Being that recurring monthly revenue or RMR as it is more widely referred to, is the lifeblood of the alarm monitoring industry, having a customer base that pays its bills on time is critical to the bottom line of companies. As with any industry, however, there are always going to be some customers, for whatever reason, that fall behind on their payments or either stop making payments altogether. This has become even more prevalent in areas that have been hit hard by the economic downturn and security is usually a luxury that most people can’t afford when money is tight.
Although each company in the industry is different when it comes to the specific steps they take when customers fall behind on their monitoring bill, they all share some common business practices which include sending letters, making phone calls and even sending customer service representatives to a customer’s home or business.
According to John Spooner, vice president of Aurora, Ill.-based Alarm Detection Systems, keeping a good relationship with customers is paramount and that companies need to do everything they can to work with their clients before they make the decision to disconnect.
"Of course, we’re always looking at ways to secure that customer, keep them happy and be a partner in the relationship," Spooner said. "When we get to a non-payment situation, we give them a 90-day window."
Spooner said that his company will employ a combination of letters and phone calls within that 90-day window to help get the issue resolved, but on the 100th day they will send a notice stating that they will disconnect the customer’s service in 10 days. After that 10-day notice is sent, Spooner said they will send a customer service representative out for a "face-to-face" meeting to see if they can work something out and make one final phone call on the 110th day before finally turning off their service.
ADS has not been oblivious the realities of the recession, however, and has even started a program for customers to help them through tough times.
"If a residential customer calls and says 'I’ve lost my job, I want to disconnect my service or I can’t afford my service,' we’ve done what we call our bailout program and we take and reduce their monitoring rate by two-thirds in some cases, giving them a six-month window with the reduction so they can continue their alarm monitoring," explained Spooner.
Spooner said that ADS is also flexible when it comes to people that are slow on making their payments and that they’ve had to think out of the box during the recession.
"Funds have definitely tightened up both on the residential and commercial side and we’ve had to work with people to get them through these economic times. Instead of taking the cancellation and just cutting off the service and losing that customer, having a compassionate side (with our bailout program) and understanding that people have lost their jobs, it has been a pretty well accepted program on our part and our customers have really appreciated that," he said.
Another company that takes a similar approach to working with customers is Atlanta-based Ackerman Security Systems.
"Certainly, first and foremost what’s on our minds is always making sure we maintain our good reputation in the industry and we maintain good, happy customers because happy customers create referrals," said Ackerman Security CFO Jeff Cohen.
According to Cohen, among some of the things that Ackerman does to ensure quality customer service and there has not been a misunderstanding with a customer’s bill is that they will call the customer between 20 and 30 days after a bill has become past due. The company will make a second call after the bill becomes 60 days past due and prior to disconnecting service, they will make one final phone call and send a certified letter stating that their account will be canceled within 10 days unless payment is made or there has been communication between the customer and the company to work out a payment arrangement.