”
Meeting Customer Needs
This motto is the driving idea behind Kimberlite’s relationships with its customers, as well as its approach to new technology. Almost all of Kimberlite’s customers are commercial, with many coming from the education sector, state and local governments, manufacturing, office buildings and banking. Just three percent of the company’s business is residential.
“We don’t turn residential away, but we don’t go out and solicit it,” Petrille says. “We usually either also do their business, or they have a lot of problems with break-ins.” The rest is pretty much all commercial and institutional, he says.
This is in large part because of the foundational purpose of Sonitrol, which began as an alarm verification company. Central station operators have a dedicated audio setup at their workstation to help ascertain potential break-ins and decide if dispatch is needed. (See “Listening In”.) Because of this specialization, operators often have a strong relationship with their regular customers — some of whom call in daily.
“[Often] they are on the line with that customer until the end,” Reyes says. “Maybe that customer just wants to talk about their life. The team knows there is no rush to get off the call because others will be handled. All customers are important. We go above and beyond and listen to our customers.”
This goes for police dispatch as well. “In training we push that when they have a confirmed burglary and notify law enforcement to make sure that message gets across to the police dispatcher,” Reyes explains. “Our employees are caring and like seeing that they make a difference. … We will stay on the phone as long as that dispatcher wants us to. There are several times where the officer wants us to keep them on the line until he arrives, and we will do that.”
Kimberlite also has a dedicated customer service staff who regularly visits each of the customers in their territory to walk through the site and make sure they are still getting the best coverage.
Part of this attention to detail comes from necessity. Any changes to a customer’s site can mean coverage isn’t ideal and may lead to either false alarms, or the inability to catch someone in the act of a crime. Kimberlite prides itself on both. With a constantly decreasing false dispatch rate (from 9.5 percent to 8.7 percent at last check) and an average of 1.7 false dispatches per customer, this is a metric the company is working hard to get close to zero. It’s also a big reason why the company enjoys such a positive reputation with law enforcement. (See “Close Police Ties”)
Founded around a proprietary audio technology, Sonitrol solutions are still the preferred technologies Kimberlite employs — but there are many others as well. With the advent of cloud, video verification and guarding, and cyber security, the company is continually evaluating and adding offerings to clients where they make sense.
“I try to choose solutions that will augment what is already there,” Rao-Russell says. “Most customers don’t have a budget that allows them to completely redo everything. If they want to add cloud services or access control, they can’t throw the baby out with the bathwater. We look at how we can use our automation platform to provide scalable solutions.”
That means really paying attention to what is going on in their marketplace, she says. “One technology that has become more and more necessary is video analytics. There is a lot more video surveillance as opposed to just verification because of compressed resources.” The company also incorporated cloud services several years ago, starting with managed access.
From there, the company has expanded into cloud video services and other security as-a-service offerings. That is key to increasing business, Rao-Russell says. “Frankly, the brick and mortar space is in danger. The old fashioned access control systems that are just local to their server, all of a sudden you don’t have employees in the office. How are they managing users? Those security as a service options have become more and more important as more people are remote.”
Unlike many dealers, however, the bulk of what Kimberlite does comes from the Sonitrol brand. “To a large degree we can use whoever we want; but anything that has audio attached has to come through Stanley (Sonitrol’s parent company) because those are patented,” Rao-Russell says. “Since my company as a Sonitrol dealer specializes in verification, 98 percent of all my systems have some form of verification, so we usually lead with Sonitrol and partners that augment those.”
The most recent addition to the technology side is a partnership with Cisco Meraki to offer cloud-based cybersecurity monitoring, which is compatible with other Sonitrol proprietary products.
The offering is in a soft launch right now, Rao-Russell explains. “It’s essentially a router that allows us to track if they are getting pinged. One reason we found this to be a great complement through Stanley/Sonitrol is as we are moving more into interactive services, we are having to deal with customers’ networks more often. This allows us to provide those services in a safe fashion.”
While a few security dealers and integrators have started offering cyber services, Rao-Russell believes Kimberlite is on the vanguard with this offering. “There have been some before us who took many more hits on the chin than we will; but I do think we are embracing it more quickly and we are on the forefront of having offerings and developing partnerships.”
It is a marathon, not a sprint, she adds. “We are never going to finish. I firmly believe we don’t have to leave our legacy subscribers behind to bring them into new services. ... It is a great time in the industry to really embrace change. It may be different, but no less exciting and with no less ability to be very successful.”
Learning From COVID-19
Almost any security dealer or integrator will tell you COVID-19 has been the biggest challenge to their business this year. Kimberlite is no exception — but they also say it made them stronger.
At the beginning of the crisis that was far from a sure thing, however.
“It was the best of times and worst of times,” Rao-Russell recalls. “We had just come back from a Sonitrol dealer conference (where they received a record number of awards). We were all excited and ready to bring all this great information back.We were having a senior management call when the mayor of San Francisco tweeted San Francisco is closed as of midnight. We were getting information by tweets. By a day and a half later Gavin Newsom had closed everything. It was chaos.”
Rao-Russell immediately got on a call with about 40 employees. “I was trying to reassure them we weren’t going out of businesses, and we also weren’t going to send them out to die.”
The first lesson she learned, Rao-Russell says, is that while you can’t prepare for everything, open communication goes a long way to keeping everyone safe and calm.
As CEO, Rao-Russell felt a duty to be the leader in this crisis. However, she was no epidemiologist. In a situation where advice shifted almost daily, and conflicting information was all too prevalent, she found her employees turning to her to learn what was true.
“It shocked me how much my employees relied on me to know,” Rao-Russell says. “I started trolling CDC sites and reading about epidemiology. I never thought I would list as an accomplishment that I kept my team safe. If California falls into the ocean, I have plans for that. But nobody had a pandemic plan.”
On a purely practical level, the increased levels of company communication helped procure much needed supplies. “We had group texts,” Rao-Russell says. “One manager in Bakersfield has a son who works at Costco, so he would pass on information when stock was coming in. If we ran across extra toilet paper or rice we bought more than we needed and had a pantry so people could get what they needed.”
Barring a couple minor and temporary furloughs, all employees worked throughout. “The first couple of weeks all managers sent out $50 Walmart gift cards to our employees to help with groceries,” Fontillas says. “We took the approach with customers and employees alike that they were important to us, which helped us come out of this stronger.”
Customer service reps began calling every customer almost immediately to update contact information as businesses were temporarily shuttered and more people working from home. “We didn’t wait for them to call us; we called them to make sure they were okay,” Fontillas says. “I have had numerous customers tell me we were the only vendor that reached out to them. Right from the beginning our primary goal was to reach out and let them know we are still here, still working and how to reach their service rep, giving them their cell numbers. We got really good feedback from customers for that.”
In the monitoring center, the critical work had to continue, Reyes says. By keeping just the essential monitoring employees (support people were sent home), they were able to minimize the number of people in the center and reorganize it to space them out. “COVID-19 really has made us a stronger company,” Reyes says. “From my standpoint, my department, the monitoring division, we are an essential service. My operators had to show up every day. I show up every day, too. I want them to know I am here with them on the front lines.
“I see them wearing capes, not uniforms. Giving up was never an option. It made us even closer than we were before.”
Kimberlite personnel even discovered new business opportunities. For example, while cloud services had been a popular feature set for the past few years, they were often not fully implemented. “The biggest thing from March to May of 2020 is we were inundated with requests for support on how to use it,” Rao-Russell says. “We had a data person doing nothing but resetting passwords for those who hadn’t logged in in forever.”
Customers found that they liked these services and wanted more. “They were either expanding or adding to those services, especially managed access control,” Rao-Russell says. “There are a lot of services that have been out there in the market. The attachment rate for interactive services was nowhere near where it needed to be in the past few years. I think it will grow significantly now.”
Those customer service calls began to lead to some projects as well, Fontillas says. Some customers, particularly schools, began projects early while there were no staff or students around.
To help facilitate business continuing, Kimberlite also immediately transitioned from paper contracts to digital ones — a move they say will be permanent.
“I personally think digital contracts have been fantastic,” Fontillas says. “They needed to happen a long time ago. Our sales people are much more productive. In the past they had to do the presentation, send a proposal, then go back to get a contract signed. Now they are able to send over a digital contract, and the customer ... can read it at their leisure.”
Despite the pandemic that could have slowed down the sales team, they managed to produce over $1.6 million in new sales and over $23k in new RMR in the first half of 2020, the company reports. Controller Erica Ochoa is pleased with what they were able to accomplish in spite of the challenges.
“We kind of have to succeed right now. If we don’t, we will all be affected by that and everyone understands that and realizes what is at stake. There is a real sense of ownership for everyone in it.”
Their proudest achievement of 2020 might be the skills they learned for adapting to the unexpected.
“I watched my team follow me to a place where we didn’t know where it would end up,” Rao-Russell says. “We worked together, picked each other up, navigated it and did it without missing a beat.
“We built a better team for it, which is something that could never have been planned for,” Rao-Russell says. “The silver lining is we have a remarkable team and they are a family watching out for each other.”
Now the company is taking the things they learned to move forward, Rao-Russell says. This includes an active search for an acquisition or two, as well as continuing to strive for lower false alarm rates, even better customer attrition numbers and most of all, keeping customers happy.
“Being a diamond in the rough, we are not to our finished stage yet,” Rao-Russell says. “We will continue to work and cut and polish and get better until we are. We are no longer a raw set of Carbonite, but we are not the diamond yet. It’s just that hunger and entrepreneurship and that drive — yes we have had success, but there is always more to get to.”