Not to question your business plan, but that is when the alarm company, that has the "free" marketing approach, finally starts to make some profit. The rate doesn't drop because, instead of paying off upfront costs which they are doing during the first term, they are making up the profit that was not there during the first term.
There is NOTHING of value or benefit to doing so
Sure there is. A client that signed on with me in 1999 is paying far less than the customer that signs up today. If a client did not agree to have the auto renewal, which I have some, and wants to continue using us as their security provider after their agreement expires, then I go out and sign them to a new agreement at today's rate, so now they are paying more than if they had simply let it renew at the old rate.
Most customer hardly
No, they believe what they have assumed, thought, someone else told them, wished to be true, and any other reason they can come up with, anything except for BEING RESPONSIBLE FOR THEIR OWN AFFAIRS. The auto renewal clause was in the agreement from day one. If they don't read anything else in an agreement, they read the terms, where the clause is located, and they have three business days to question, negotiate or strike the clause. To say they don't remember is BS. I'll bet everyone of them can tell you the day their last car payment is due right off the top of their head. It is called responsiblity and in reality the only time it becomes a problem is when they want out. All of sudden they come down with Alzheimer's.
Yet if they don't, they're committed. It's
We are not in the cell phone business.
No, it is worse, right down to grand theft auto and full cost of the value of the vehicle.
If you sign a long term natural gas contract, BOTH
Bob, Bob, of course they do unless the provisions, ie cost of living, for increases are clearly stated in the agreement, they orignally signed, and there are usually caps on those. Do you think the cost of doing business is the same in year one as it is in year three? Companies can't just throw out increases at will because a customer will always have the opportunity to either except or decline.
So you are saying that a 130 year old, multi Billion dollar industry, involving all aspects of our life, has been built on unethical business practices? The one constant that I can see in the business world is that all business owners are free to choose their own business plan. Some choose to be pioneers but the mass majority follow what has been the norm. With that being said, the norm on the customers side is that they just claim to being abused when they want out. I have never seen one of my customers, that are paying 1995 monitoring rates because of auto renewal, come running to me and say "Boy, you've been monitoring me for 10 years, you need to raise my rate." They are as happy as clams just were they are at. They are reminded of that everytime they see a Brinks or ADT advertisement showing that $30 plus monitoring fee.