At the 2010 ISC West tradeshow, the Electronic Security Association held a public signing of its code of ethics, a move that came in response to claims of questionable door-to-door efforts in the industry.
Photo credit: Photo by G. Kohl/SecurityInfoWatch.com
ADT's Director of Sales Training John Strade at work training new sales people at the company's facility in Aurora, Colo. Strade shares sales training tips for SIW readers in this article.
Photo credit: Image courtesy ADT
Door-to-door sales generally do not receive high marks from homeowners, and it does not seem to matter whether the salesperson is selling frozen meats, magazines, vacuum cleaners, vinyl siding or even burglar alarm systems.
The business model of door-to-door sales has drawn in unscrupulous sales people and been the target of negative media reports so often that even organizations like the Electronic Security Association have had to write up a code of ethics [download a pdf of ESA Code of Ethics]. Missouri's Attorney General publishes a website which advises consumers on how to respond to unscrupulous door-to-door salespersons and advises consumers of their rights. The website warns, "unscrupulous sellers try to victimize consumers in their own homes."
Google "door to door sales" and you'll find a plethora of forums, articles and videos where consumers rant about this practice. All too often, the subject of the rants is the alarm industry. But even with the slighted image created by bad salespeople, the practice of door-to-door sales will not be going away. It is legal in most jurisdictions, and in the alarm industry, it can be an effective way of marketing security monitoring services.
Two types of door-to-door alarm sales
First, let's explain that there are two different models to door-to-door sales.
The minimalist method is often referred to as a clover leaf approach, according to ADT's director of sales training John Strade. This model assumes that you have an appointment or an installation set up at a home in a neighborhood. The clover-leaf approach works in a way that the sales person would then go to reasonably adjacent or proximate homes and use a sales approach something like this: "We have installed a security system for the Smiths on Woodlawn Street, and since you are one of their neighbors, I wanted to make you aware that we are providing security monitoring services here and that we're offering a special in this neighborhood..."
The maximalist approach is full neighborhood canvassing. Typically this has been conducted in the security alarm industry by hiring temporary workers often for the summer and dispersing them strategically in neighborhoods. Their days are spent walking from the car or van drop-off point down the neighborhood streets and knocking on doors.
The direct, in-person marketing has proven very successful for a number of companies that have figured out a workable model. APX Alarm out of Utah is one company in the industry that has created a successful business from summer door-to-door sales programs. The company typically hires summer workers, often from colleges, puts them through a concerted training system and ensures that necessary licenses are obtained. The approach has made APX the 6th largest alarm and monitoring firm, and along the way the company was able to acquire its own central station, explained Shawn Brenchley, the firm's executive vice president of sales. It's been able to bring installation, sales, monitoring and even client billing in-house. It's a testament to what a company can build with door-to-door sales -- if they are well managed.
And that brings us to the main point of this article, which is to introduce some of the best practices of door-to-door alarm sales. We all know that homeowners typically have initial suspicions about door-to-door sales persons, and the door-to-door alarm business has taken such a prominent beating in the media that your sales people will often face an uphill battle. The goal is that if we, as an industry, adopt best practices, door-to-door alarm sales can be seen as a respectable method of attracting new business.
Door-to-Door Best Practices
Take ownership of the entire process. That means that you closely control not only the sales process, and the sales training, but also the monitoring, the installation, the billing and the customer service. You may not be able to bring all of those processes in-house like some firms do, but that doesn't mean you don't have to take ownership. It was a BP contractor working on the gulf oil rig, but that didn't stop it from being BP's problem when the Deep Water Horizon rig sank and polluted the Gulf of Mexico.
Measure integrity. Believing that integrity is effected top-down, APX surveys individuals who work for and with managers, including sales representatives, technicians, and workers from the corporate office. They even interview individual customers. "If the snake is going to be good, we have to make sure the head of the snake is who we want," explained APX's Brenchley.
Recognize the three objections that will block your sales. Per Brenchley, the three objections are as follows: I don't want it; I can't afford it; or I don't need it.
Provide customers the ability to finance the program. Especially today, customers are not willing to lay out a lot of upfront money for their security alarm system.
Encourage objections. Brenchley said that people who don't provide objections to the security system are often the same ones who cancel they system. "They often haven't thought it out," he says.
Perform a NEADS analysis when dealing with potential customers who are working with a competitive monitoring firm. NEADS equals Now, Enjoy, Alter, Decision, Solution. Now: Ask them what they have now. Enjoy: Ask them what they enjoy. Alter: Find out what they want to alter. Decision: Identify who can make the decision. Solution: Present the solution.
Explain everything in writing. Nothing makes a potential door-to-door customer more comfortable than having everything in writing. This means contracts, marketing materials, and anything else you think you might need.
Pre-survey your customers. This is important for selling to existing users of security systems. "We ask them point-blank if they have an existing alarm system," said Brenchley. "Make sure they are aware of cancellation policies [for the existing system] and that those [fees, cancellation processes] are up to them."
Set conditions for customers. Brenchley says that APX uses the following conditions: 1. If they are renter, APX moves on to another potential customers. 2. If they are in the initial term with another security provider, they move on. Only if they are outside the initial contract (i.e., in a renewal situation), do they continue to approach that customer. Other companies simply will not touch customers who are in any sort of contract (initial or renewed), and they will only pursue those existing customers who are already on a month-to-month program.
Adopt the ESA Code of Ethics. Both ADT and APX have publicly signed the code of ethics, and Strade says that the company requires their dealers to sign it. All of their sales representatives have to sign it as well. "We don't have a lot of tolerance for dealers that violate it," he explains. The code of ethics was also signed publicly at ISC West 2010 by Protection One, Pinnacle Security, Broadview Security (now part of ADT), Monitronics, Moon Security Services and Smoky Mountain Systems as a show of support for the code of ethics. For full info on the ESA code of ethics, go here.
Know when to walk away. Willie Nelson was right if you take Strade's advice. He explains: "Walking away is a fine line. You want to be persuasively persistent. It is a judgment call to know when 'no' is the last 'no.'"
Respond quickly to customer reports that a salesperson came on too strong. The first step might be through the sales person's immediate sales manager, but Strade says ADT will even move major personnel issues all the way up to executive leadership if the situation warrants it.
Recognize that your direct sales people are going to be easier to manage than your dealer channel (if you use a dealer channel). Just for the fact that their paychecks come directly from you, you'll find it easier to manage and implement changes with your direct sales team. The level of separation between your company and your dealers' sales people often means that most of the problems will crop up in that dealer model – if those problems are going to crop up at all.
Identify your sales people. Uniforms aren't always practical, but at the very least, sales people need business cards. If you can, implement a company-issued photo ID badge. Some states and local ordinances require photo ID (a requirement that has appeared only in recent years, for the most part).
Don't let your sales people act suspicious. "We're from the alarm company." "My business cards aren't ready yet." "I just started and don't have cards." "Just call this number if you aren't sure." If you hear your sales people using any of these lines, you can be assured that the message that they're giving customers is "Run, don't walk, away from this unethical sales person."
Adopt vehicle signage and uniforms if possible. It's not always possible, but if you can, then by all means encourage and implement this. Whether it's painting the logo prominently on the company van, or having sales reps wear a golf shirt with your company's logo, you're providing comfort to the potential customer.
Perform background checks. Strade said ADT checks its in-house employees, but also extends background checks to the owner of the dealer firm and to any key persons in that organization. The dealer then agrees to take responsibility for conducting necessary background checks of their local employees.
Provide a 3-day rider for the customer's decision. This might even be required in some areas, but it's a good practices in all areas. This allows the customer to back out of the agreement. It's a great option so your customers won't think they were pressured into a sale. As a bonus, said Brenchley, "If a customer [with a new alarm system] can feel it, touch it, see it, use it, then they get engaged."
Focus your people on principles, not just money. Brenchley says that while most outside sales people focus on money, as a company owner or manager, you need to focus them on principles first. Are they improving the safety of their customers or are they just there to make a buck?
Ensure licensing. Big companies like ADT and APX have compliance programs to ensure that all sales and installation staff members are licensed. One thing APX does is that they have their sales IT system set up that the sales person can't check the credit of a potential customer unless he is actually licensed. The company had to invest heavily in IT systems and infrastructure to make it work, but the model worked well for a high-volume firm like APX.
Identify your bad apples. Utah-based Pinnacle Security faced criticism and lawsuits over door-to-door sales practices until it was able to catch up to its explosive growth with good personnel policies. Good alarm companies need to track who is generating the complaint reports and get them out of the organization. "With the growth that we experienced, there were cases where we had sales representatives that would do or say things that were not in accordance with this code of conduct," said Pinnacle's COO Steve Hafen. At ADT, said Strade, "if you step over the line, we start discipline."
Develop a compliance department. As Pinnacle responded to early problems, its spent a million dollars on systems and on a new compliance department that is taxed with following up on violations or complains of code violations. Hafen said that investigations have to be thorough and the company has to be ready to create consequences. "Those actions include everything from written warnings, to fines and terminations depending upon the extent of the infraction."
Create a customer quality assurance program. Pinnacle's model is simple; two phone calls are made to customers. One is made before the system is installed and the second is after the installation. The calls ensures that the customer understands the terms of the agreement and it gives the customer a chance to provide feedback on the sales representative and installer.
Formalize everything with standard operating procedures. SOPs create the baseline of service, explained ADT's Strade. They're useful for when enforcing consequences for the bad apples, but they are also set your minimum expectations and any standards that are part of your outside sales business.
Train, train, train, and then train some more. At ADT, Pinnacle and APX, everyone we spoke with said that sales people have to go through an extensive training process before they can hit the ground running. ADT runs a monthly sales training class for all the dealers (it's one of Strade's primary job duties), but other firms might find it necessary for individual managers to train their team members. As a business operator, you need to determine where the balance between centralized, standardized training and distributed training by local managers will sit, but either way, training has to be the first priority.
Don't always do door-to-door. But wait, isn't this article about door-to-door best practices? It is, but according to APX's Brenchley, the number one thing an effective door-to-door sales person can do is to get referrals, so they move from the door-to-door canvassing approach to a direct-introduction approach – and if you're company is adopting best practices, you're more likely to get those referrals from highly satisfied customers.
[SIW Assistant Editor Joel Griffin contributed to this article.]