What Does the Allied Universal Acquisition of USSA Mean for Your Security Company?

On July 16th, 2018 Allied Universal acquired U.S. Security & Associates for approximately $1 billion, according to The Wall Street Journal.

Already the largest contract security company in the world, Allied Universal's employee count is estimated to be 210,000+ with the acquisition. More details on the acquisition here >>

While these types of mergers and acquisitions like Allied Universal's are not unique to the security industry, they do provide unique challenges for an already highly crowded and competitive market.

How will it affect the smaller local & regional security companies when the biggest companies in the world keep only getting bigger?

How can a company with 100 or less staff members compete with an international powerhouse with seemingly endless resources and a willingness to bid jobs at insanely low rates?

7 Ways Small Security Businesses Can Compete With National Competitors

In today's article, we will deliver 7 strategies to help your security company compete with the largest guard companies in the world.

In short, your ability to compete will come down to 3 core principles:

• Customer Relationships
• Exceptional Service
• Value Proposition

Ready to dive in? 

#1 Use Your Story

Winning the hearts (and dollars) of your prospective customers is all about effective storytelling. There is something that makes your company unique, and that needs to be highlighted in all your marketing efforts.

Your story should be leveraged into a competitive angle that helps you stand out in the sales process. This can be any of the following:

• The founders story. Why the business was started, and the mission of the company.
• Your team's background. Is your company veteran owned? Are you all former law enforcement officers?
• Any specific requirements/certifications required of your officers. For example, all officers are bilingual, off-duty police officers, receive training above and beyond minimum requirements, etc.
• Your management structure. Do you offer more supervisor visits or 1-on-1 meetings with your clients?

Key takeaway: Break out a whiteboard and list all the things that make you different than your competitors. Then turn those differences into stories that can be used in your security marketing efforts and proposals.

#2 Find Your Niche

To gain traction as a small security company you have to pick a niche and get laser focused on that market segment.

Picking one target market helps you develop an intimate knowledge of your customer, and that will shine through in the sales process.

This is how the team at Reliance Security (who we interviewed last week) grew from 15 to 150+ contracts in a short period of time. They spent the first 3-years of their business focused solely on residential accounts.

They took time to learn what property managers love, hate, and appreciate. And they leveraged their existing accounts into referrals and more contracts.

Only after they grew to 100+ officers and a fully staffed management team did they begin targeting other industries.

To be clear, we're not suggesting you turn down business from opportunities outside your niche. But 90% of your business development efforts should be focused in the same direction.

Key Takeaway: Companies that boast "we do it all" are actually communicating that they're a jack of all trades and a master of none. Pick one target and become insanely good at serving that niche.

#3 Deliver Incredible Service and Results

As a small business you don't have the economy of scale to compete on price with the big companies (more on that in a bit..). So you have to compete on additional value and results.

Focus on delivering as much value to your existing clients as possible. Delivering incredible service will boost your reputation and help develop the references or case studies you need to win more accounts in the future.

Consider incorporating an automated guard tour system into your operation so you can easily identify when officers aren't doing what they're required to do.

Get ahead of issues before they jeopardize your reputation and relationships with your clients.

Finally, find a way to communicate the ROI of your services to your client. Vendors that can prove their value to the operation will be retained for long-term relationships.

Key Takeaway: Make sure you have the tools and processes in place to really deliver world-class service and results for your existing accounts. 

#4 Double Down on Customer Relationships

The advantage of working with a small business in the security industry is that the management team, and even the owner, should be easily accessible anytime there is an issue or need.

Small businesses have the ability to interact with customers directly removing the bottlenecks and bureaucracy of larger businesses. Which, creates space to deliver better experiences and exceed customer expectations.

My dad is a small business owner and I grew up hearing him say:

"Every business is going the be there for you when things are going well. But we promise to be here for you even when things go wrong. We'll make things right and be here for the long haul."

Key Takeaway: Don't shy away from being seen as a small business by emulating the management practices of the bigger companies. Go the extra mile with customer service and commit to fixing problems with integrity when they arise.

#5 Innovate Quickly

You might not have the bandwidth for massive new ideas, but you do have the ability to execute and iterate quickly—which is the key to getting results.

With less red tape to cut through and a more centralized location to brainstorm, plan, and execute, you can use innovation for a competitive edge over big businesses.

Larger companies have thousands of employees. And while that can be an advantage at times, it makes change and innovation difficult to implement.

Key Takeaway: Be quick to recognize and implement opportunities to improve your service offering.

#6 Get More Out of Less

Remember that large international companies operate on much smaller margins than small or regional sized operations.

A 2016 study by Robert H. Perry & Associates showed that the average profit margin for national and international companies at the site level was 8-10% as opposed to 14-16% for small companies.

Focus on winning and retaining accounts that are willing to pay more for great service and results. You'll have fewer accounts, but you'll make more money and you're more likely to enjoy the work you're doing.

Key Takeaway: Be willing to walk away from a deal that isn't willing to pay for quality service. You can't (and shouldn't) attempt to compete on price. That's a race no one wants to win =)

#7 Attract Better Employees

Many officers prefer to work with a locally owned business with an owner and leadership team involved in the day-to-day operations.

It's easy to feel like just another number as an employee of a company with thousands of employees.

In addition, as a SMB you can offer the ability to move up in the company as the business continues to grow and evolve.

If you bring the same level of focus to your employee relationships as you do your client relationships, you'll find that your employee retention rates will far exceed the industry average. Which is a huge advantage because turnover is insanely expensive in regards to both time and money..

Key Takeaway: Your employees are your product. Use you story, background, and passion for the business to attract and retain the top talent in your area.

Summary

We identified 7 ways small businesses in the security industry can compete with national competitors:

1. Use your story to identify with your clients and highlight your value proposition.
2. Find a niche and develop a reputation for serving that market segment.
3. Deliver incredible service and prove results.
4. Double down on customer relationships. Commit to being there through the good and the bad.
5. Innovate Quickly. Be fast to recognize and capitalize on new opportunities.
6. Maintain higher margins and be willing to walk away from low-margin deals. 
7. Use your passion and involvement in the business to attract top tier talent.

It's important to remember that business will almost always be the big sharks vs. the little guys. So maintaining high standards in the aspects of your business you can control, like customer service and satisfaction, will only help with client retention and the effects of healthy competition.