Security Sales & Integration November 2021 - 60

EXECUTIVE DECISIONS
Big Idea by Ron Davis
Seek Profi t Beyond
Traditional RMR
" Multiples
are down,
and more
than likely
will stay that
way. People
who think of
RMR as only
something that
is derived from
monitoring
revenue, are
not seeing the
big picture. "
- Joe Nuccio,
President, Dealer
Partnerships, ADT
Ron Davis is an SSI
Industry Hall of Fame
inductee and President of
Davis Mergers and
Acquisitions Group Inc.
Also known as The Graybeards,
the company is
active in acquisitions and
mergers exclusively in the
alarm business.
60
▶ I ASKED MRS. BARNES, my English
teacher, what she thought I should do - become
an advertising copywriter or, more likely, a doorto-door
salesman. Th e copywriter was my idea,
the door-to-door salesman, my teacher's. I'm sure
she would never have guessed that for the past
15 years, more or less, I have written a monthly
column about successful people in our industry,
and how they got that way. I recently was asked
if there was any kind of secret to my longevity in
writing the same type of column over and over
again, interviewing hundreds of the industries
busiest movers and shakers. And there is a secret:
for the most part, I only interview nice people
who I like and respect. It seems to be working, I
haven't been fi red yet!
Th e subject of this month's column is a senior
executive with ADT. In fact, he is the president
of one of the company's most profi table businesses,
dealer partnerships. It's an important role for
Joe Nuccio, who is also an SSI Industry Hall of
Famer. For Nuccio, it comes naturally. Everybody
likes him and of greater importance, he
likes everybody he meets. His philosophy could
be summed up exactly as the great American philosopher
Will Rogers once said: " I never met a
man I didn't like, " and he meant it.
When asked to describe his business unit, he
called it " awesome, " and spoke of the 190 dealers
that he and his team look after. Th ese are all
ADT Authorized Dealers, and are independent,
and if you think a kindergarten class of children
would be hard to manage, try managing a group
of almost 200 independent alarm dealers who all
think they know the business. And because of
what Nuccio has done in managing this business,
he has drawn the respect and admiration of not
just the fi nancial community (who gives him a
pretty good scorecard), but also pretty much the
rest of the industry. In case you haven't guessed,
I really like Nuccio, and we have become good
friends. During our hourlong interview, I got
more pearls than I would've thought possible.
Nuccio says, " Multiples are down, and more
than likely will stay that way. People who think
Security Sales & Integration NOVEMBER 2021
rdavis@graybeardsrus.com
of RMR as only something that is derived from
monitoring revenue, are not seeing the big picture. "
Fire systems integrators are learning that
RMR from test and inspection contracts can be
just as predictable, even more so, than monitoring
revenue. Alarm dealers are adding other
types of services - think keys and locksmithing,
whole house warranties, structured wiring,
sound systems, and the list goes on.
All these products lend themselves to ongoing
contract relationships. Service contracts, as
an example, are most often used in pricing for
fi re prevention, test and inspect programs, and
almost any other element of the security system
you can think about. Today's alarm dealers/integrators
are always thinking about changes that
will make their business more predictable, duplicatable
and profi table. And while multiples
are down, slightly, for traditional RMR, they are
seen as being more stable and more predictable
than some of the other types of RMR.
I'm not talking about " greener pastures, " but
rather real and enduring cash fl ow revenue from
products and services that never were part and
parcel of the traditional alarm business. I remember
working with Michael Karch, formerly the
president and CEO of Floyd Total Security, and
also a good friend. We helped Karch sell his company
in Minnesota's Twin Cities area for substantial
dollars, and now, a year later, he is enjoying
the fruits of his labor. What he tells me is that
the big " secret " of his company is that he built up
a substantial lock and key business that became
one of the largest in the area.
Th e real secret was not that it was successful
but that the people who handle those customers
also learned how to ask the question, " Mr.
Customer, have you given any thought to adding
a home security system? We can help you with
that, also. " So, many of the customers, both commercial
and residential, went on to become a signifi
cant part of the value of the business.
Today, Nuccio enjoys the success and quality
reputation he has built up over the years. ADT
is building an enviable track record of running
successful businesses. I think you'll be seeing a
lot more of that in the next few years. And, more
than likely, those divisions that are contributing
to that success will be managed by people who
think like Nuccio. Th ey have never met a person
they didn't like. Well, maybe one or two, but
that's another column.
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Security Sales & Integration November 2021

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