October 13, 2010

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Comment:

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Hey:

    As always, thanks so much for the very informative emails.

    I personally LOVE it when a current or potential customer brings up a company like ADT and their ads.  I have a cut out of one of their ads in my office.  I refer to it when I am asked about their "free" alarm system.  The ad says " FREE HOME SECURITY SYSTEM! at NO COST to you for parts and activation with only a $99 Installation Fee and the purchase of alarm monitoring services."  There's a picture of the equipment included and it looks like a wireless motion, 2 wireless door contacts, a keychain remote and a panel/touchpad.  Down at the bottom it says, "$99.00 Customer Installation Charge.  36-Month Monitoring Agreement required at $35.99 per month ($1,295.64).

    Okay, so basically for almost FOURTEEN HUNDRED DOLLARS all the customer is getting is a wireless system with ONE Motion and 2 door contacts!!!  WOW!!!  what a deal!!!  and guess how much you pay if you cancel before the 3 years is up?  It doesn't say on the ad, but my guess is the customer pays the balance.  I've heard stories about companies and how hard it is to get out of their contracts.

    I don't know about the rest of you out there but for the above mentioned $1,400.00, we can install a fairly large system HARD-WIRED with a panel, 2 touchpads, probably 6 or 7 door contacts and 6 or 7 motions.  I've also seen wireless zones stop working when the battery dies and the customer has no idea.  My guess is companies would charge a service call to replace those batteries too.

    Too many "fly by night" companies out there too.  I'm convinced that's the main reason the laws are getting so strict.  Un-trained technicians putting in crap alarm systems and locking customers into long contracts and making them pay the balance when the customer realizes their alarm system is junk.

Chris

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Response:

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    Well I guess everyone is entitled to an opinion.  But there are a few flaws in the above reasoning.  A basic system is installed.  The $99 doesn't cover the cost of equipment or labor charges.  The monthly charge is for monitoring over a 36 month term, so the $1400 isn't just for the basic installation.

    Lots of alarm companies installing "free" alarms are competent and more often than not the "fly by night" companies actually can't compete with free alarms; it's too costly to front the installations.     

    High competition requires that alarm companies try different marketing stragety.  For some it's free alarms; others tout their specialties and still others rely on their franchise or dealer program trade names.  Whatever works. 

    If you do offer free alarms then the Standard Form Contracts do need some modification.  Call our contract administrator, Eileen at ext 312 for more information.  arm company.