October 14, 2010
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Question:
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Ken,
As always, great job with your email news letter!
We purchased service tickets from you in 2007(?) and still use them. We try to have a new customer sign a service contract, but, many times it is a one shot service call. We have a spot on the top of the form for the person we are dealing with sign before we start, mainly to acknowledge our rate and two hour minimum. At the bottom, above the signature spot for the service tech and customer are large bold wording that the terms and conditions are on the reverse side. While we would prefer to have the customer become a subscriber and sign a contract, many time we are called because a fire alarm is not working and it is an emergency situation. The customer many times looks at the fact they have had the alarm for many years and never needed service before, it is now repaired, why sign a contract? We explain the contract includes periodic testing as required by NFPA and NYCFD, but that is not always a concern of theirs.
Your comments and advise will be appreciated!
Questions:
1. Have the terms and conditions on your service slips changed to a point that we need to update them since 2007?
2. We include the terms and conditions (back page of service slip) on the back of our inspection forms. We have a service contract with several buildings, and perform monthly or quarterly inspections, and include the service order terms and conditions on the back of the report. We realize the inspection and per call service contract terms and conditions are the main terms and conditions, but, felt that this may re-emphise or back those up. If a sub-said they didn't realize (which I don't believe is a defense) what was on the back of the contract, then also signed repeatedly on the inspection forms acknowledging the terms and conditions, could this help limit liability?
3. Will you be giving the "how to complete contracts" seminar again? Maybe a quick one on one with you or someone from your office to review a few that we have completed recently?
Thank you,
Jeff S
Acme Fire Alarm Co Inc
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Answer:
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Keep in mind that the most important provisions of the Service Contract are the protective provisions, particularly those that "contract away liability for your own negligence". The Standard Service Contract has the option for "per call" relationship, so it can be signed as a Service Slip only once, and then you can service the account knowing that your relationship with the subscriber is governed by the Service Contract.
The Service Slip has not changed in years. No upgrade necessary. The Service Slip is not on the order form for the standard contracts, but you can call our contract administrator, Eileen at ext 312 for the Service Slip form.
Printing on the back side of contracts is always an issue; make sure you have clear reference to those terms on the front of the contract and make sure the provisions on the back of the contract are legible.
With fire alarm, service and inspection go hand in hand, but they are not the same. The Fire All in One is really a premium contract and should be used by anyone doing commercial fire alarm work.
I am going to schedule seminars in my office soon on how to use the contracts. I've been busy with traveling speaking engagements and a little lazy. Sorry.
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More comments re Free Alarm Systems
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To Chris,
If you are lucky enough to get a hold of one of the "Free Alarm System" contracts by ADT and others, you will see they are not selling the customer the equipment. They lease it to the customer. Very sneaky, they say "we will install" instead of "you can buy". The customer pays $99.00 to cover the labor but owns nothing. Once I discovered this, I started offering the same thing but I'm up front with the customer about it.
When I quote a system I give two options. One you can buy the equipment and pay a low monthly monitoring fee (High up front, low monthly) or two you can lease the system (low up front higher monthly) Included in the lease option is system maintenance. Because I own the equipment there is not cost for system repairs under normal use except batteries. Cost of the lease is based upon the amount of equipment installed. I divide the cost of the equipment by 36 and add the monthly cost of the monitoring. This is the cost per month for a three year lease.
I think you will be amazed how many people opt for the lease. People don't like to pay a lot of money up front but don't have a problem paying high monthly TV, Phone, Car, House, and monitoring fees. It takes three years to get the cost of the equipment back but after that its all gravy and you continue to own the equipment.
Be sure to use Ken's lease contract. It covers system removal upon termination.
Tony
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Hey Chris,
What a typical old school response to a brilliantly successful creative alarm marketing model in the low cost or "free" system strategy which has broken open the availability of security to millions of people previously priced out of the market because you and your reps needed $1000 commissions and $1000 profits on each install, in addition to the lucrative MRR with 500% profit margins.
Also, 89% of break-ins occur at an entry door (covered in a "basic" system) and one properly placed motion will trigger the alarm upon entry by other methods. There is no evidence that more expensive systems prevent more break-ins or result in more apprehensions by police. In fact when an Insurance Company wants to verify alarm installation so as to discount insurance premiums, they don't ask how much was spent on the system or how many doors or motions were installed, they want to verify that it is monitored by a U.L Central station with U.L. equipment.
It would be in your best interest to have some evidence to support your scare tactics used to convince potential customers that spending thousands on additional equipment will bring them additional benefits. If you want to do a total cost comparison here is what it looks like, apples to apples. You charge $1400 for a hardwired system, then your technician runs wires under the carpet, or gets to the house and can't get a wire to the desired window and then the up-charge to add a wireless receiver and wireless contact is an additional $450 to the customer. Then, even at a below market rate of $25 per month, your customer will pay $900 in monthly monitoring over the next 36 months for a grand total of $2300 (assuming you didn't have to have any wireless AND you didn't charge over $25 a month AND you provided a maintenance agreement in the $25 a month) and the customer would need to come up with a whopping $1400 up front. Please explain again how your $2300 package with $1400 up front, with no maintenance agreement and bulges under the carpet after a few months is so superior to the $1358.64 package that we do (oh, by the way, at a rate of nearly 28 to 1).
It's time to put this to rest, quit the personal attacks on the reps, installers, and equipment. Most of the time the installers that install our systems are the same ones that worked for you at one time or another and vice versa. Your Reps don't don't have a higher level of intelligence or integrity than ours. And 9 times out of 10 the equipment comes from one of the big 3-4 manufacturers that most of us use including yourself.
The bottom line - be the best at the model you choose to use and you will be successful and profitable.
Norm - Alarm veteran with over 15,000 happy low-cost system customers.