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Refusing to Compete on Price

New York Times By ADRIANA GARDELLA
 
Jessica Johnson

Sara Krulwich/The New York Times

Jessica Johnson knows she must continue to innovate if she wants her business, Johnson Security Bureau, to maintain its impressive growth rate in 2012. This year, the company’s annual sales have doubled — just as they did in 2010.

During the last meeting of our business group, Ms. Johnson talked about the continuing importance of differentiating Johnson Security and emphasizing customer service, not price. She had just returned from Building a High-Performing Minority Business, a program offered through Tuck Executive Education at Dartmouth, and said the experience had reinforced these priorities.

To differentiate itself with clients, who may use several security services, Ms. Johnson said her company focused on building relationships, understanding its clients’ different business models, and selling solutions, not security. She emphasized that there was a big difference. Often, clients will call and simply say they need a guard. Other security firms might reply, “This is how much we charge. When do you want the body there?” said Ms. Johnson. “But we ask more questions.”

Ms. Johnson has found that clients don’t always fully communicate their needs, which can go beyond having a “warm body” on site. For example, clients might reveal that a call was prompted by the theft of an employee’s purse. In that case, they may need a guard who can provide a higher level of customer service by remaining alert to who belongs on the premises. Another client may have a problem with graffiti that appears after hours and may need to install cameras.

“Do you install the cameras?” asked Susan Parker, a member of the business group who owns dress manufacturer BariJay.

“We don’t as of yet, but we’ll make a recommendation,” said Ms. Johnson.

“That’s why it’s a solution as opposed to just security,” said Alexandra Mayzler, the owner of Thinking Caps Tutoring.

Unlike many of its competitors, Johnson Security does not try to compete on price. Ms. Johnson said the company’s rates, which vary by service and client type, are toward the middle or high end of the spectrum. She finds that it is often not worth working with clients that want guards who are paid minimum wage. They don’t see the value in having a particularly attentive guard or someone who is able to manage a problem customer, she said.

When it comes to hiring, Ms. Johnson said that, as a small business, Johnson Security has an advantage. “We can really talk to our employees and understand what they want to do,” she said. Just because they didn’t have childhood dreams of becoming security guards doesn’t mean they can’t maximize their relationship with the company, she added.

Johnson Security tells its employees that they are expected to stay for at least a year, and that those who do well will be placed in situations that allow them to make more money. One employee worked as a security guard for six months before being promoted to data analyst, a position that involves collecting and analyzing a range of site-specific reports for clients, and helping Johnson Security track its use of resources, including uniforms and equipment. Another started as a guard and now holds a supervisory job that includes managing the employee review process.

In the last two years, Ms. Johnson said, the company has been able to increase its guards’ average pay rate. “We’ve gotten better at identifying quality clients and getting opportunities for our people to grow,” she said.

Ms. Johnson repeatedly emphasized the value of the executive education program she recently attended, which enabled her to work with Dartmouth business school professors on topics including strategy and implementation. As the meeting wrapped up, Ms. Mayzler expressed an interest in applying for a spot in the program — if she could find the time.