The Cost of Cancellations for Alarm Dealers

How much do 'satisfied' customers cost your company?


"But we're too busy". I hear this all the time. Humor me for a moment with another math exercise. How many people inside your office are too busy to make 5 two-minute phone calls per day? Let's see: 15 minutes per day socializing with co-workers at their desks, 2 minutes at the water cooler for more socializing, another few minutes chatting at the coffee machine, and as much as 20-minutes per day going out for a smoke, and, oh yes let's not forget personal business.

Imagine every single inside employee getting a list of five customers to simply call up and say, "My name is so and so, and I just wanted to introduce myself and let you know how grateful I am for the trust you placed in our company to provide your security. ... Please test your alarm system once a month. ... Do you know how to send us a test?"

This is just a simple example of one tangible way to establish some kind of meaningful contact with a customer who may otherwise never hear from you at all. If you have 10 inside employees all making 5 two-minute calls a day, you would touch 250 customers a week, or 1,000 of them a month.

How clever could you be at getting useful information from them during the course of these calls? Could you add that information into a data base and use it to your advantage? Birthdays, children's names, and anniversaries are all extremely beneficial to the relationship. What you do with that information could make it extremely difficult for any competitor to ever steal one of your customers. It could also benefit sales people and future business. Information obtained could also help you in your marketing efforts when it comes to new services and technology. I can tell you that we did all of this at my company and it paid off big!

Do you still think it costs too much? It cost me almost nothing! How much is it costing you not to try this? I have many clients who will tell you the same thing, or maybe they won't? Creativity and conscientiousness just helped you save one of the two customers who were switching to a competitor. We're now up to 12 out of 20. Not counting all the referrals we received from customers who we have delighted along the way and not merely satisfied.

What about the commercial customers who have closed their doors and gone out of business. This month, we have two of them. After reading this article, what things would you try to get at least one new tenant at a location that has previously closed its doors? If you can pull it off, we're up to 13 saves out of 20 cancellations. Thirteen customers at $25 per month equal $325 in RMR that we already had. To replace them would have cost us approximately $9,750 for this month. How much does that add up to in a year? Break out your calculator and find out! Is it worth the effort and training? I promise you, more and more of your competitors are beginning to learn that it is absolutely worth the effort, and that many cancellations are avoidable.

I would love to hear your thoughts after reading this article. What kinds of things are you doing to recover cancellations? You can email me using the link below. Best wishes for continued success in your business! See you in July with another column.

About the author: Bob Harris is managing director for The Attrition Busters. With over 30 years in the alarm industry, he provides seminars, business consulting, and workshops to help great companies become even better. Bob can be reached at (818) 730-4690 or by email at bobh@attritionbusters.com. Learn more about The Attrition Busters at www.attritionbusters.com.