AFA Protective Systems, Inc.: Guarding the Future

Corporate Spotlight

Written by Meghan Flynn

Thursday, 01 May 2008

AFA Protective Systems, Inc.: Guarding the Future - American Executive - RedCoat Publishing

Robert Kleinman explains how important customer loyalty has been to this New York-based fire and burglar alarm systems company’s success.

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A stormy economic climate pervades the country today, forcing most industries to seek shelter. But every industry has its day, and, right now, the alarm service and monitoring companies are shining. New York-based AFA Protective Systems, Inc. is shining with the brightest of them.AFA Protective Systems was once a northeastern subsidiary of the Grinnell Company, which was broken up after an antitrust case in the 1960s. Robert Kleinman’s father and uncle worked their way from holding stock to eventually taking over the company and adopting a militant strategy of protecting the customer base at whatever cost.

Robert Kleinman, chairman and CEO

That philosophy survives today with the new generation, said Kleinman, now chairman and CEO, who attributes the survival of the company to that philosophy. Each new salesperson is trained from day one to foster a personal relationship with the customer, and, in the last 10 years, AFA instituted a tiered bonus system linked to sales targets to motivate its staff.

“Our customer base is our most important asset, and we use whatever means are necessary to protect it,” said Kleinman. That does not mean AFA will do anything to get a sale—the company steers clear of marketing gimmicks that win customers by offering free or low priced alarm systems. “The customers that want to pay nothing aren’t the ones that are going to stay with you. We’re not interested in egos or marketshare; we’re interested in making money.”

AFA has fought some hard battles, but it has one of the lowest rates of attrition of any protective services company in the country. Any time a competitor unfairly took an account, AFA took them to court, and, eventually, the competition decided it wasn’t worth the expense. Kleinman explained that he looks at fighting for customers not as an optional expense but as a cost of doing business.

Protecting its customer base has also created a platform from which AFA is growing across the country. That growth is mostly directed by the expansion of the company’s national accounts into new markets so that AFA now, in addition to its northeastern base, has thriving offices in Georgia, North Carolina, Maryland, and Florida, and it recently opened offices in Virginia and Ohio.

“We were pigeonholed in the northeast. We had been there for 100 years, but, by the 1990s, the region had become stagnant. I know that if you don’t grow, you die, so we needed to find new markets,” said Kleinman.

Growing the team
Although the central philosophy for AFA comes from the top, Kleinman said that the company branch managers are allowed a great deal of independence.“When we hire managers, we hire them to manage,” he explained. “We want them to feel almost as though they are running their own business, with our corporate office for support.”

For the last 15 years, the leadership team and all the company’s managers have gone on a retreat together. Traditionally, the managers supplied the content, but this yearly ritual has evolved into a discussion where anyone can make suggestions or point out problems, and the group works together to find solutions.

This collaborative environment brought AFA success, but there is a lot of room left to grow. Kleinman said the company will focus on acquisitions in markets where it already has a presence and open offices as new markets open up.

The biggest challenge to growth, Kleinman explained, is a shortage of qualified field technicians, especially to meet the demand for technicians certified by the National Institute for Certification in Engineering Technologies (NICET), a certification that is critical in the fire sector.

“The middle ground is shrinking; we’re finding that either people are not qualified enough or they’ve been working in IT and are overqualified for installation and maintenance of our systems,” he said.

To compensate, AFA has a program that rewards higher levels of NICET certification with raises and continuously upgrades its benefits packages to stay competitive. Kleinman said that 12 years ago in the New York tri-state area, AFA workers decertified their union, showing they trusted the company. Providing the best benefits and opportunities in the industry is what Kleinman hopes will attract talent and prevent employees from looking elsewhere. AFA may be a growing corporation, but such dedication to its employees comes from the legacy of a family controlled business. “The direct family control makes us more invested in the results of the company,” Kleinman said. “We strive to provide the best service in the industry. Even though we’re willing to fight off competitors to protect our client list, we usually don’t have to; our customers look to us to protect their homes and businesses.”

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