The Cost of Cancellations for Alarm Dealers

How much do 'satisfied' customers cost your company?


Moves are my favorite challenge. To me, a move meant a terrific opportunity to get two accounts where I only had one. If my moving customer was delighted with the relationship and the service he received from my company, why on earth wouldn't he take me at his new location?

If he has never needed any service from me, and he has never heard from anyone in my company, then why wouldn't he simply go with whoever was already at his new location, or simply open the Yellow Pages and find a new company to install and monitor his new place? I guess he was merely satisfied!

How hard do you try to get the new owner moving into the old location? Do you send a card and wait for them to call you? Maybe you leave a sticker in the hopes that they will get in touch? Some people have taken this issue so seriously, they actually program the alarm control to report daily test signals once they find out a subscriber is moving. This way when the new owner moves in and turns on his phone lines, the central gets a test and know the new people are in. A salesman can stop by to introduce himself and ask if he can teach them about the alarm. If the alarm is programmed to report in on an 800 line, you will actually have the new phone number and can call the new owner to say hello and offer to meet and show him the features of his alarm.

These are not off-the-wall, untested ideas. Those who have actually tried this "move retention" technique (along with a host of other creative techniques) say that it has helped them significantly. Ok, so of the 11 that have moved, we sign 5 old customers at their new location, and 4 new subscribers at the old location for a total of 9. Are these numbers completely unrealistic? Do you think so? Between non-payment and moves we're now up to 11 recoveries. This is already over half of our cancellations for this month.

What about our unhappy customer? Why is he unhappy? Is he simply unreasonable or did we do something to make him unhappy? Could we have offered this customer options and alternatives, or some degree of empathy when he complained to prevent this? Perhaps he was merely satisfied and any little thing set him off. Maybe we refused to waive a late fee? Maybe someone offered him a cheaper price? If our company or any single person in our organization nurtured any kind of relationship with him could we have more success at avoiding this cancellation? Well, no one did, and He's gone! No save here.

Perhaps the same is true with the one cancelled account that no longer needs or uses his alarm. Is that one also "unavoidable"? How do you train and mentor your team to save this account? I would love to hear what you might have tried. Again, no save here. No one knew what to do or really tried very hard at all; $1500 down the drain.

Then we come to those lost to our competitors. Ouch! It happens to the best of us. In 1996 Frederick Reichheld, president of Bain and Company in Boston, said, "The customers you lose hold the information you need to succeed." Do you still think customer satisfaction is good enough? Did you know that the majority of customers who are less than delighted will never say a word unless they are specifically asked? What are you doing to manifest the perception of added value in doing business with your company? When you lose a customer to a competitor, do you actively try to learn why he really switched? What do you do with that information once you have it? What can we do to get a phone call from a customer contemplating switching as opposed to receiving a fax telling us they have already cancelled?

How crucial to the lifeblood of your company is your willingness to maintain a relationship in some meaningful way with every single customer? Some say it costs too much. Others tell me it's impossible.

I'm sorry to disagree. I don't care how large or small your company is, it's anything but impossible, and it costs little if anything to do. We found ways to do it very well, and so have many others (and maybe your biggest competitor is able to nurture this relationship). There are many creative ways to establish and nurture a relationship with your customers that bond them emotionally to your company.