Little JMG Secures Niche with
Big Corporate Clients

FOUNTAIN VALLEY, CA - Like most Orange County Industries, commercial security has undergone a number of changes - changes in technology, changes in the size of its market.

Another change to hit the security market according to Ken Jacobs, CEO of Fountain Valley based JMG Security Services, is a change of focus: Clients are no longer solely watching out for outside threats, but are concerned about threats from inside, as well.

Companies are paying more attention to the possible threats of workplace violence and employee theft, Jacobs said.

"If you ask any good size company, they would tell you that they could remember the last time their building was burglarized because it happened once maybe two years ago, " he said. "But they know they are losing much more and the threats to their company's security typically are from the inside. Twenty years ago you weren't dealing with disgruntled employees, workplace violence and bomb threats."

He said the security business, "follows the incidents and the technology hurries to catch up. If we don't learn from violent action and try to prevent future incidents then we are foolish."

Preventing workplace violence involves old and new security methods, Jacobs said. Closed-circuit television systems are sill a mainstay in monitoring, although today's system use remote monitoring to keep an eye on possible trouble spots. Card readers, optical turnstiles and other access-control devices help to keep unauthorized personnel from certain areas. Aside from preventing workplace violence, the system that JMG installs must also reassure employees.

JMG is a modest-size company with annual revenue of about $6 million, and 21 employees. But it has an impressive client roster.

The company has 2,000 account in the Southern California area. JMG has installed security systems for Anaheim landmarks The Pond, Edison Field, Disney Ice and Tinseltown, as well as Knott's Berry Farm, and several Disney Stores.

JMG systems are not limited to the entertainment industry, though. ICN Pharmaceuticals, PacifiCare of California, Kimberly-Clark, Home Depot, Nordstrom's and Interplay all have security systems from JMG.

"One good client can lead to another," Jacobs said.

Mike O'Donnell, assistant general manager of the Pond, said that choosing JMG over other bidders was partly based on cost and partly because JMG made an effort to establish a partnership from the get-go. "They did a great job with the equipment and are very receptive to any changes we need, "he said.

Despite its big-name customers , Jacobs said JMG is not interested in joining the acquisition binge that has captured the security industry.

"We do it an account at a time, we're not on an acquisition bent - we're letting out competition do that," Jacobs said. "[Acquisitions] alienate clients, they provide a much lower level of service …sales and customer service people are no longer familiar with their clients and it is almost invariable the case that the client suffers. We're the benefactors of that right now, we are getting tremendous amount of business from disgruntled former client of these companies that are doing a lot of acquisitions."

Much of JMG's work is done on the construction level: By the time a building is finished, the alarm systems are already installed. Nearly all of the company's clients are commercial accounts. But JMG does have a few residential clients which are primarily holdovers from the company's early years, when installing home alarms was Jacobs' main business.

Jacobs said commercial systems are more complex and challenging, and that the residential market has become too crowded. "Mass marketers have ten over the business," He said.

Jacobs said that since JMG had access to "the best equipment available," the company should concentrate on selling systems and customer service while someone else handles the technical side of things.

He noted JMG's custom-tailored work for Kimberly-Clark: He said the company needed a way to tell how may people are in its Fullerton facility at any given time. To meet that need, JMG installed optical turnstiles that control the flow of traffic into the building and keep an electronic count. Access-control tokens held by employees allow for quicker passage and track the whereabouts of individual employees.

That system works in conjunction with other access-control devices, the integration of system being another industry trend, Jacobs said.

JMG is far from alone in the Orange County security-firm market. There are nearly 270 companies, with a wide range of sixes and services, ranging from high-end market operation to smaller alarm-sales companies.

Firms such as JMG tend to be subcontractors on construction projects, concentrating on selling and installing security systems, but leaving it to other firms to handle the actual monitoring of the system and providing of other security services.

One other notable player that provides such services is Newport Beach-based Westec Security Services, a $10 million company in the middle-market commercial security field.

Westec's CEO, Michael Kaye, said that JMG doesn't compete with his form directly; he said JMG is known for being "extremely competitive prove-wise."

Much like its customers, JMG's next challenge may very will come from within.

"Maintaining our edge is our biggest challenge, "Jacobs said. Part of that challenge will be continuing to hire experienced sales agent in an industry that does not do enough recruiting, he said.

"Nobody grows up dreaming they want to be a security salesman," he said.

Jacobs said that JMG is looking for college graduates but also values employees with lots of security experience. He complained that growing competitors often have "too may rookies."

"I am really disappointed with the alarm industry as a whole with their inability to raise the level of professionalism on the sales end," he said.

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