THE SECURITY INDUSTRY TODAY
What you need to know about the security industry
Companies or organizations that utilize security are in a predicament these days.
The Problem with the Security Industry Today
The security industry is undergoing a major shift. Why is that a problem?
There is a consolidation through acquisition of security companies in the United States. This trend is negatively affecting security industry clients in several serious ways.
The largest security companies are buying the regional and midsized companies.
The intention is to take the parent company public for profit driven reasons. These consolidations cause issues for customers in unsuspecting ways. There are times when the acquiring company used to provide security for the client and now through acquisition, the client is forced to take the security provider back because, the largest companies are buying up all the competition. One of the first things these conglomerates do is cut the management staff that ensures quality levels. They do this because the management and executive level positions are typically the highest paid in an organization. This process is an immediate positive effect to the bottom line of the security conglomerate. But, it takes time for the conglomerate to start losing contracts due to poor performance. Communication between clients and the security provider do not improve. We hear these complaints every day from frustrated security clients getting out of that cycle.
Customer Service, management and supervision are costly.
When security companies are owned by private equity groups or other financial institutions, the goal is to drive profits in order to sell the company for the most money. There is a common formula for this type of rollup. Eliminating customer service, management and supervision provide an immediate increase the profitability. The effect of this trick takes time to affect the security company’s sales. Most security clients don’t like to switch companies quickly. So, they give the security company several chances or may not even realize there is a drop in service for a little while. The security conglomerate is betting on this because they can exit and sell their company for profit before too many security clients realize what’s going on. Arrow Security makes Customer Service a priority.
Client size, Security conglomerates have massive contracts.
Size does matter, in this case.
Change, it’s understandable the hesitancy in switching security companies.
Guard agencies are trying to offer too many services.
Invoicing – Customer complaints about invoicing are more common than one would think.
This consolidation has never been seen before in this industry. We know this because Arrow Security has been in business for 35 years. We aren’t promising that there will never be any problems. We will promise that we will always be here to address those problems with our supervision, management and ownership.
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