Just got a letter that Monitronics will no longer monitor my Apex installed security system, it's now assigned to Apex:
"Effective July 23, 2005, Monitronics International, Inc. has assigned your Alarm Monitoring Agreement to the Apex Alarm, LLC. Apex Alarm, LLC is now responsible for providing you with alarm system monitoring and any other services under the Agreement. Monitronics is no longer party to your Alarm Monitoring Agreement. Apex Alarm, LLC, will now be responsible for your monitoring services, and future payments should be made to them."
Is this good or bad in your opinion? If bad, any way to break my contract? Nothing in the letter what to do if I disagree with this change. Thanks in advance.
Sir, this may or may not be good for you; I honestly don't know. Others more familiar with these particular companies can comment. However, this is one more illustration of the reason why a consumer should never agree to sign a long term contract (provided he's paid a full and fair market price for his system, which many don't), ans especially so when he owns the system outright and is changing suppliers. Under the terms of every long term contract, the consumer is no longer in control of his own destiny. Your system is simply another piece of company "equity" that is bartered and sold at the whim of the company that "owns" your contract.
Once you sign a contract of this nature, they don't care whether you disagree with what they do or not - nor do they have to frankly. As far as breaking the contract, you could check the fine print to see what it says, but I wouldn't hold my breath.....
You might want to remember this experience the next time someone knocks on your door offering you a "free system". Unfortunately, even if you do pay full price, most companies will try to lock you in as well.
Ask any company at your door one question..."Why should I sign a long term contract..what's in it for me". The only truthful answer is "absolutely nothing".
So why agree to it ??
R.H.Campbell Home Security Metal Products Ottawa, Ontario, Canada
Somebody please repost this, just in case ...........
You're such an idiot Campbell.
You don't have a freaking clue how to run a business, and on top of that you proudly go about, proving it.
YOU have a hard time trying to deal with RFI Paul for spouting off about his nosensical gibberish, yet you are blind to the fact that you tread water in exactly the same gene pool as he swims.
You don't seem to be able to see that there are numerous things that companies or their owners do to survive and to assure that they will be around or have some equity in their business for retirement. Just because you don't have the intelligence, need, will or insight, to see any future for you in this industry, there are thousands of people who do see them selves and their lifes long work continuing. Hey you dumb shit, why do companies get liability insurance? Why do companies make investments? Why do companies upgrade equipment, have pension funds, health plans? 401k's? Roths? None of these things enhance the service that the end user gets, but the end user is damn well paying for it. You sound so damn stupid in the face of every authority in the alarm industry, who says that it's down right stupid for any company to NOT have contracts and the longer the better. You've just got this ADT bug up your ass, so Goddamned far that it's reached,what used to substitute for your brain. You're a fart in a wind storm and you damn well know it. Yet, you've just GOT to pontificate your stupid and asinine nonsense and expect, just as RFI Paul does, that if you say it often and long enough, that someone may believe you. If you're such an authority on running a business, why don't you explain the logic to the people, that you explain in as great a detail as your "no contracts" gobbledygook,that you also don't see the logic to charging for service calls ..... ever. Now ..... for them, they're all happy as can be, and it never sinks in that ........ eventually it's going to eat your company right up and likely right out of business. Why don't you tell them that you really don't care if your business survives or not. Why don't you tell them that YOU've already got an income for retirement and that this is just sort of a hobby for you. I'm sure then they'd REALLY understand why you don't have any common sense or concern about keeping your company viable with equity value or making enough profit to make it grow as well as it could or keeping it around for years to come. You're just going to hand it off to your son, who's Ahem!...in training now ........ But hey, what the hell, both he and the company will sink or swiw ...... Right? Then they just might understand also, how you're not building any value for who ever takes the business over in the future ..... someone who just doesn't happen to have a retirement income as you do. Sure, you're customers are as happy as can be to help you eat up your profits and keep your business in stasis ..... so that they can save a few bucks now. And I'm sure that they all pat you on the back and give you all the "attaboys" for not doing what all your smarter competitors do. I'm sure they'll be happy when the company can't make it anymore and they've got to jump ship and find someone who knows how to keep a company in business.
Oh, yeah. By the way .......You can chalk this response off and compare it to the same thing that YOU occasionally do to RFI Paul, after you heard his stupid imbecilic inanities, one to many times.
Have you ever had an attorney who wasn't familiar with the alarm industry read a typical alarm monitoring contract? In my experience, most don't have a clue and strike out most of the clauses that protect an alarm company from being responsible for a loss or from being used as an insurer.
Is that to say that you don't ask your clients to sign a sales agreement, pay a fee .... then sign a monitoring agreement and then pay a monthly fee for monitoring?
Perhaps he would like to have an alarm system and cannot afford it.
In America the only thing that matters is 'how much down' and 'how much per month.'
A complete home alarm system will run around $3500. in most cases and many folks can't afford that but still want an alarm system. Instead of shopping around or asking their friends they fall for one of those bs commercials on tv or some high-pressure salesman for one of the three national firms that specialize in junk systems and junk paper. After the fact they discover they didn't get the $3500. system they saw at a friend's house or were promised but instead they got some $99. box o'crap and its just pay pay pay and pay some more forever. Two doors and one motion is what they got plus an estimate to upgrade to a complete system for $70. per drop which works out to around $3100. in most cases. It's $90. to hook up the telephone line. It's another $595. for the cellular backup system. There's a trip charge to come out plus all these other charges and the $27.95 per month they quoted turns out to be $34.95 per month from the start. Of course, senior citizens get a $2. per month discount. And, you never own anything except the paper you signed and four times a year they stick an additional $7. on the bill to cover the property taxes. And, you pay to fix it whenever it needs fixing. And for 36 months you are stuck.
All they had to do was read the contract but people don't read it. A good practice is to NEVER sign anything and say you'll have to have your lawyer look it over first. This will quickly rid your home of these scammers.
Why do people keep signing? The only thing that matters is 'how much down' and 'how much per month'.
I'm not sure to whom I am speaking, but I will assume it is Jim (Alarminex) from New York.
I don't ever take anything on a virtual newsgroup in a personal manner. No one really knows me, or who I am in any way, so no one can really make any comments that truly reflect on me in a negative way. Negative comments only reflect on the sender. I give what I can to the newsgroup, and take what I can, and totally disregard the vile nonsense, the hateful posts that try to denigrate other posters, and the posts that have little or no redeeming value. You and I have disagreed in the past over many things, and that is how life is; wouldn't it be boring if we all did business and conducted life in an identical manner. You have been in business far more years than I have, and by all accounts, in a competitive environment the likes of which I am not likely to ever see. However, when your posts fit the description above, I simply lost interest in reading them, and filtered you out.
Hopefully, things are back on track, and I will go into Outlook Express and try and figure out how to "unfilter" your posts
R.H.Campbell Home Security Metal Products Ottawa, Ontario, Canada
sales and leases are two different animals. The original poster probably didn't realize that when he signed the agreement, it most likely contained an assignment clause. Most agreements do, giving the company the right to assign the agreement without notice. It is pretty common language in these agreements. Could you imagine going out and getting permission from all of your clients inorder for you to sell your company? Selling paper is nothing new. Mortgage companies do it, insurance companies do it, all types of service companies do it, the old community satelite cable companies did it, again, it nothing new.
You don't have an answer it is the real reason .......
But anyway .... I see that in your way of thinking, I'm ignorant and rich and you're just ignorant.
That works for me.
Nah. Markie just tried to be a smart ass and it almost backfired on him.
Well the soulution is for you to stop pontificating at every opportunity you get and mouthing off at end users, who come to this Newsgroup, about your stupid and erroneous policy regarding contracts.
Again you twist the truth. It is simply YOU who gives away the equity of your company in trade for a simple alarm sale. YOU are the one who offers the no contract sale. There is not an end user in the world who would go out looking for an alarm system with the highest priority being ..... no term contract. YOU make it an issue and of COURSE the client is going to take something for nothing. You don't give away "free" alarm systems. NAHHHH! what a misleading fraud to perpetrate upon the public. Instead, YOU give away a piece of your company, with every sale you make.
What an idiot you are. Nobody is losing customers because of cable, DSL or any thing like you're predicting. If people have a good alarm company and they have an opportunity to get monitoring at a lower price, do you think that they will all, en masse jump for the lower price? Some will, but it will be all those that don't have a brain in their head to begin with, (who's going to service their systems) or those that don't pay well and are looking for something for nothing, just like those that buy the "FREE" alarm systems.
You haven't been in business long enough to know. And as long as you give away service for nothing why should they change to someone who will charge them? Why should they care if you are willing to give them something for nothing ..... and again, little by little, giving away pieces of your company .... bit by bit. So lets see. I've got much more then twice the accounts that you do. I DON'T give service away for nothing. I DO have five year contracts. My attrition rate is somewhere around .02/.03 percent and in addition, I've got more dollars in equity built into my company than you'll likely make for the rest of your life. Yep, I guess you must be doing something ........ wrong. But .......... Just call me ingnorant.
Yeah, sure, every one that you talk to BEFORE you sell your company will tell you that they'd buy your accounts just as is. That is, until the buyer of your company gets his attorney and bank into the act. Wake up Campbell, you don't know what the hell you're talking about. Yet you insist on misleading the people who come here, the same way that you mislead your customers.
Yeah, he'll be able to take it anywhere ...... but to the bank.
Yeah, they "flock" you alright. Because YOU give them everything they never wanted nor would expect. But you just keep right on givin it away, anyway.
I'd venture to say that you've never given one of them the opportunity to sign a term contract ......... so how would you know?
Wow, that's really different. Why haven't all the other alarm companies ever thought of that?
So ... giving away a piece of your company with every sale is not the same thing as giving away a Free alarm system .........?
Even if they didn't know it was a mistake until you told them it was .....
Can we presume your "past businesses" were successful?
Interesting ! I see Jim (Alarminex) is as ignorant as ever, so I'm not even going to answer his usual invective. Clearly Mark was baiting him with that last conciliatory post.....good one !.....saves me having to figure out how to "unblock" someone in Outlook Express...
But you sir, do make some good points. No offense meant, but I've been down this road so many times, frankly, I'm getting a little bored with having to respond to the same old industry self serving practices. I fully intend to run my business to my customers advantage regardless of what the accepted industry practices are. This may have been an acceptable way to operate years ago, but informed consumers expect more today and that is what I will give them. With the advent of the "direct to consumer $10 monitoring" (which is excellent btw - I know and deal with two of these companies myself), and the coming amalgamation of less expensive monitoring services on cable and satellite services, the companies that will suffer the most will be those with overpriced, long term contracts. Just like ADT, they'll keep their customers until the end of the contract and then lose a good many of them.These changes in the industry are coming more quickly than not !! (which is why it is important that security companies diversify into other related fields rather than depend upon RMR for their revenue flow). If lack of a long term contract is so bad, then my attrition rate should follow, yet it is one of the lowest rates on our station with over 300 dealers. In a few short years, my company has risen to become the 10th largest company here in town. I can sell my accounts for excellent value at the snap of a finger, because they are all well installed and most have been with me for many years. And our reputation in this business is sound !! Due diligence is MUCH more than the presence of a long term contract. But my son is now pretty much running things totally and the business will give him a future he can take anywhere he wants. If he chooses to operate differently, that will be his decision once he owns the business.
Different is not wrong just because it goes against the commonly accepted grain. I don't have to duke it out with any other company in town; clients flock to me because of it. It's safe to say I wouldn't have 60% of the clients I do have if I forced them to sign contracts with unnecessary long term restrictions. And my clients are every bit as loyal as anyone elses believe me !! Referrals account for over half my new customers. My website gives me the other half. New ones coming in know I don't discount my systems artificially, but they also know they get damn good value for the money spent. We "mickey mouse" nothing !! They get the best panels, upgraded motions, largest batteries,and ONLY the high end LCD keypads. They also know I must give them exemplary service or face losing them.That's the way it should be in business. And that's also why I get so many takeovers from ADT (who I don't hate by the way...). My client base is no different than anyone elses except they know they are not locked in past a month. That in itself is a great sales attraction when it is put up against other quotes they may have been given. It's a "no risk" situation, especially if they've been bitten before by a not so reputable company. That doesn't make these customers better or worse.....perhaps a little more discerning but nothing else. Monitoring is a service; nothing more, nothing less. If the client needs it, he gets it. If he doesn't need it any more, I'll be damned if I'll take his money for nothing given simply because he was foolish enough to commit himself when he didn't need to. I'll not let my customers make that mistake, I can assure you.
I wish you and your company well. Yours is the traditional approach, and I'm sure it works well for you. I also hope it continues to work well for you given the changes that are coming. But it's not for me or my customers. I've always liked doing things differently (it's also worked that way in my other past businesses....) and I will continue to do so
"Nomen Nescio" wrote in message news: firstname.lastname@example.org...
Jim's absolutely right. I wouldn't have been so blunt, but he's right. It is both foolish and nonproductive to use month-to-month monitoring contracts.
The idea of building equity through the use of contracts is well understood. RHC will pay a heavy price when he tries to sell his accounts, and discovers buyers want some kind of assurance that the subscribers will continue to pay their bills. He will say that he has no intention of selling, but eventually, everyone sells. People get old, they get sick, they need money suddenly for a host of reasons, their children decide they don't like running an alarm company, and so on and on.
Not using contracts is like throwing money away. It's foolish. I'm not urging everyone to use five year monitoring contracts for existing customer-owned systems, but a contract term of one year is entirely reasonable, and prudent.
The question then becomes, what is the advantage to using month-to-month contracts? Obviously, it is only a good idea if the alarm dealer can sell more accounts that way, and only if those additional sales stick around at least as long as accounts sold under contract.
Personally, I have never had anyone argue with me over a one year monitoring contract (and yes, I always tell people orally that the monitoring contract is for one year!). People either sign with me, or they don't, but the length of the contract is never a factor in their decision. If you want to be a really nice guy, you can always choose to let people out of their contract instead of enforcing it religiously. This option lets the dealer maintain the written contract for possible future sale, while letting deserving customers leave without penalty.
So, if RHC believes he is making additional sales by using month-to-month contracts, I believe he's fooling himself. But let's assume he is making those extra sales. What kind of customers is he attracting? People who want the flexibility to throw him out at a moment's notice, for no particular reason. That's hardly a desirable client base. The good customers won't mind signing a one year contract, and the bad customers are probably going to be the collection problems and the ones who will have no loyalty, who will dump him without a second thought.
Good customers won't mind signing a one year contract.
People who do mind, you don't want as customers anyway.
Now if his past businesses were successful then why would they be PAST? If you had the golden goose would you sell it? You're wasting time debating with him, Jim. He's the 10th largest alarm company in his town (which makes one wonder why then is this 'big business' being operated from a residential garage?). We're dumb, he's smart. He has all the answers while we just pretend to know what we are doing. I generally ignore his contract rants now because they border on retarded. See you at ISC.
They are past tense because in one case, I gave it up as too time consuming at that point in time in my life. The other I sold at a handsome profit, and the third and biggest, I was forced out of business by the world's worst gun laws, if you must know.
I don't debate with Jim because he is crude, and his posts are hateful and at times border on demented, like some others in the ng. I just ignore his ignorance ! So far in this thread, you are the only one making judgments about people you've never met. I don't know you or Jim personally, and in his case, I don't ever want to know him. Nor do I think either of you guys are stupid, although in his case, I do wonder how he handles his clients, given his uncivilized attitude on this ng.
What makes you think I run my business from a "residential garage". ? As you likely know if you are thinking in a reasonable fashion, you don't need a huge storefront operation to run a security business. That only needlessly increases your overheads. If you are selling in a mass marketing fashion, you probably need space to house all those short term sales folks. I don't sell those kinds of shitty minimalistic systems !!! Running my business from a home office makes good sense from a tax persective as well, given my current size. The installation side is run from my son's home, and provides him with tax breaks as well. And just as in the case of most independant dealers, the monitoring is done by a professional Central Station also located elsewhere.
Frankly, I don't care if you or he (or anyone for that matter) doesn't care for my so called "rants". I will continue to warn customers who come to this ng against the stupidity of signing long term contracts when it is not necessary. If they want a really inexpensive system at the front end, a long term contract is the way to go. If they pay a fair price for the system up front, a long term contract is useless to them and only serves the dealer's interests.
When all is said and done, the ONLY ones that really count are the customers.
I've told two separate buyers when they approached me that I have no intention of selling, either now or in the near forseeable future. That will be a decision my son and I will make some time in the future. They offered up some quite creative ways to buy the business - I was actually very surprised. It was very much a "win win" situation. As for the rest of your comments, I do see the business logic in what you say and I HAVE seriously considered these points before. I didn't get into this business with my eyes closed ! I made the decisions I have made with full knowledge of this conventional logic when I wrote my business plan initially. But knowing where the accounts will likely end up one day, I am not in the least bit concerned.
BTW, for the record, there were no confidences broken when I learned of the attrition rates I spoke of. Here in town, small dealers go in and out of business like you and I change our underwear. It was during the course of taking over a customer from a 10 account independant dealer that had gone south (literally) for the winter, and who had left his accounts without any service whatsoever, that I learned of this fact. I have been approached by several other small dealers with a view to buying their accounts. But that too doesn't fit within my business plan. Why would I buy accounts from a small dealer who puts in poor quality troublesome installations (these dealers anyway), and who doesn't have the "where with all" to know where he is going in his business from the very beginning. My business partner owns his own company with about 375 monitored accounts, and we have discussed various options such as amalgamation, me buying him out etc, but nothing is firmed up in that regard. His installs are superb, most of which were actually installed by both he and I together when we actually worked for each other in a mutually beneficial way. Whatever we decide to do, it will be mutually beneficial to both of us....
As I slide further away from the actual installation and service end of things, I'm working on a couple of other ideas that are somewhat unique and potentially very profitable with several small high tech development companies. At the moment, I'm not in a position to discuss this in a public forum, but if it pans out, it could change the shape of current monitoring quite drastically (actually, I had to sign non disclosure agreements with both companies). If anything comes to be, a contract will mean very little anymore - mine or yours. If it doesn't...well, I'm no further behind (and a lot of these small high tech companies come and go like alarm dealers...their "death" is in the implementation of an otherwise good idea)
So, to end this thread, if your concern about my business is genuine, I thank you. If it's only to keep the thread going with a view to "winning" your viewpoint, don't waste your time. As I've said many times before, you do it your way, and I'll do it mine. End of story....
PS: You might tell Jim (Alarminex) that Dove soap is great to wash his mouth out with....:))) I'd love to have a civilized conversation with him; we share a lot of common feelings on gun control...
First of all, I am surprised that you have the slightest idea of the attrition rate of the other 300 dealers monitored by your central. I view that as confidential information, and I would be highly upset if my central was blabbing that information to my competitors. Even though my attrition rate is quite low, it's the principle of the thing: confidentiality.
Getting back to your no-contract business model, let's assume for the sake of argument that everything you say is absolutely correct: your customers all love you dearly and would stay with or without a contract, you don't have scumbags who want the freedom to throw you out at a moment's notice, and so on. Even so, I think there are a few points you may not have considered.
I'll assume that your business model works just fine for you now: you're selling jobs, making money, and not losing accounts. But what happens when it comes time to sell (and yes, sooner or later even the largest companies sell out)?
As I recall, you have something over 500 accounts and are growing. The bigger you get, the fewer the number of potential buyers, since fewer and fewer companies will have the cash, or be able to secure the financing, to pay your price. In that respect, you are a victim of your own success. You will probably be limited to companies at least twice your size.
The odds are great that your buyer will not take as good care of your accounts as you do. After all, this is why you are currently taking accounts from them and not the other way around! The buyer does not have any emotional stake in your accounts, since he knows none of them personally. Since your buyer will be a bigger company, it's likely your accounts will be serviced by service techs you've never met, techs who may not be as knowledgeable or dedicated as your own. The buyer may also move all your accounts to his own central station, rather than using yours, especially since a buyer big enough to buy your 1000+ accounts (by that time) may well operate his own central station.
All of this translates into a higher attrition rate after the sale. The buyer expects this, particularly if he's bought accounts before. And it's something he will factor into the price he is willing to pay.
Now, put yourself in the buyer's position, and think of what you're doing by buying RHC Security's accounts. You're buying accounts that can cancel any time, for no reason. You're buying accounts that are paying below-market monitoring rates (correct me if I'm wrong). And, I seem to recall that you offer your accounts free maintenance and repairs with your monitoring. The buyer is taking one hell of a big risk! Specifically, he's betting that he can provide at least the same level of monitoring and maintenance and customer service that your accounts are receiving now, and still make enough money to pay you, cover his costs, and eventually turn a profit. He probably won't dare raise the rates, since he would risk losing accounts in droves.
And let's consider financing. Even large buyers often do not like to use their own cash to buy accounts. They'll use a bank or one of the alarm industry financiers and borrow some money against the accounts they're buying from you. It might not be enough to cover all the cash, but it definitely helps. Only in your case, I doubt a bank or finance company will loan much money against your accounts. It would be like trying to borrow money against a signed contract that reads, "I promise to pay you $10,000 next month, if I feel like it."
If you were a buyer, would you pay the same price for a bunch of "cancel anytime" accounts as you would pay for accounts that are contractually obligated to pay you for the next N years?
Putting yourself in the position of a buyer, how do you protect yourself against this kind of exposure? A lower multiple, a minimal attrition allowance, and a much bigger holdback -- that's what I would do. You won't like the terms, but you can always look for another buyer...except there's that problem of not having very many buyers with enough cash in hand. The buyers have the money, and if you want it, then for the most part, you will be dancing to their tune.
Jim may have his own views on gun control, but I don't remember him ever saying that he used a gun in the same manner as you Mr. Bass, who used a gun to assault another person and will forever be a convicted felon for your actions.