KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** Corrections on attrition considerations / value of alarm services August 2, 2022 **************************** Corrections on attrition considerations and value of alarm services from article on July 16, 2022 **************************** In my response on July 16, 2022 I suggested an example of alarm account attrition of 10% a year, concluding, erroneous, that such attrition would deplete the accounts in 10 years. I wrote: " I am not aware of any statistical study that suggests that alarm customers have a life span of 12 years, 144 months. Certainly that’s not to suggest that some alarm customers remain customers for many years beyond that. Theoretically a 10% attrition rate means you turn over 100% of your accounts in 10 years." I stand corrected, thanks to an unnamed alarm expert who prefers to remain anonymous on this one. The first year you do indeed lose 10% of what was purchased. But each year thereafter you will lose, theoretically, only 10% of what you started with that year [again assumes we are not dealing with new accounts, only the purchased accounts]. If you do the math you end up with around one-third of the original accounts after 10 years. Not a problem if you use the commercial Standard Form Agreements; they are 10 year term. ***************************** What's value of alarm services from article on July 16, 2022 ******************************** In that same response I also attributed a statement to Lee that was not entirely accurate, a statement with which he doesn't agree. He called my attention to my mistake, and I think it's important to correct the record. Lee wrote: "Current market research suggests much shorter life with much higher attrition for millions of existing “deterrent” type customers, when customers learn of slow or no police response to their alarm site. Big risk for investors." I misinterpreted Lee's comment and stated: "Lee’s continuing message is that be wary of alarm customer accounts because sooner or later they are going to figure out that police response is so slow or non-existent, the alarm is useless." Lee doesn't believe alarms are useless; neither do I. So now we got that straight. ***************************** Ken RE your Newsletter of July 16. Your reply to my comment. Again excuse my layman language. I have never said, nor implied,”… police response is so slow or non-existent, the alarm is useless.”. All alarm systems, including signs & decals, serve notification and deterrent value. My observations and messages are intended to alert friends and colleagues, NOT the end user customer. At what point does it become deceptive business practice, at the expense of the dealer/investor? We believe, some Alarm Associations and their “model ordinances” are too self-serving, putting their membership and other stakeholders, including investors, at risk of deceptive business practices. For example, we forget that most alarm contracts (RMR) are created via individual sales persons and their marketing support. Unfortunately, sales training and sales support materials, still include the Public/Private/ Partnership, providing the alarm industry special credibility with local police; suggesting on-demand police response to the alarm site, as incentive/ motivator for signing the RMR contract. And the sales transaction does not mention that most monitoring sources, not the customer, are considered to be the perpetrator of UPR/ Unnecessary Police Response, aka false alarms… exempt from fines and fees generated by their own interpretation/ errors /omissions. The customer is erroneously levied fines/fees by the muni for false alarms. We forget that the ordinance says the muni has full immunity if NOT respond to alarms, but is silent about loss of immunity if/when public resources are used for private purposes, like private deterrent alarm-site response. WE forget most police departments have rejected the Model Ordinance, but endorsed its use due to pressure by the City Council for revenue purposes. (police departments report to the council, but have lots of escape clauses). Lots more detail upon request that suggests deceptive Lee Jones *************************** To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
