ASIS 2007 Conference

ASIS 2007 Conference

 

Once again the attendance at this conference was strong with 24,000 reported attendees, up 2000 from 2006.It sure seemed like there were more with all the people moving into and out of the convention center. And,thankfully, this year there seemed to be a change whereby the temperature on the exhibit floor was actually not freezing. Congratulations to the comfort police and the ecology guys.

We again spent two full days on the exhibit floor and it took the two full days. This year I was accompanied by Evan Zatt, our new sales rep. It was a great learning session for Evan. There were 31 companies exhibiting for us to visit. The breakdown was like this:

 

20072006
Background Screeners2118
Database44
Drug Testing11
Fingerprint technology11
Assessments11
Other3

 

Vincera was listed as an exhibitor and had a spot set aside but it remained empty (no people, no booth, no materials). Similarly, the Steel Foundation was listed but could not be found.

The first question that is always asked is “How was the show for you?” The response I received ran the full gamut from, “if we hadn’t already paid for the show we wouldn’t even be here; this show is a total waste” to “I love this show, we meet a lot of buyers and a lot of people who influence HR”. Again, while these conferences are expensive, they are like any marketing expense, in that you have to evaluate the return on investment. Even at a cost of $8000 for a minimum presence at ASIS, if you can close even only one client that brings you $8000 in gross revenue, then over 3 years that one client pays for the show and after that it is profit to you. Meanwhile you are building a client base for future referrals and just helping to build the strength, size and substance of our company. And without growth, you are subject to losing accounts and your business shrinking. This is a very competitive market and the other 1000 background screening companies are all going after the same client base.

Seems as though the background screening activity by Canadian companies is continuing to grow. Even at the mid-year NAPBS conference, I heard the same input. This is mostly Canadian companies doing searches in Canada. While the Canadian population is only the size of California, background checks are a growing business.

What are you doing with fingerprinting? We see more government requirements mandating fingerprint searches and more background checking companies having to figure out how to do this for their clients. To complicate matters, there is some indication that the historical front-runner in the hardware and technology for fingerprints is no longer taking on new accounts for now.

I also learned that it is not an ABA requirement for banks to do fingerprint searches? I always believed this, but I was educated otherwise. The requirement is apparently only for a “comprehensive criminal record check.” Of course, they encourage an FBI fingerprint check.

There continues to be significant sales rep movement in the industry. All kinds of changes:

I was surprised to run into Melea (Solheim) Hillard of CIC/HireCheck fame (she was one of my top two sales reps back in the day) has returned to the industry with Vertical Screen after an eight year hiatus working as a manager in the security guard industry. Jim Hall (of PRSI/ChoicePoint/USIS/HRPlus) was there “knocking on doors” and looking for opportunities (http://www.backgroundscreeningjobs.com/). David Kennedy and Ezra Schneier (formerly FADV) are scouring to find a new opportunity in the industry. VanElla got acquired by Allied-Barton Security and the word is Jim Collins (formerly ChoicePoint/USIS/Lexis-Nexis) is supporting Allied in that effort. Blair Cohen, former CEO of InfoMart is no longer involved with the company and InfoMart has just added something like six new sales reps and hosted a very nice reception on Monday night for their clients, partners and advisors. Rich Flaherty is InfoMart’s new CEO running the sales while Tammy Cohen continues to run operations. Chuck Campbell has joined CARCO (not exhibiting) from ChoicePoint, as their President of Research. Bert French (formerly FADV/Applicant Insight) has recently moved to General Information Systems in their research department. Sales rep Steve Gonzales (Adrem/ChoicePoint) is looking for a new fit (see his profile onhttp://www.backgroundscreeningjobs.com/). Fred Giles (formerly with Pinkerton/ Choicepoint/USIS/ Wackenhut) has moved to National Diagnostics to build their background-checking unit; Josh Wooley has replaced him at Wackenhut. John Long (formerly FADV CEO) was there as a part owner and Global CEO of IntegraScreen. Todd Hensley (former USIS) has joined NBD in sales.

NBD again had an exhibit booth even though they are “wholesalers.” Their concept is to bring leads to their business partners (those that resell NBD products). The really talked up how they support their partners by providing them with education on all the legal requirements, how to market and how to sell their services (especially their national database), etc. So their market approach is not just be a data provider but to really help their customers grow and succeed. An interesting approach further supported when they brought Perry Morgan on last year from HireRight and Todd Hensley recently from USIS.

Locate Plus seemed to have a new energy since the turnover of CEOs there. And Tracers Info was there with competing products and a private wants and warrants file. These folks sell primarily to PIs, but also sell to CRAs for background checks.

backgroundchecks.com has added a large number of counties in IN and NM as continued strength to their database.

FADV sales executives were high on FADV being the only provider offering a full suite of HR related service where they own (as opposed to partner with) all the pieces: recruiting, applicant tracking, assessments,background checks, tax credits, etc, on to the exit interview. Other companies have most of these components,but their claim is the others are partnering with others vs. FADV owning the services. Competitors argue that the key is not just owning all the parts but being the best of breed in all the parts. And, most important, is executing on every order to the customer’s satisfaction, and you don’t have to own the parts to do this well. It will be interesting to see how this develops, but the key here is to ask if your company is keeping up with this trend toward having these services that help to increase the “stickiness” of your relationship with the end user.If your client is using an ATS, for example, they are more likely to let whatever background checking company or assessment testing company that is part of that suite “automatically” provide that service.

While there were no ATS companies at ASIS because this is really an HR product, we did see companies like Verifications Inc. showing off their new, home built ATS. Looked nice and is a customizable web interface with the end user’s look and feel. Whether they just give this away free to their customers to get the background check business or whether there will be a fee, they can offer the option of using their own ATS or will integrate with whomever.

And, as announced earlier in the year the assessment testing company Hilson Research was acquired by IPAT. IPAT was the only pure assessment company exhibiting.

The following companies specifically stressed their competitive advantage as “strong into technology”: FirstAdvantage, Sterling Testing, Hire Right, VerifiedPerson, and GIS. The integration of Barry Nadell’s InfoLink into Kroll Background America continues and is currently paced by the replacement of software for both companies onto a common platform that will take the best of both companies. Will this sleeping giant awaken?

My philosophy is the leaders of any company exhibiting at the major shows should be there and should spend a few hours in the booth talking and learning about customers, prospects, and their own sales personnel. I was pleased to see the following CEOs present and in the booth: John Long, the International CEO and partner of IntegraScreen, Bill Greenblatt, President and owner of Sterling Testing. Ray Conrad, owner of GIS, Craig Kessler of backgroundchecks.com, Bill Bollinger of NBD, Rich Flaherty, CEO of InfoMart, David Black, Partner in Investigations Canada (my apologies if I missed someone).

Overall, I think most of the exhibitors were pleased with the opportunities at this show. We sure enjoyed seeing everyone and appreciate your sharing.

Bruce and Evan

Remember when you think Mergers and Acquisitions, think Berg Consulting Group.