DEALER SPOTLIGHT: From leather to access control, Kipp Security reinvents itself

Feb 1, 2000 12:00 PM, Roxanna Guilford

Considering Kipp Security Systems' focus on high-tech access control and digital video installations, you would never guess the company started out in leather.

John Kipp founded the company in 1865 as a leather-craft and shoe-machinery supplier. "The shoe business was really big back then," says current CEO Marc Hess.

Times changed, and so did the company. Around 1960, it entered the consumer-electronics business. An early alliance with Panasonic led to its involvement in the audio-visual arena and later, digital video. In the late '60s and early '70s, the company entered the security business.

There's quite a bit of overlap between the video and security divisions, says Hess (who along with his partner, company president Andrew Anker, bought Kipp several years ago).

Over the last couple of years, the security side of the firm has grown dramatically. "It's definitely a profit center. The security side allows for the opportunity to service, install and maintain, so while it may not generate as much revenue up front, the profits continue to roll in. Security, though, accounts for about 60 percent of our revenue," he estimates.

Protecting history With its proximity to the Washington D.C. area, Kipp has a diverse clientele. "We deal with probably every major institution in the Washington area," says Hess. Clients include hospitals, government agencies and retailers.

Kipp's largest recent installation was for the National Archives and Records Administration. It involved creating a networked access control and badging system capable of creating access reports based on card swipes. The project took about four months to complete and went online in December.

Kipp has a strategic alliance with Identicard, so it used its IVIS PLUS 2000 product. The guest badges feature a background photo of the Constitution.

Part of the process involved tying together two facilities - one in Washington and one in College Park, Md. The archives used its own MIS people for technical support while Kipp handled the hardware, installation and design. It was unique for several reasons, including the complexity of user needs and client stations involved.

The archives project, however, did have many of the hallmarks of a typical installation. Kipp's focus is on high-tech access control, and most of its installations involve interfacing with a computer system, coordinating networks installing card readers and badging systems - in short, Hess says, "a lot of technical engineering."

Another installation - at the aptly named Security Square Mall - focused more on surveillance than access control. The project combined stationary and AutoDome cameras and Philips CCTV products to provide maximum coverage.

The project was completed in 1999. In the months that followed, crime at the mall dropped 25 percent, says Hess.

Picky, picky, picky A small company, Kipp can be selective about its vendors and clients. "I like to pick the markets by the products we sell. It seems to be a better way of purchasing a product and forming a relationship with people. It also gives me the opportunity to be a little different than the competition."

Last year, at a national security show, Hess was looking for something to set Kipp apart. "We found a very interesting company out of Canada called Instantel (Kanata, Ontario). They make a wristband for infant monitoring and we ended up becoming one of their authorized resellers."

This alliance with Instantel led to another installation, Frederick Memorial Hospital. The system was tested when, a few months ago, someone tried to kidnap an infant.

"It worked," Hess said. "You're not going to sell tons of those, obviously, but we already have two more hospitals that are interested."

Kipp also sells a tapeless storage product developed by Loronix. He sees the partnership as one that fits Kipp's high-tech focus, noting that the move from time-lapse recorders to hard-drive video storage is the "wave of the future." And this alliance led to an additional high-tech installation for an existing client, Baltimore Gas and Electric Co.

Its dual focus on security and video installations leads to a lot of overlap. Kipp does security installations for some of the same clients -particularly studios and conference rooms - that its video division works with. Its video-services relationship with WJZ-TV Channel 13 led to Kipp handling security for the local television station.

Matching the right product to the right client is important, but so is knowing your limitations as a company, Hess says. "It's more important to know what you don't want to do before you know what you want to do."

Such an approach allows a company to focus on its strengths and set priorities and thus enhancing client satisfaction. Customer service, Hess says, is the key to success in the security industry. In Hess' opinion, it isn't that hard to offer exceptional customer service, but few security companies do. It comes down to returning phone calls, finding the answers to customer questions and living up to commitments, he contends.

"If someone is going to spend $100,000-$200,000 with you, that's an endorsement right there. How do you live up to those expectations?"

Hess gauges customer satisfaction through formal surveys and informal conversations, and he attributes much of his customer service success to company size. Good business still relies on handshakes and personal contact. "That's never going to change - people want to be treated with respect," he says.

Challenges Like other companies, Kipp is feeling the effects of low unemployment. The industry requires skilled people, but there simply are not enough workers available.

"The industry has to face this problem and develop solutions," he says. Associations need to do a better job of communicating the career opportunities in the industry. "Reach out a little more. Show that the security industry offers career opportunities."

He has a good basis for comparison, since he is also a member of various AV associations. "I find the AV side much more proactive in trying to recruit and get the word out about career opportunities. Security seems to be lagging behind in reaching out to these people." His advice? Promote security-industry careers on campuses and offer Internet-based schooling and certification. "The industry needs to make an investment in the future now."

But staffing isn't the only challenge Hess faces. He acknowledges that staying involved in the day-to-day aspect of the business - with employees, vendors and clients - becomes more of a challenge as the company grows. He hired a consultant to help assess company procedures and productivity, and to streamline the operation.

Outside help not withstanding, he tries to stay intimately involved with all aspects of the business. He seeks to tap into the talent already in his company. For instance, he was involved in promoting one of the warehouse workers to the company's top technician. Such intimate involvement is only possible in a smaller company, and while Hess wants to see the company grow, he's "not that interested in tripling its size."

"I've worked for large corporations, and I've worked for small companies, and I believe that smaller companies are more enjoyable, more creative, more flexible," he says. "I want to wake up and make a difference."

However, Hess says that he is always looking for opportunities - like to buy existing complementary business, particularly those in the lock and access control fields.

Marketing in a new era Kipp has a Web page now (www.kippvisual.com), and that's only the beginning. Hess expects the Internet to play a bigger role in the company's marketing efforts.

"I believe the Yellow Pages of today will be totally different tomorrow. The place to put our money is with business that can go out and find our clients for us...and bring people to our Website."

He has contracted with such a company - AV Avenue. And he's convinced that the future lies online.

The revamped site will be data-driven and will include access to an online catalog and spec sheets. Down the road, the strategy will allow Kipp to enter the world of e-commerce. But for now, Hess stresses, it's the information that is important.

Looking ahead "Access control is the future - for us, at least - because the technological challenges are greater than for a company that's doing a general closed-circuit TV install or something in alarm system," he says. "Access control is more sophisticated." That allows the company to grow as the technology improves, but also, Hess notes, "the perceived value of the people doing the work increases."

Similarly, high-tech surveillance - via video transmission - will play a greater role in the industry's future." I think that video transmission is the wave of the future," he says. A single security guard or CEO, for that matter, can pull up multiple sites around the country.

Hess predicts that connectivity will become more important, and multiple systems and sites will operate from a single platform. "Wired systems will become more wireless," he predicts. "Stand-alone access control and security will be together, talking to each other." The technology will only expand as companies such as Panasonic and Philips are increasing their efforts in the security area.

"A lot of major corporations have research and development dollars invested in security. They are driving the technology," he says. "As the bandwidth becomes faster and more sophisticated, surveillance will become more accepted."

But technology isn't the only driving force. Changes in the security industry are being driven by the culture in general and a fear of terrorism in particular. People are becoming more security-and-safety-conscious. This awareness gives Kipp another entrance into the marketplace. At a recent trade show sponsored by Kipp, the company put on a one-day seminar focusing on violence in the workplace.

The seminar generated a lot of interest, increased awareness of security issues and, most importantly, distingui-shed Kipp from its competition. He thinks other firms can learn from this experience.

"Company owners should find new ways to promote themselves," he says. "If you can't offer more than a product, you are a dinosaur. As we move into the 21st century, we will see security systems as common as TV sets."

1999 was another record-setting year. America's Gross Domestic Product increased well over 4 percent, with no visible sign of inflation. The economies of Asia, the Americas and Europe are regaining momentum. Even three interest rate increases by the Federal Reserve have not slowed this growth.

The new economy is driven by technology, which increases productivity and produces both more sales and profits. Despite earlier concerns, profits continue to rise along with investments in technology.

The security industry is leading most of the economy in both sales and profit growth. Systems integrators are reporting an average growth of more than 25 percent in sales and profits in 1999 over 1998.

We all made it through Y2K fears and in the process eliminated a ton of old legacy technology. We began a base of new technologies to provide customers with increased productivity through open systems and convergence. The pace is likely to accelerate, especially in the second quarter of 2000.

There will still be turbulance. The Federal Reserve will increase rates again, mergers and acquisitions will increasingly alter the channel structure, and several traditional large hardware or manufacturers wil falter while more nimble software-focused providers will take their place.

Labor is likely to get even tighter, and dealers will have to make hard choices in focusing scarce resources on new market opportunities and technologies. They will have to explore new sources of labor and create new training development and employee retention programs. They will have to seek out and manage new alliances and be creative in providing new service-based value in what will remain a crowded market.

The business brain-dead will die more quickly and those that reinvest themselves will grow.

Headquarters: 3600 Clipper Mill Rd.

Suite 105

Baltimore, MD 21211

Phone: 800-278-6912

Fax: 410-235-7122

Website: www.kippvisual.com

Founded: 1865

Territory: Baltimore/Washington DC/northern Virginia (occasionally accepts projects outside the region)

Officers: Marc Hess CEO and co-owner

Andrew Anker president and co-owner

Don Weller vice president of security

(Kipp is privately held, with no immediate plans to go public.)

Employees: 20 (about 10 of which work for the electronic security division; there's overlap among some of the technicians and installers)

Clientele: Institutional, government and corporate

Annual revenue: About $3-$5 million annually (about 60 percent of which is attributable to security)

The business: As an integrator, Kipp Security Systems provides comprehensive security systems for commercial, institutional and government facilities. Its focus is on the integration of multiple technologies including digital video, badging, access control and CCTV.

It also provides products and services related to loss prevention, industrial or employee sabotage and liability issues.

Products used: Access control: Identicard series 9000/ IDentipass

CCTV: SSS Siedel, Philips, Ultrak, Aiphone, Panasonic

Employee Identification: Identicard (Ivis Plus 1000, Ivis Plus 2000)

Infant Monitoring: Instantel Hugs

Tapeless recording: Loronix

Intercom: Siedel

Clients include National Archives; Security Square Mall; Johns Hopkins University and Hospital; Georgetown University and Hospital; Walter Reed Army Hospital; Baltimore Gas and Electric; Frederick Memorial Hospital; WJZ-TV; New Psalmist Baptist Church; Port Discovery; National Aquarium; US State Department; Comcast Cable

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© 2012 Penton Media Inc.

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