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Life expectation for residential and commercial subscribers
May 10, 2019
Life expectation for residential and commercial subscribers
            First let me say that I'm an avid reader of your emails and find your insight and guidance invaluable, that's why I signed up for your Legal Concierge program and I hope all the real alarm companies do. 
            I have been in the alarm business for many years and I keep getting asked the same question by lenders, banks, other alarm companies and individuals writing articles, so I'm going to ask you the same question.
             "What is the expected or average life of a Commercial subscriber and a Residential subscriber".
            I know we all sign contracts with subscribers with terms ranging from 3 to 10 years, but that the contract term.  What I'm looking to find out from you or any of your readers is the real life exception of a Commercial and Residential customer.
            Do you know if the industry or one of the magazines has ever run a study, 
I would love to know.
Yours truly. 

            Great question.  There may be a study but I don’t know about it.  Anybody have opinion on this?
            There are a number of indicators.  The Standard Form Agreements have a term for residential of 5 years; 10 years for commercial.  Of course you can change the term and clients often do make that change.
            Buyers of alarm accounts will pay between 35 and 40 times.  That means they anticipate having the account for at least 50 months just to break even on the acquisition.  
            Statistics show that residential home owners move after around 7 years.  Obviously some stay much longer.  Tenants may have a lease for 5 years or less.  Commercial subscribers can be all over the place.  Plenty of businesses go out of business within the first year; a lot more within 3 years.  Some end up staying in business a long time at the same place.  Probably none are still using dialers and foil, but who knows.
            Fire alarms have better staying power because the building itself isn’t going anywhere and the fire alarm is required.  Hanging on to that account is even more assured if you lease the fire alarm rather than sell it.
            So here goes with my gut:  5 to 7 years for residential and 7 to 12 years for commercial.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301