For as long as I can remember – which is coming up on 25 years in the alarm industry
– one of the biggest issues facing alarm companies is the rate of customer cancellation.
Let’s face it… every
alarm company loses some of its customers every year, and the biggest reason
for this “attrition”
(as it’s known in the industry) is people moving
. That’s because, unlike a wireless FrontPoint
system, very few alarm systems can easily be moved with you
. But alarm subscribers leave for other reasons
as well: here is a partial list.
- Poor customer service. This could mean slow response to a repair issue, trouble getting through to someone who can resolve a problem, or other related complaints.
- Overpaying for the same services you can get elsewhere, for less. It pays to shop!
- Frequent hikes in the monthly rate for the same service and equipment, with no upgrades.
- Outdated technology, or a system that causes false alarms, does not work, etc.
- The customer did not really understand (or value) what they were buying in the first place – often as a result of an overly aggressive sales approach, such as by a door knocker.
Smart folks in the alarm industry know that you can learn a lot about an alarm services provider by the rate at which its customers decide to cancel their service – and the reasons why they cancel.
ADT Above Average – Not a Good Thing
Normally it’s good to be above average – unless you are talking about a negative statistic, like the rate at which your customers go away. Average customer attrition in the alarm industry has stayed pretty consistently in the 11% - 12% range for several years, which means that one out of ten customers (on average) cancels service each year. So when ADT reports customer attrition (based on $ of recurring monthly revenue) at roughly 14%, meaning one out of seven customers is leaving ADT annually, that’s an indication of unhappy subscribers. And when you look at ADT on the basis of how many customers leave each year, that number is closer to 16% - or one in six going away. Ouch!
How Hard is it to Cancel Service?
You can also lean a lot about a company by how hard they make it for you to cancel, when you want to. And when it’s really hard, that is a great way to hurt your reputation. For reference, check out this article on the Consumer Affairs web site, which just happens to be about… ADT.
Based on the number of complaints readers have sent us lately, we’re starting to suspect that ADT Security Systems is like the Hotel California—you can cancel anytime you like, but you can never leave. The details of the complaints differ but the end result is the same: people with ADT accounts are unable to cancel them no matter how hard they try. Consider this random sampling of complaints from a single week.
- Judy A. of Houston, Texas, posted a complaint with us on Sept. 4. She’d bought an ADT contract from a door-to-door salesman; the system was installed but never worked properly. A new representative came out to look at it, and told Judy it “had been installed incorrectly.” Rather than fix the system, he gave her various phone numbers to call; unfortunately, nobody from ADT ever called her back. Rather than fix the service, Judy said, ADT chose to disconnect it entirely — without disconnecting her automatic bill-payment system. An exasperated Judy finally wrote to us and said that as of “this date, September 3, 2013, no one has responded. I am still receiving a bank draft monthly of $51 without service or a system. It was disconnected by the representative. What do I do to contact, cancel, and receive monetary adjustment for this scam of a service?”
- Brenda H. of Garner, North Carolina, never had an ADT system herself, but her elderly parents do. Considering how heavily ADT markets its services to senior citizens, Brenda’s story arguably qualifies as the worst of the bunch: on Sept. 11 she wrote us to say that, “My parents are an elderly couple and have had ADT Security Services for a few years. Recently my mom upgraded to get a new system and called ADT to cancel the services. They told her that my dad had taken out the original contract and that she could not cancel without his authorization.” Problem is, Brenda’s father has had Alzheimer’s for several years. Brenda explained, “He is/was incapable of taking out the service, and of course it was my mom who started the service. They told her she would need power of attorney for my dad to cancel and then gave a bogus address for her to send this to.” Brenda tried handling the matter herself, to spare her mother the stress, but received only a runaround in return. “After speaking with numerous reps at the company they told me I could not cancel and would need power of attorney. I asked to have them furnish me a copy of the contract showing my father signed [….] They said they were unable to send this to me. Basically the company gives you the runaround, doesn't cancel and transfers you to numerous people to speak with. I have now faxed power of attorney and cancellation of services without any response from them [….] I wonder how many other seniors have had this experience. It is totally appalling to me that companies prey on senior citizens and get them more confused and make threats.”
As of press time, ADT had not responded to our requests for comment. So we still don't know exactly how to cancel an unneeded ADT contract, but we can offer one concrete piece of advice: given ADT’s apparent tendency to promise one thing in a phone call and deliver something else, we’d suggest anyone having problems with ADT handle the matter via writing, fax or email, rather than phone calls. After all phone calls are quick and convenient, but they don’t leave much of a paper trail. So don’t merely call ADT to cancel your service; send them an email, fax or certified letter explicitly spelling out your intention to cancel.
Even more important, when signing up for any service that requires a contract, read the contract thoroughly before signing it and be sure to keep a copy in a safe place. Remember that what anything a salesman tells you is completely meaningless. It is only what is written in the contract that counts. Many contracts specify a procedure you must follow to cancel. If you fail to follow that procedure, the company will continue to ignore you. The consumers quoted in this story -- and others in similar situations -- should contact their local consumer affairs office or, if that fails to produce results, their state's attorney general. Just type "[state name] attorney general" into a search engine to find contact info.
I really don’t mean to pick on ADT: some of these complaints could have been written about any number of alarm companies. But frankly, I do expect more of ADT, as the largest security services provider in the US and Canada – with roughly 6.5 million customers. And perhaps it is issues like this one that help explain why ADT continues to experience challenges not only in attracting new customers, but also in hanging onto its existing subscribers. As big as they are, ADT should perform better than the industry, not worse.
The Right Way
The best alarm companies are, not surprisingly, the ones with the best reviews and reputations. Whether it’s fully transparent marketing, a refreshingly consultative sales process, or a customer experience that “Wows,” you do have options. In some cases you can even find all three of these important attributes – like with FrontPoint! As one important piece of evidence, FrontPoint has the lowest customer cancellation rate of any nationwide alarm company in the US.
When you search for “FrontPoint reviews” you’ll find consistently great news, much of it having to do with the overall consumer experience. As the leader in wireless home security, and the #1 ranked home alarm company in the US, FrontPoint is committed to your safety and security – and that means honest sales and advertising, no hidden fees, the best technology at the best price, and world-class service. And remember, FrontPoint offers a 30-day 100% risk-free trial period with ever system we sell. That means you get to make sure that you love your system – and us – before you are stuck. Now that is peace of mind.