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1 INSERT COMPANY LOGO HERE 2014 North 2013 North American American Residential SSL Certificate Security Services Company Product Leadership of the Year Award

2 Contents Industry Challenges... 3 Visionary Innovation and Performance and Customer Impact of Monitronics Security... 3 Conclusion... 5 Significance of Company of the Year... 6 Understanding Company of the Year... 6 Key Benchmarking Criteria... 7 Best Practice Award Analysis for Monitronics... 7 Decision Support Scorecard... 7 Visionary Innovation & Performance... 8 Customer Impact... 8 Decision Support Matrix... 9 Research Methodology About Frost & Sullivan Frost & Sullivan 2 We Accelerate Growth

3 Background and Company Performance Industry Challenges The residential security services industry is a relatively unpenetrated and extremely fragmented market with low technology awareness among its customers. Also, scores of marketing and sales practices have created many contradictory myths about the requirements of an efficient residential security system, which tend to mislead consumers. The cost of alarm systems also can create a barrier to their widespread growth and adoption. Given these factors, companies that employ intelligent strategies such as excellent customer service, quality mergers and acquisitions, and innovative product portfolios will be able to retain their customers and also build on their market share in the industry, thereby achieving growth leadership. Visionary Innovation and Performance and Customer Impact of Monitronics Security Awards and Recognition of Industry Leadership Monitronics is one of the largest residential security services providers in North America, with a track record of continuously following the industry s best practices. Monitronics serves more than 1 million customers, and its dealer network has more than 600 dealers. The company has a reputation for an unwavering commitment to protect the well-being and property of its customers, resulting in numerous awards and a solid foundation of customer appreciation. Frost & Sullivan observes that Monitronics continues to be recognized by the security industry in its efforts to provide high-quality service through new and innovative business methods. In 2014, for example, Monitronics was honored to accept the Police Dispatch Quality award, an industry-wide recognition of its commitment to reducing false alarms. The company was lauded for its innovation and resolve in working with law enforcement and other first responders to decrease the number of false alarms, which often create a burden by diverting resources away from actual emergencies. The stream of awards in 2014 also included the Consumer s Choice Award for the third consecutive year; the Bronze Stevie Award for the Contact Center of the Year for being the front-line customer service team of the year and support department of the year; and the Marcom Award (Platinum) for their dealer-facing magazine, The Monitor. The company s elite training program has been recognized by Training magazine as one of the nation s top 125 training programs. Monitronics is noted for achieving Installation Quality (IQ) certification for its Alarm Response Center, adhering to high standards of installation, monitoring, and customer Frost & Sullivan 3 We Accelerate Growth

4 education; and for continuing to achieve elite Five Diamond Certification, which stands as testimony to the efficiency of the company s monitoring system. The company is also a charter member of the Automated Secure Alarm Protocol (ASAP) program, which works in conjunction with city police departments to exchange dispatch information electronically, drastically reducing the turnaround time for information exchange from 3 to 4 minutes to just a few seconds. Commitment to Growth The major factor that drives Monitronics is its business model. The key to its success is running a low-risk and flexible operation. Monitronics relies entirely on its independent dealer network to handle sales, installation, and services for each of its customer accounts, while providing support to its dealers through comprehensive training programs. The company s Dealer Development and Dealer Support groups are mutually beneficial programs that provide one-on-one support to every dealer, thereby enabling them to run a healthy business and acquire quality accounts with strong credit scores. Other key growth drivers for Monitronics include their growing subscriber account purchase volumes; increasing average subscriber revenue per month; and the very nature of the residential security services market itself. This marketing has traditionally been fragmented and underpenetrated, thereby creating opportunities for mergers, acquisitions, and continuous growth. Monitronics made a bold strategic move with the acquisition and integration of Security Networks, which was completed in April Its impressive customer portfolio and quality accounts represented a great growth opportunity for Monitronics. This acquisition not only gave Monitronics an additional customer base, but also strengthened the company s dealer network and helped to further establish its position as an industry leader. Monitronics has excellent partnerships with the leading distributors and manufacturers in the industry, and this acquisition added service and technician specialists to its existing team. The combined synergy of both companies reinforced Monitronics customer service quality and created greater value for its customers, thereby driving revenue and market share growth for Monitronics. Delivering a Quality Customer Experience Monitronics maintains strong relationships with the industry s top brands. Its expanding product/service portfolio has always been in tandem with the changing demands of the company s customers, which is directly reflected in the scope of products and services that Monitronics dealers offer to the end customers. New technology is rapidly transforming the home security industry, and Monitronics is expanding its role on the leading edge of smart home technology. Their solutions maximize effectiveness of home security measures, as well as adding remote home management not just of home security, but a Frost & Sullivan 4 We Accelerate Growth

5 wide range of other devices such as thermostats, lighting, door locks and video cameras. To support its dealers, Monitronics has designed an exclusive econtract mobile application that helps eliminate hard-copy paperwork that is traditionally filled out for a new customer contract. Using econtract, salespeople can now quickly complete an electronic version of each contract in the customer s home, on an ipad or Android tablet. econtract walks a salesperson through the required steps to fill out all of the paperwork. Once the customer has confirmed the information and acknowledged his or her understanding of it, the salesperson only needs to press the submit button. A PDF copy of the contract is then sent instantly to the dealer and the customer. Monitronics delivers value to its customers not only through new and innovative products, but also through high-quality service. In addition to the award-winning Alarm Response Center, the company also includes several attractive value additions in its service packages. This includes the Free Move Program, which allows customers to move their security systems at no charge when they change houses; and the Neighborhood Crime Report feature on its website, which provides customers with alerts and updates about crimes happening in their neighborhoods. These initiatives are classic examples of Monitronics extending its efforts to deliver greater customer value and enhanced customer satisfaction. This, in turn, leads to lower customer attrition and growth in the company s customer base, resulting in strong EBITDA growth of more than 27 percent year on year (YoY), as observed by Frost & Sullivan. Conclusion Monitronics holistic approach toward providing an innovative and complete solution, coupled with its strong focus on customer value and customer satisfaction, clearly demonstrates the company s expertise in the residential security services market. With a clear focus on continuous best practices to introduce innovative approaches, reach endusers, and improve its existing solutions, the company justifies its ability to grow tremendously. With its strong overall performance, Monitronics has earned Frost & Sullivan s 2014 Company of the Year Award. Frost & Sullivan 5 We Accelerate Growth

6 Significance of Company of the Year To win the Company of the Year award (i.e., to be recognized as a leader not only in your industry, but among your non-industry peers as well) requires a company to demonstrate excellence in growth, innovation, and leadership. This kind of excellence typically translates into superior performance in three key areas: demand generation, brand development, and competitive positioning. These areas serve as the foundation of a company s future success and prepare it to deliver on the two criteria that define the Company of the Year Award (Visionary Innovation & Performance and Customer Impact). This concept is explored further below. Understanding Company of the Year As discussed above, driving demand, brand strength, and competitive differentiation all play a critical role in delivering unique value to customers. This three-fold focus, however, must ideally be complemented by an equally rigorous focus on visionary innovation to enhance customer value and impact. Frost & Sullivan 6 We Accelerate Growth

7 Key Benchmarking Criteria For the Company of the Year Award, we evaluated two key factors Visionary Innovation & Performance and Customer Impact according to the criteria identified below. Visionary Innovation & Performance Criterion 1: Addressing Unmet Needs Criterion 2: Visionary Scenarios Through Mega Trends Criterion 3: Implementation Best Practices Criterion 4: Blue Ocean Strategy Criterion 5: Financial Performance Customer Impact Criterion 1: Price/Performance Value Criterion 2: Customer Purchase Experience Criterion 3: Customer Ownership Experience Criterion 4: Customer Service Experience Criterion 5: Brand Equity Best Practice Award Analysis for Monitronics Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below. RATINGS GUIDELINES The Decision Support Scorecard is organized by Visionary Innovation & Performance and Customer Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each criteria are provided beneath the scorecard). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies. Frost & Sullivan 7 We Accelerate Growth

8 The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players in as Company 2 and Company 3. DECISION SUPPORT SCORECARD FOR COMPANY OF THE YEAR AWARD (ILLUSTRATIVE) Measurement of 1 10 (1 = poor; 10 = excellent) Company of the Year Visionary Innovation & Performance Customer Impact Average Rating Monitronics International Inc Competitor Competitor Visionary Innovation & Performance Criterion 1: Addressing Unmet Needs Requirement: Implementing a robust process to continuously unearth customers unmet or under-served needs, and creating the products or solutions to address them effectively Criterion 2: Visionary Scenarios Through Mega Trends Requirement: Incorporating long-range, macro-level scenarios into the innovation strategy, thereby enabling first to market growth opportunities solutions Criterion 4: Implementation Best Practices Requirement: Best-in-class strategy implementation characterized by processes, tools, or activities that generate a consistent and repeatable level of success. Criterion 3: Blue Ocean Strategy Requirement: Strategic focus in creating a leadership position in a potentially uncontested market space, manifested by stiff barriers to entry for competitors Criterion 5: Financial Performance Requirement: Strong overall business performance in terms of revenues, revenue growth, operating margin and other key financial metrics Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market Criterion 2: Customer Purchase Experience Requirement: Customers feel like they are buying the most optimal solution that addresses both their unique needs and their unique constraints Frost & Sullivan 8 We Accelerate Growth

9 Customer Impact BEST PRACTICES RESEARCH Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company s product or service, and have a positive experience throughout the life of the product or service Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels. DECISION SUPPORT MATRIX FOR COMPANY OF THE YEAR AWARD (ILLUSTRATIVE) High Competitor 3 Monitronics International Inc. Competitor 2 Low Low Visionary Innovation & Performance High Frost & Sullivan 9 We Accelerate Growth

10 The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at bestin-class levels. 360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS Frost & Sullivan 10 We Accelerate Growth

11 Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Our awards team follows a 10-step process (illustrated below) to evaluate award candidates and assess their fit with our best practice criteria. The reputation and integrity of our awards process are based on close adherence to this process. STEP OBJECTIVE KEY ACTIVITIES OUTPUT 1 Monitor, target, and screen Identify award recipient candidates from around the globe Conduct in-depth industry research Identify emerging sectors Scan multiple geographies Pipeline of candidates who potentially meet all bestpractice criteria 2 Perform 360-degree research Perform comprehensive, 360-degree research on all candidates in the pipeline Interview thought leaders and industry practitioners Assess candidates fit with best-practice criteria Rank all candidates Matrix positioning all candidates performance relative to one another 3 Invite thought leadership in best practices Perform in-depth examination of all candidates Confirm best-practice criteria Examine eligibility of all candidates Identify any information gaps Detailed profiles of all ranked candidates 4 Initiate research director review Conduct an unbiased evaluation of all candidate profiles Brainstorm ranking options Invite multiple perspectives on candidates performance Update candidate profiles Final prioritization of all eligible candidates and companion best-practice positioning paper 5 Assemble panel of industry experts Present findings to an expert panel of industry thought leaders Share findings Strengthen cases for candidate eligibility Prioritize candidates Refined list of prioritized award candidates 6 Conduct global industry review Build consensus on award candidates eligibility Hold global team meeting to review all candidates Pressure-test fit with criteria Confirm inclusion of all eligible candidates Final list of eligible award candidates, representing success stories worldwide 7 Perform quality check Develop official award consideration materials Perform final performance benchmarking activities Write nominations Perform quality review High-quality, accurate, and creative presentation of nominees successes 8 Reconnect with panel of industry experts Finalize the selection of the best-practice award recipient Review analysis with panel Build consensus Select winner Decision on which company performs best against all best-practice criteria 9 Communicate recognition Inform award recipient of award recognition Present award to the CEO Inspire the organization for continued success Celebrate the recipient s performance Announcement of award and plan for how recipient can use the award to enhance the brand 10 Take strategic action Once licensed, share award news with stakeholders and customers Coordinate media outreach Design a marketing plan Assess award s role in future strategic planning Widespread awareness of recipient s award status among investors, media personnel, and employees Frost & Sullivan 11 We Accelerate Growth

12 About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit Frost & Sullivan 12 We Accelerate Growth

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